Painful Market Lessons

[trader99]

Good news! I followed my rules to the T today. Caught a couple of really good moves. Woohoo. Made decent money on a per contract basis!

But I only did on too few contracts and not with size. Funny how the worst trades are always with big sizes. But more importantly, I'm gaining back confidence. This shows me that my methods work. Only if I stick to it!

 

[pinabetal]

Good news! I followed my rules to the T today. Caught a couple of really good moves. Woohoo. Made decent money on a per contract basis!
But I only did on too few contracts and not with size. Funny how the worst trades are always with big sizes. But more importantly, I'm gaining back confidence. This shows me that my methods work. Only if I stick to it!

There is a 80% to 90% that the battle you face is probally more psychological than anything else providing your trading methodology is sound. The mind is our greatest tool in trading but it is also our biggest enemy. Emotions run a close second. Our thoughts affect our emotions. And of course our emotions can cloud our mind and reasoning abilities. That is why a plan and discipline is needed. It is also good to understand the difference between orthodoxy and orthopraxy.

Orthodoxy is the correct belief. Orthopraxy is correct practice. The markets are quite fond of disrupting our orthodoxy about them. We have to learn to engage the market from an orthopraxy standpoint. What matters is not what we believe about the markets but what matters is what the market does and our reaction to that market behaviour. Orthodoxy is why traders will not take their stoploss but move it because they "believe" they are still correct. Orthopraxy would respond to the markets according to the market's action. It is a very difficult psychological challenge because when reality goes against our well studied out ..well thought out beliefs...then cognitive dissonance is occurs. This mental tension leads to discomfort and mental stress. That in turn cause pounding of the heart..sweating of the palms...begging..throwing hammers at the computer screen. LOL. To add insult to injury when we reach a point that the pain is unbearable and we take our loss the market then rebounds like it did in your case. This is serious because it reinforces our orthodoxy that we were indeed correct in our thinking on the direction of the market but we just jumped out when the pain was unbearable whereas if we had followed orthopraxy we would have exited much sooner with a much smaller loss. This gives the mind the opportunity to create a mental blind spot and believe me it will do so. So, on the next similiar situation on another trade our mind will tell us "just hold out a little longer...remember what happened last time..you would have gained back all your paper losses and made a good profit..so just hold." This is where our mind becomes our enemy. Our mind,in essence, tricks us into doing something we should not do. Or it can trick us into NOT doing something when we should do it. When you really stop and consider it the present trade has nothing to do with a previous trade. It is a unit on its own. We have to learn to focus on the present and not allow the past to exert undo influence on the present. Our mind will even tell us not to take a trade that is a high probability trade because we lost on the previous trade. The two trades have nothing to do with each other but our mind will trick us and our emotions will back the mind up and confirm its reasoning. If we allow our mind and emotions to trick us enough we will develop bad habits. Once a habit is established it is difficult to change. Psychologically our will is the final arbitrater. In the end it will make the decision and enforce it and the mind and emotions, and even our physical bodies must obey providing they are capable of doing so. So, we have mind..emotions..and will. We need all three in trading. They can help and they can trip us up.

Bottom line we must have a plan and sound methodology but that in itself is NOT enough. We must also be aware of our mind and emotions AND UNDERSTAND THAT THEY can and will trip us up and even deceive us. In addition we should engage the market from a orthopraxy standpoint and realize that our orthodoxy...well..the market knows nothing of it!....therefore we should learn the lesson that the market is going to do whatever it is going to do and what is important is not our beliefs about the market but our response to the markets action. Many times our plans pan out. Many times they do not. Hence we must have discipline for when they don't and even for when they do! Discipline can be defined as:

Being responsible to do WHAT you are supposed to do, WHEN you are supposed to do it, and HOW you are supposed to do it and pay attention to DETAIL (the devil is in the details) as the old saying goes.

 

[pinabetal]

My system have taken about dozen longs as it been going down, have no idea if it is bottom yet, just go with the flow. So long as you trade as far as your rules, you can't be thinking of failing, it part of the game, just business. I been trading Long term for so long now, I don't think much any more of losses or wins, goes up/down and so long as I continue to watch, I doubt anything will change, people don't change.

Monthly Wheat
View attachment 165831

The safest way to trade this channel down is shorting at the top of the channel each time it goes back up. But if one has a good counter trend strategy it can be traded long from off the bottom of the channel and shorted at the top. Sooner or later there will be a B.O. Odds favor more downside action before a B.O. to the upside. However, it can be either way. It is actually begining to form a wedge to the downside which will probally resolve in a reversal back up. Price is at longterm support too. I would be looking for reversal bars but i do think it will go down more before that happens. There are alot of overlapping bars in the wedge/channel.

 

[Handle123]

The safest way to trade this channel down is shorting at the top of the channel each time it goes back up. But if one has a good counter trend strategy it can be traded long from off the bottom of the channel and shorted at the top. Sooner or later there will be a B.O. Odds favor more downside action before a B.O. to the upside. However, it can be either way. It is actually begining to form a wedge to the downside which will probally resolve in a reversal back up. Price is at longterm support too. I would be looking for reversal bars but i do think it will go down more before that happens. There are alot of overlapping bars in the wedge/channel.

If that is your system, sounds great, BUT there isn't anything that is safest to be honest about trading, cause if all of a sudden on the high side you don't notice a Megaphone staring to build, you are screwed with losses. My way of long term is horrible of doing nine year extreme, buying as it drops and hedged, you just get use to the load of losing, but it works for me and it automated, you would not believe now when you get losses or wins, you are removed and feelings about it all are great, like you don't care about it.

 

[Gotcha]

Good news! I followed my rules to the T today. Caught a couple of really good moves. Woohoo. Made decent money on a per contract basis!

But I only did on too few contracts and not with size. Funny how the worst trades are always with big sizes. But more importantly, I'm gaining back confidence. This shows me that my methods work. Only if I stick to it!

What are you trading? If you don't have the confidence, experience, and edge, why are you trading more than one contract to begin with?

 

[Handle123]

Good news! I followed my rules to the T today. Caught a couple of really good moves. Woohoo. Made decent money on a per contract basis!

But I only did on too few contracts and not with size. Funny how the worst trades are always with big sizes. But more importantly, I'm gaining back confidence. This shows me that my methods work. Only if I stick to it!

Huge Congrats trader99.

Many reasons why we lose, but once you stray from your rules, regardless of outcome, you not trading your system, you be trading one of MY systems called -Ass Stupid System or ASS for short. Yep, in my past I was an doing ASS often, and ASS got kicked often, I would tweat my ASS during the market hours thinking I had Smart ASS and doing another ASS trade only to be fucked but my own ASS. Just so much of ASS I could take, eventually found that I was a Dumb ASS. I am glad I got more rigid and no longer pick my ASS as in the past.

Have a great weekend all, rest and eat.

 

[mlawson71]

One of the most bitter market lessons I ever received was when I was a total rookie and I didn't have the habit of checking a Forex calendar at the beginning of the week to see what high impact events there will be in the following days. I had a long-term position, I fell asleep, I woke up to a massive loss.

 

[trader99]

Huge Congrats trader99.

Many reasons why we lose, but once you stray from your rules, regardless of outcome, you not trading your system, you be trading one of MY systems called -Ass Stupid System or ASS for short. Yep, in my past I was an doing ASS often, and ASS got kicked often, I would tweat my ASS during the market hours thinking I had Smart ASS and doing another ASS trade only to be fucked but my own ASS. Just so much of ASS I could take, eventually found that I was a Dumb ASS. I am glad I got more rigid and no longer pick my ASS as in the past.

Have a great weekend all, rest and eat.

That's a good analogy. LOL. Got a good laugh. Yes, following just my rules each and every time is a positive expectancy with steady money rolling in almost daily. Trying and doing stupid ASS trades result in losing weeks or months worth of profits. Now I gotta get up again and fight it back. But the good news is that just doing what I know works does make money. Just gotta be patient enough to let the steady profits accumulate.

 

[trader99]

What are you trading? If you don't have the confidence, experience, and edge, why are you trading more than one contract to begin with?

I do have the experience and edge. Just that one stupid trade I had no edge but went blindly in with a fat finger of too many contracts. As soon as I realized it was a fat finger mistake, I should have gotten out for a small loss. Should, coulda, woulda.

 

[Gotcha]

I do have the experience and edge. Just that one stupid trade I had no edge but went blindly in with a fat finger of too many contracts. As soon as I realized it was a fat finger mistake, I should have gotten out for a small loss. Should, coulda, woulda.

Well... in my humble opinion, if you did truly have the experience/confidence, then even if this was a one-off mistake, you wouldn't need to create a thread about it. Saying things like winners come when you're trading small size and all the bigger losses seem to come when you put on more size tells me that not everything is worked out yet.

I'm not saying that its easy, but when you're in the right space, putting on a trade with 20 contracts, and taking a loss, and then putting on another trade, same size, and taking a loss, and then not having this affect you at all for the next trade is the frame of mind you need to be in. If you can't bang out trade after trade without it affecting you and without you questioning yourself to me means that you're trading too much size to begin with.