Regression

[NoDoji]

Very recently some of my old habits are creeping back into my trading and I feel like I’m regressing. Part of the problem is the fact that the overall market is “in the middle”. I liked it when it was overextended to the upside, then to the downside, but now its “diddling in the middle” and this seems to be having an effect on how I’m handling my trades.

A couple old habits that are creeping back:

Hesitating on valid setups because I’d have to place a survivable stop at a level that I’m not comfortable with, despite the fact that my expected target is 2x or more the distance of the stop. The increased volatility means larger stops, but also larger profits. The market keeps proving this to me, and I'm not buying it, sadly. Even though I “know” that a valid setup is a valid setup, I start to over think instead of just taking the trade.

Moving my stop to b/e too quickly on a couple volatile stocks I trade and losing out on some excellent moves as a result. I keep expecting price to keep going in a trajectory to my target, forgetting that there's a lot of whippy action in between.

I went from a period of total overconfidence to becoming overprotective again and I’m cutting my potential profits significantly.

Is this a common issue during the early trading years? Will there be a point at which my confidence will stick with me?

 

[QuikrRetirement]

Quote from NoDoji:

Very recently some of my old habits are creeping back into my trading and I feel like I’m regressing. Part of the problem is the fact that the overall market is “in the middle”. I liked it when it was overextended to the upside, then to the downside, but now its “diddling in the middle” and this seems to be having an effect on how I’m handling my trades.

A couple old habits that are creeping back:

Hesitating on valid setups because I’d have to place a survivable stop at a level that I’m not comfortable with, despite the fact that my expected target is 2x or more the distance of the stop. The increased volatility means larger stops, but also larger profits. The market keeps proving this to me, and I'm not buying it, sadly. Even though I “know” that a valid setup is a valid setup, I start to over think instead of just taking the trade.

Moving my stop to b/e too quickly on a couple volatile stocks I trade and losing out on some excellent moves as a result. I keep expecting price to keep going in a trajectory to my target, forgetting that there's a lot of whippy action in between.

I went from a period of total overconfidence to becoming overprotective again and I’m cutting my potential profits significantly.

Is this a common issue during the early trading years? Will there be a point at which my confidence will stick with me?

When you are concerned about the size of the stop, it is probably time to cut the number of shares/contracts of the trade, NoDoji.

For multi-day holders, there is a concept of "sell down to the sleeping level." But if the stop size is bothering you, the same thing applies. When $$ level bothers your psychology, you are overtrading.

 

[Handle123]

During the summer months, I trade a little different cause the lack of volume to get filled, but more importantly the excess slippage on protective stops. So I have found that I require a deeper retracement, thereby risking less and target expanding just a little. Granted I will be left standing with empty bag on some trades cause I didn't enter where I normally would enter. But chances are I wouldn't be filled anyway cause the lack of the volume.

The only time I actually decrease volume is when there is high volatility, all my methods have rules of the bars being too big and can actually shut down my trading altogether.

And there is one bar on one minute timeframe for ES, It tells me immediately trail protective stop when a one minute bar's range is ten points or larger, it is like free money and anything that drops that fast will certainly bounce up pretty quick.

I don't think it is cause of your early years of playing the game as much as it is identifying chop and having a more reliable method to trade it. I divide up my trading day into three parts, and although I have same signals for each, I use different money management rules because of the time of the day. Targets are different, and also what many don't consider when trading is, where am I for the day? If you are up profitable on the day has much different money management rules than if you are at breakeven for the day or in negative territory. If I am down on the day after three hours, my first goal is get to a little better than breakeven and quit. Either the methods are not cycling right or I am doing something wrong (not feeling well or argument with GF), so my goal is capital preservation.

Most traders have little idea on how to manage their capital and that is what it is all about for me. I want to get to breakeven on my trade, then the market will tell me what I can get for profits.
You don't have to make money every day, making breakeven is good too. Some of my more memorable days are when I got back to even on the day

 

[NoDoji]

Quote from Handle123:

You don't have to make money every day, making breakeven is good too. Some of my more memorable days are when I got back to even on the day

Thank you for your reply. I've been giving this a lot of thought and realized I "made hay while the sun shone" and shouldn't expect every day or every week to be on par with a record day or a record week that came as a result of certain price action with which I felt extremely comfortable.

I remember once waking up to an overnight gap against a position and being thrilled to get out for "only" -$2500 :eek: