The Road to Consistency

[Handle123]

Unless you have back tested, just picking a place to get aggressive might not work well for you. You might want to back test what times of the day session has produced best days and running tests on bad days are times different than profitable days.

 

[trader99]

10/3/2019:
Taxable Acct: Trade Zero
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Realized gains:
UGAZ: $347.17
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Looking back historically back at my trades bad and good, I realized over 100% of my losses comes from countertrend trading. Yep, over 100%.

Additionally, I like to get in at the beginning of a trend. Once a strong trend emerges I'm scared to enter midstream. Or if I enter midstream I would exit for a tick or two even when it has rooms to go. I'm afraid of heights. Even though my methods tell me this is a good odds entry spot.

Then the WORST part is when it gets extreme I then try to go countertrend. Sometimes I'm within 1 bar of the bottom. But a lot can happen in 1 bar thus I get out at the worse possible price only to see it rebound on the very next bar and zoom back up.

Other than that, I have 70-80% win rate according to my analytics. It is these stupid countertrend trades that ruin my other near perfect track record. This has been going on for years. It's psychological and not methodical. Because I even tell myself this is stupid yet I still enter. It's a compulsion. This is the only thing stopping me from being in the 1% of daytrading.

How do I fix it? See a hypnotherapist? It's basically breaking a bad habit. Even when you know it's wrong you still do it. Fortunately, I have good trades that offset these bad trades but these bad trades set me back days and sometimes weeks. The distribution of wins/losses is like this. A lot of good days and nice steady curve. Then BAM! down. Then a steady rise up. Then BAM!

I'm almost opposite of what most daytraders dream of. Most traders dream of a superstrong trendy day. I'm afraid of those days unless I get in early. If I get in early then fine I can take advantage of it. But if it's midstream then my tendency is to countertrend trade it with disastrous results.

This is persistent problem. Without solving this problem then I should quit trading even though I'm so so much better than I've ever dreamt off. I produce P&L numbers and consistency on winning days that I can't even imagined in the past.

Part of the countertrend tendency comes from mixing timeframe. When I think like a daytrader/scalper I do really well. In and out. When I start looking at the daily chart and say it looks like that it is the bottom of that move or the top of that move that's when I do shit. Maybe I should just take out the daily charts and just focused on my 5min and 1min chart period.

So, I need to close the gap between knowing and doing. And also prevent myself from doing things that I know are WRONG yet I still push the button to do it.

This is literally 5 feet from gold... But there's just one bad habit I need to kick.

Any ideas?

 

[BlueWaterSailor]

I just saw a prezzo by a guy from Nadex where he talked about a trader who had bad habits that he knew were bad, but kept doing it. The guy went out and bought a dog shock collar, strapped it to his leg, and promised out loud, with everyone in the office listening, that he would hit the button the next time he did a stupid trade.

Made three of them, and hit himself three times, raising the level each time. The problem is, those shock things aren't linear... after the third one, he got up off the floor and sat visibly shaking and sweating in front of his terminal. Then, he shut off his computer and went home for the day.

Never did the stupid trades again, but keeps that shock collar sitting on his desk to this day as a reminder.

(This is NOT a recommendation, do not try this at home, it's a story told by some guy on the internetz and may have nothing to do with reality. If anybody finds @trader99 curled up around a rafter, it's not my fault.)

 

[jamespond]

Looking back historically back at my trades bad and good, I realized over 100% of my losses comes from countertrend trading. Yep, over 100%.

I feel you. I started to journal everything in detail, to make the problem visible.
But it seems you made that conclusion already.

The distribution of wins/losses is like this. A lot of good days and nice steady curve. Then BAM! down. Then a steady rise up. Then BAM!

I feel you even more...
In the end I was so sick of it (after years) that I just completely gave up on countertrend trading.

Part of the countertrend tendency comes from mixing timeframe.
...

Here's what I do: I wait for a trend to be established (in a certain timeframe) and at the same time knowing there's enough energy in it to continue.
Only then will I start to look at a specified smaller timeframe. And you can indulge your countertrend skills over there.

JP

 

[trader99]

I just saw a prezzo by a guy from Nadex where he talked about a trader who had bad habits that he knew were bad, but kept doing it. The guy went out and bought a dog shock collar, strapped it to his leg, and promised out loud, with everyone in the office listening, that he would hit the button the next time he did a stupid trade.

Made three of them, and hit himself three times, raising the level each time. The problem is, those shock things aren't linear... after the third one, he got up off the floor and sat visibly shaking and sweating in front of his terminal. Then, he shut off his computer and went home for the day.

Never did the stupid trades again, but keeps that shock collar sitting on his desk to this day as a reminder.

(This is NOT a recommendation, do not try this at home, it's a story told by some guy on the internetz and may have nothing to do with reality. If anybody finds @trader99 curled up around a rafter, it's not my fault.)

Haha. Interesting story. I need something like that mentally not physically. The strange thing is as I'm entering the trade the voice in the back of my mind said THAT'S STUPID! DON'T DO IT! Yet, I still hit the button. So, this is some deep seated automatic behavior shit going on here! Something triggers it then it goes into this ritualistic automated non-thinking behavior and action that even my rational thinking conscious mind has a hard time stopping it.

It's like someone has taken control of my mind and even my mind fighting to stop it as the hand goes to hit the countertrend button the mind YELLS STOP! STOP! Such a mental struggle and fight.

I know it sounds really strange.

Brett Steenbarger said traders need to know if they have psychological issues or methodical issues(i.e. no edge). A lot of traders have no edge but just claim they have pyschological issues. Whereas there are other traders with proven edges but have psychological issues.

I think I'm the later. Because the analytics on the winning days when I don't have these countertrend complusion are just excellent. 75-80% win rate and on some days 100% win rate and P&L over $1000 or easily hundreds. And it's not that I'm holding onto losers til they become winners. These are low risk high reward trades.

To change a habit, I must change how I think when the "triggers" come about. When a powerful trendy day comes along, I need to pull back and say to myself this is NOT the signal to countertrend. You've been hurt countless times before.

I know all of this intellectually, but then I still hit the damn button...

 

[BlueWaterSailor]

this is some deep seated automatic behavior shit going on here! Something triggers it then it goes into this ritualistic automated non-thinking behavior and action that even my rational thinking conscious mind has a hard time stopping it.

Go talk to a psychologist. Seriously; that seems like the smartest move you could make right now. Compulsive behavior that's losing you money? I'd be on that couch like a shot.

 

[trader99]

Go talk to a psychologist. Seriously; that seems like the smartest move you could make right now. Compulsive behavior that's losing you money? I'd be on that couch like a shot.

Yeah. It's a psychological problem I struggled with for years. Eliminating this one problem and I can and will be HUGELY profitable. Profitable enough to probably focus on this full time and rolling in seirous dough. When I'm free of this bias, making money is a cinch. On the other hand, when I have this bias it's all doomed.

But I don't know many psychologists who deal with traders except for Brett Steenbarger. I'm sure he's not cheap.. hehe

 

[BlueWaterSailor]

But I don't know many psychologists who deal with traders except for Brett Steenbarger. I'm sure he's not cheap.. hehe

Talk to one who deals with weight loss or alcohol/drug problems. Same kind of compulsive behavior dynamics.

"Every child in the world imagines that its fantasy world is unique to itself.
Psychiatry knows that the joys and terrors of private fantasies are a common heritage
shared by all mankind. Fears, guilts, terrors, and shames could be interchanged, from
one man to the next, and none would notice the difference."
-- Alfred Bester, "The Stars My Destination"

We're all fucked up. The good thing is, there are lots of commonalities in how we're fucked up, and they can be studied and, to a large degree, mitigated.

Go get mitigated. To most people, it's a nebulous "wanna get better" sort of thing; to you, it's actually measurable in crisp, folding $$$numbers$$$. Consider yourself lucky for having such a powerful motivation.

 

[trader99]

Talk to one who deals with weight loss or alcohol/drug problems. Same kind of compulsive behavior dynamics.

"Every child in the world imagines that its fantasy world is unique to itself.
Psychiatry knows that the joys and terrors of private fantasies are a common heritage
shared by all mankind. Fears, guilts, terrors, and shames could be interchanged, from
one man to the next, and none would notice the difference."
-- Alfred Bester, "The Stars My Destination"

We're all fucked up. The good thing is, there are lots of commonalities in how we're fucked up, and they can be studied and, to a large degree, mitigated.

Go get mitigated. To most people, it's a nebulous "wanna get better" sort of thing; to you, it's actually measurable in crisp, folding $$$numbers$$$. Consider yourself lucky for having such a powerful motivation.

Relevent post from Brett Steenberger's blog!

http://traderfeed.blogspot.com/2019/10/changing-negative-trading-behaviors.html


"A key idea is that before we can change any pattern of thought, feeling, or behavior, three things have to happen:
1) We have to become better at recognizing the pattern occurring in real time;
2) We have to switch our mindset so that we can approach the situation in a different way;
3) We have to make a conscious effort to not follow our old pattern and try something new.

A vital element in this change process is that switch of mindset in the second step. The various approaches to change involve different techniques for making that switch and seeing the problem in a whole new light. For example, if you get worked up about missing a trade and then step back and rehearse a different internal dialogue, telling yourself that getting worked up--not the missed trade--is the *real* problem, that helps you distance from bad habits and exercise more control over your next actions and decisions.
The general rule is that we cannot change our problem patterns unless we become aware of them as they are happening and then emotionally connect with the costs of those patterns. We don't change by writing in a journal. We change by turning our problem patterns into enemies and finding the motivation to smack them down.
All change begins as an internal battle. "

 

[trader99]

10/11/2019:
Taxable Acct: Trade Zero
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Realized gains:
$447.26
==============

NonTaxable Acct: IB IRA
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Realized gains:
GC: $756
NG: $61
==============
$816

Today would have been a killer if I was all in NG and UGAZ(on TradeZero)! Sorry I have been too busy to update this journal. Only trade a little bit in the mornings and have other non-trading activities to attend to!

I learned my lesson with UGAZ. On Tuesay I was in huge. Then it pulled back a little. Then yesterday morning I got out my entire massive UGAZ position in the morning bounce. Then it crashed in the afternoon. That was a good narrow escape. In my old days I would just hold and hold. It's a daytrading instrument.

While today was good, it could have easily been $5K+ had I got back in UGAZ lows this morning. Gotta work toward that goal! Also had I stick with some of my good stocks trades on TradeZero it would been up nicely.

Thanks to TradeZero I'm back to actively trading equities again! I love $0 commission! @TradeZero_Dan

P.S. I still have Robinhood but it's garbage for daytrading. Swing trading it's ok.