Reality is always opposite and upside-down relative to our point of view and thinking isn't it?
These Biases I have are Killing me
- Thread starter Flashboy
- Start date
Reality is always opposite and upside-down relative to our point of view and thinking isn't it?
Personally when people talk of psychological issues affecting their trading I think that is really over thinking things ... but then I trade objective strategies so I don't have to think while trading. I think the issue most people have is they don't have a strategy with an edge. You mentioned you were a consistent loser before, glad that you have improved but if you know how to lose consistently, all you need to do is the opposite to win consistently.
Maybe keep a journal (just something simple in notepad) of your thoughts before and after a trade. What did you like about the trade, and what got you in before you took it?.. and it couldnt hurt to take a screen shot of the trade to give yourself that visual aid.
Go back at the end of each week or month and review your trades...you should start to see some common issues arise. I've been writing down my thoughts on my "pitchfork" thread and I keep a screen shot of every trade. It's really helped me in the past, because sometimes I'll take a trade, and later wonder wtf I was thinking.
Not to mention, EVERY business keeps records of some degree or another. Your records in this case are your screen shots of your trades and thought process. It's a pain to go into paint and mark entry, exit, and target on your trades but its important. If you do many trades a day, pick the top 5 winners/losers of the day, and record those. Being organized will help a lot....ask any business person.
kon
Go back at the end of each week or month and review your trades...you should start to see some common issues arise. I've been writing down my thoughts on my "pitchfork" thread and I keep a screen shot of every trade. It's really helped me in the past, because sometimes I'll take a trade, and later wonder wtf I was thinking.
Not to mention, EVERY business keeps records of some degree or another. Your records in this case are your screen shots of your trades and thought process. It's a pain to go into paint and mark entry, exit, and target on your trades but its important. If you do many trades a day, pick the top 5 winners/losers of the day, and record those. Being organized will help a lot....ask any business person.
kon
this is were i used to get into trouble, 'the trend is almost finished' almost is not good enough to enter a trade. i painfully wait for the market to turn. this works in all time frames, 3 min,60 min, daily etc.
i wait for the market to break below the trendline or MA. (whichever you use, i use MA's)
then i wait for the market bounce and go up. if (only if) it hits the trendline or MA i go short. if it breaks up over the trendline or MA i get out and wait.
this has worked for me the last few months. the hard part is waiting for the confirmation. you start to feel like your going to miss the reversal, but if it is a true reversal you can catch it on the strong signal with a good chance of success. you must stick to your timeframe, dont mix and match.
i attached a few charts in pdf format. i dont know how to export them from TS. sorry
later
i found myself on wrong side, pretty much every time when i trade my own "expectations",rather than just plain buy\sell signals.
you sit deep in profit,you short the market right from open, market is like -2% down..no signal to close the position...your mind is start telling you some bs like this-well..i'm deep in profits..we are -2 % already...how low it may go? the range is already > than usual.. maybe it's time go pocket some profits?
ok..did closed half...market is -3% same voice,same bs...closed it all..bamm!!! IWM -8.5%..that's my day during flash crash..
only in this business you can make a shit load of money and still be mad and upset...and exact opposite-lost couple grands and happy about it ,jumping around...cause in next minute stock was halted and reopen -50% down
expect unexpected.
This is a great idea. Each day I do a bar-by-bar analysis of my trading instrument (crude oil/CL), which provides me a measure of how much I've allowed bias, distraction and failure to follow my rules to affect me that day.
I use a 5-min chart for setups/signals. What I do once the market is closed, is I move the chart off screen except for the hour or two before I start trading. I then reveal one bar at a time and ask myself whether the bar set up as a pure signal bar (enter a trade immediately upon close of the bar) or whether it set up as a conditional signal bar, meaning I enter the trade as soon as price breaks a specific level (such as the signal bar's high, low, open or close).
I make note of the entry price, stop price and profit target price and then reveal one bar at a time until either the stop or the target is hit, logging the P/L on the trade. Then I move onto to the next signal, until I reach the close.
Then I compare this to the trades I actually took that day. This gives me the cost of mistakes (bias, distraction and rule violations).
Today, for example, my first trade was entered 4 ticks late ($40) because I didn't put on the trade immediately upon close of the pure signal bar (distraction) and then I made the mistake of letting my bias override my profit target strategy under these particular conditions and as a result ended up with $50 profit on the trade instead of $200 because price twice dipped 3 ticks below what should've been my target and instead I trailed a stop hoping for more than that. There are times to hope for more, but price in a range around a flat 20 EMA is not one of them. Cost of mistake: $150
I failed to take several other signals for one reason or another (bias, distraction, overthinking). Cost of mistakes: a lot
I then took a conditional signal trade off the news, and instead of targeting a measured move (very common off this type of setup), I took profits when price pivoted after falling really fast. It was an emotional reaction to the fact that a large P/L was showing as well as bias that price had gone "too low". The target I normally use in this type of setup is a measured move plus 4 ticks cushion which would've taken me out 1 tick above the low of the day. Cost of mistake: $430
My short bias kept me out of two very decent long trades. Cost of first mistake: $350 to $550 depending on whether I chose the hard profit target or trailed a stop. Cost of 2nd mistake: $490
Interestingly, my final trade was off a signal I saw on the 1-min chart (the 5-min chart would not have provided a signal because the trade was counter-trend). One of my trading roomies and I discovered we'd both shorted at the same off this setup that was easily seen on the 1-min chart. Since it was counter to the prevailing trend, profit target should've been 20 ticks, standard CT target. But we both got greedy thinking the trend had turned and ended up out break even after price moved through target zone TWICE and finally reversed. Cost of mistake: $200
When my cost of mistakes is over 3x my daily profit, my trading gets a very bad grade!
