Hello...
Been trading for 2 years. Lucky at the beginning, dumb afterwards. Sideways for a year and then in August and September 2 (two) big relative losses, one in SNAP on August 10 for $1k , where I got rug pulled and didnt want to accept my stop loss and one in September in NIO. After that I stopped trading live, went back to paper trading. But even there, my discipline is non existent. Overtrading a lot, oversizing a lot, position sizing is flawed. It is not my winners that are causing my problems, but what I do with my losers. And when I see red, I get over aggressive, trading subpar signals, instead of winding down. No clue how and if it is fixable. Paper trading hasnt helped. I dont want to lose my money, but I don't know if this is even achievable. Anyone experienced the same?thanks
I solved all these problems. It doesn't take discipline (discipline is hard). I don't have to think about these things anymore.
Overtrading
Cause: I REALLY WANT TO BE RIGHT BECAUSE I WAS WRONG LAST TIME.
Fix: You're not always going to be right. Don't lose too much being wrong. Don't double down on being wrong.
Position sizing
Cause: You make a great trade and wish you had more on. You oversize the next trade and oops, you're wrong.
Fix: Start with a small position and aggressively add as it goes your way
When I see red I get overaggressive, trade subpar signals, instead of winding down
Cause: You have not yet internalized that sometimes you will be red.
Fix: Internalize that you will sometimes be red
Every trade looks like this (for me)
Every trade sort of looks like this for me:
- Signal
- Entry + Stop + Target
- Some period of time where it isn't clear whether it's going to hit the stop or the target first
- It becomes clear whether it's going to hit the stop or target
- If it becomes clear it's going to hit the target, add aggressively on pullbacks
- If it hits a stop, well I risked a very small amount relative to my wins so I don't really care
- It is possible that I add and it hits the stop. Doesn't happen often enough for it to be a problem. Maybe 1 out of 10 stop outs if that. So the numbers work.
How to use paper trading to help you
I usually trade in two sessions: morning between 8:30-11 am and 2pm-4pm.
I start out my day simulating trading random previous opens. When the real open comes around, I just turn off the simulator and I'm already warmed up and my screens look exactly the same. When my first session of trading finishes, I usually go and have lunch. Between the end of lunch and 2pm, I am usually sim trading previous 2-4pm sessions.
How paper/sim trading doesn't help
If you do not have a strategy that works, paper trading does not help. Paper trading helps to fine tune a strategy, gets you exposure to a variety of conditions you may only see a handful of times a year (can be good, or bad, you need to properly weight these incidences.)
What you should (probably) do
Since it sounds like you don't have a real strategy and you trade stocks, I suggest you take a look at
https://www.reddit.com/r/RealDayTrading/
The main guys there use what they call a "relative strength" approach. Not RSI. What they do is try to find stocks that are strong against SPY (on a bull day) and weak against SPY (on a down day) and day trade those for an expected value of 10-15c at a time. 10 times a day gives you a dollar or so.
Why did I write this
I don't know, it's probably useless tbh.
)
