What are some techniques to get over the fear of making trades.

[Same Lazy Element]

Getting into systematic trading is a sure way to cure this.

A systematic trader should (and after a while always does) know that things don't work forever and that you can get carried out on an event etc. With regard to uncertainty she's similar to a discretionary trader; in fact I'd argue that systematic trading is a continuum with different traders falling on different spots on the spectrum. Decisions about scaling risk up/down, changing parameters or shutting down specific alphas can all be very emotional decisions.

It's not about the statistical approach (every seasoned trader understands that he's essentially tossing a biased coin), it's about the emotional acceptance of the uncertain outcome. If you are afraid of losing money, meditate on it like the samurais mediated on dying (see here: http://strivingforfreedom.com/death-meditation/). If that does not help, hire a psychologist. I have, unfortunately, seen very smart systematic traders who could not deal with the mental aspect and have, at times, struggled with it myself (it is especially hard after a long flat period or a drawdown).

 

[ValeryN]

A systematic trader should (and after a while always does) know that things don't work forever and that you can get carried out on an event etc. With regard to uncertainty she's similar to a discretionary trader; in fact I'd argue that systematic trading is a continuum with different traders falling on different spots on the spectrum. Decisions about scaling risk up/down, changing parameters or shutting down specific alphas can all be very emotional decisions.

It's not about the statistical approach (every seasoned trader understands that he's essentially tossing a biased coin), it's about the emotional acceptance of the uncertain outcome. If you are afraid of losing money, meditate on it like the samurais mediated on dying (see here: http://strivingforfreedom.com/death-meditation/). If that does not help, hire a psychologist. I have, unfortunately, seen very smart systematic traders who could not deal with the mental aspect and have, at times, struggled with it myself (it is especially hard after a long flat period or a drawdown).

Isn't "emotional acceptance of the uncertain outcome" is all about really understanding and truly accepting statistical approach?

Emotional acceptance might be a cherry on top of accepting the statistical approach, to complete oneself as a some sort of perfectly-efficient-trader-creature. If one begins with accepting uncertain outcome backed up by nothing else then there is no reason to filter out all sorts of bogus methods not backed up by anything other than someone says it works great. Then down the rabbit hole long enough and.. might as well start challenging if the acceptance of the uncertain outcome was the right choice.

In other words - a system has certain stats, until it doesn't, and that has its' own stats

Val

 

[murray t turtle]

Have an exit plan.

%%
That;
+ [sss] small size start.Plenty of liquid stuff he can ramp up some.NO way to get upset with small size.
And sounds like some one has been spending too much time with negative news+ not enough time with price data.
Have to also consider the fear/of missing all the moves. Hope this helps/it helps me.

 

[Dwayne]

in my opinion, the only time anyone is afraid of getting in, is when they have insufficient data on the strategy.
if you backtest on 100, 500, 2000 trades and your strategy is profitable over that time, there's no reason to fear getting in.
If you are afraid of getting in you need more data to prove to yourself that you don't need to be.

Very well said. Practice is what's going to free you from the fears.

 

[TimtheEnchanter]

Obviously, trade small so you do not care, trade well so you win small, and trade to scale up when over the hump.

 

[Fonz]

I haven't made a trade in months. I just watch looking for the "right" entry. I used to be an excellent trader in the late '90s (and took a 20 yr break). Now I hopped back in the summer and it's been torture to pull the trigger.

Help appreciated.

You use to be an excellent trader: What makes you stop trading? You really should work on your answer.
Also, are you afraid of losing or wining? No joke here, afraid of losing can easily be controlled, afraid of wining is more complicated: Why do you think you don't deserve to win anymore? See my first question.
It seems you feel that you need help or "help appreciated" as you wrote it.
Nothing wrong here, and a therapist (yes, a shrink) could help.
I wish you the best.

 

[easymon1]

stats

Where's OP?

 

[murray t turtle]

Isn't "emotional acceptance of the uncertain outcome" is all about really understanding and truly accepting statistical approach?

Emotional acceptance might be a cherry on top of accepting the statistical approach, to complete oneself as a some sort of perfectly-efficient-trader-creature. If one begins with accepting uncertain outcome backed up by nothing else then there is no reason to filter out all sorts of bogus methods not backed up by anything other than someone says it works great. Then down the rabbit hole long enough and.. might as well start challenging if the acceptance of the uncertain outcome was the right choice.

In other words - a system has certain stats, until it doesn't, and that has its' own stats

Val

%%
MOSTLY;
except its not really a biased coin toss/unless one uses a silver coin.
OP noted 20 years ago, so he's thinking 2000.NOT likely\ 2000 move; but expecting more of a roller/\coaster until JAN 20 or FEB.
EVEN if one loses money with spxs/spxu/sqqq its still small size/so no excuse to avoid market thru FEB.
NOT a prediction, not a weather prediction, not a vaccine gov guinea pig. LOL.................

 

[931]

Decisions about scaling risk up/down, changing parameters or shutting down specific alphas can all be very emotional decisions.

I test for historical drawdown with heightened spread and maintain some room for automatic kill switch, to take emotion away.
Multi instrument test allows cancellation of individual losses/profits out and generate smoother graphs of closed and floating balances.
If floating balance goes too far from over historical tested drawdown ,autokill orders.

Also working on mobile status reporting and kill switch , to get notifications on account status changes and manually close orders on android device.

Its emotional to think that some edges took years to find and at some point could be useless, + low capital that didnot allow to take most out of it.

 

[murray t turtle]

Very well said. Practice is what's going to free you from the fears.

%% Mostly true

5 winners don't mean anything in terms of probability of long term positive outcome.

I would insist, that the underlying reason is the same - not having a system and not believing in it. Too much uncertainty to handle, no proof it will work, money on the line, all good reason to fear pulling a trigger.

If someone went thru the trouble of creating a formal system, validating it, running numerous types of testing trying to break it and it still came out promising - it is the whole different game. Lots of internal conflict that cause fear is gone.

There is always a chance that it could be pathological. But it likely not a problem for most people.

Val

%%
Mostly true.
BUT 5 years up in QQQ could cause me to be wary of QQQ trending as strongly as first 5.
BUT as a practical matter,op is either trading to big, no system, or not enough chart study.
NO way the 2nd five years[after qqq uptrending 5 years] would cause me to not pull the trigger on a good trend.
Fear on pulling the trigger can be a good profitable help on qqq long exits or entry on inverse like SPXS; not a stock tip not a prediction/not bank insured
...........................................................................................