why can't i stop after 3 losers?

F

frank01st

i have a written rule regarding money management. i traded well yesterday. but today i took 7 trades all losses (though 3 were half-sized "foot soldier"), even though my rules are to halt trading after 3 consecutive losers ..... and switch to demo account.

why can't i halt at 3 losers per plan? i do have a written plan that i looked at before each trading day. only 3 pages, not those 20 page comprehensive never-read-again plans.

i took some half-sized entries, stopped, but felt i had not yet reached my daily loss limit. so i continue on. the red P&L would have alarmed me if i had took 3 full sized stopped outs. as it is, i ignored the P&L to focus on what i should do the next trade. every new trade is independent by itself.

i averaged 77% winning percentage trading fulltime so i was confident my next trades would be good. i kept taking losers. by the time i finally caught myself, i had taken 7 trades all losers (3 half-sized and 4 full-sized). i surprised myself ...... how can i kept trying new entries with no concern for winning percentage. i would have stopped if i don't get 1 out of 3 or 1 out of 4 correct. but today i took 0 of 7. basically out of control. discipline lost. i am disappointed with myself as i'm not new to trading been trading since 1998 and fulltime since 2007 (and profitably paying bills). how can i suddenly lose the kind of discipline i worked so hard to develop? i kept trying next trade and next trade, making novice mistakes of getting it back. this is depressing .....

why can't i stop myself after 3 losers?
 
Quote from frank01st:

i have a written rule regarding money management. i traded well yesterday. but today i took 7 trades all losses (though 3 were half-sized "foot soldier"), even though my rules are to halt trading after 3 consecutive losers ..... and switch to demo account.

why can't i halt at 3 losers per plan? i do have a written plan that i looked at before each trading day. only 3 pages, not those 20 page comprehensive never-read-again plans.

i took some half-sized entries, stopped, but felt i had not yet reached my daily loss limit. so i continue on. the red P&L would have alarmed me if i had took 3 full sized stopped outs. as it is, i ignored the P&L to focus on what i should do the next trade. every new trade is independent by itself.

i averaged 77% winning percentage trading fulltime so i was confident my next trades would be good. i kept taking losers. by the time i finally caught myself, i had taken 7 trades all losers (3 half-sized and 4 full-sized). i surprised myself ...... how can i kept trying new entries with no concern for winning percentage. i would have stopped if i don't get 1 out of 3 or 1 out of 4 correct. but today i took 0 of 7. basically out of control. discipline lost. i am disappointed with myself as i'm not new to trading been trading since 1998 and fulltime since 2007 (and profitably paying bills). how can i suddenly lose the kind of discipline i worked so hard to develop? i kept trying next trade and next trade, making novice mistakes of getting it back. this is depressing .....

why can't i stop myself after 3 losers?
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The reason is

More than 90% of small traders lose. They just lose!
 
Quote from emg:
The reason is
More than 90% of small traders lose. They just lose!
More...
If you have nothing constructive to say, just shut up and leave him alone. You don't need to read or response to this thread.
 
You cannot control the market, you can only control how you interact with it. If you are having issues restraining yourself per your own rules, you need to stop live trading and evaluate what is going wrong. Once you figure that out, then get back on the horse. But the last thing you want to do is spiral out of control.

Take a deep breath and get to work (analysis of those trades)

Quote from frank01st:



why can't i stop myself after 3 losers?
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If your trading strategy actually worked (ie. had a backwards and forwards proven statistical edge), you would want to take as many trades that matched the strategy as possible regardless of what happened to the most recent previous trades.

The conclusion here is that you must not in fact have a strategy with a real edge, and instead are just guessing. I would quit trading until you are in possession of such a strategy if I were you - that could potentially include quitting for good if you're incapable of developing such a strategy.
 
Frank,
I suggest you switch to demo account for next 5 days. I know demo trading does not pay bills and you desperately need to get back your losing week or losing account. But since you opened yourself to ET, you might as well prove to the others that you can trade as you said you can.

Post your next 5 days' demo P&L on this thread. In demo it is natural to test all kinds of setups and hunches so if you don't have an edge as someone mentioned above and just guessing directions, you will lose even more on demo trades. Yes you probably will catch a few good winners on demo that you wished you had taken on the live account, but wait. Prove to this thread that you can accumulate profits for next 5 days. Show us.

You want to get back to real trading as soon as possible to erase those losses. But until you can show 5 good winning demo P&L days, you have no right to leave demo account. You are not qualified, you failed the test. And you cannot cheat by switching back to real account when you see a "high odds" setup while trading on demo, and selectively switch between demo and real. Do that high odds trade on demo also and make it a big winner. And make 5 good winning days on demo, if you can.
 
Quote from frank01st:


how can i suddenly lose the kind of discipline i worked so hard to develop? i kept trying next trade and next trade, making novice mistakes of getting it back. this is depressing .....

why can't i stop myself after 3 losers?
More...

Don't be so hard on yourself. Most people can't stop after eating 3 cookies. The reason is because humans are state machines. When you wrote the plan and reviewed it before trading started, you were in a different state than when you took the 3 losers. You entered the mad state after the three losers and the mad state is not disciplined.

Your different states are not consciously aware of other states. When you are in a particular state, that state thinks it is the only state in existence ever. When you wrote the plan, you were in an unemotional state and your unemotional state believed it would have the discipline to quit after 3 losers. However, your unemotional state did not realize you would be in a mad state after the 3 losers.

To get past this obstacle, recall the legend of Odysseus and the island of the Sirens. To get past the island, Odysseus instructed his crew to plug their ears with wax and tie him to the mast. He ordered the crew not to remove the wax from their ears, nor respond to him in any way until the ship had safely passed the island.

When the ship got within hearing distance of the Sirens, Odysseus become mad. He ordered the crew to turn toward the island and threatened execution to all who disobeyed. The crew ignored him. They had planned in advance to to obey the logical Odysseus, not this insane person who had temporarily entered a mad state. By sticking to their plan, the ship passed the island safely. How can you lash yourself to a mast so that your mad state does not destroy your account due to the siren call of daily profit?
 
Quote from Roark:
Don't be so hard on yourself. Most people can't stop after eating 3 cookies. The reason is because humans are state machines. When you wrote the plan and reviewed it before trading started, you were in a different state than when you took the 3 losers. You entered the mad state after the three losers and the mad state is not disciplined.
Your different states are not consciously aware of other states. When you are in a particular state, that state thinks it is the only state in existence ever. When you wrote the plan, you were in an unemotional state and your unemotional state believed it would have the discipline to quit after 3 losers. However, your unemotional state did not realize you would be in a mad state after the 3 losers.
To get past this obstacle, recall the legend of Odysseus and the island of the Sirens. To get past the island, Odysseus instructed his crew to plug their ears with wax and tie him to the mast. He ordered the crew not to remove the wax from their ears, nor respond to him in any way until the ship had safely passed the island.
When the ship got within hearing distance of the Sirens, Odysseus become mad. He ordered the crew to turn toward the island and threatened execution to all who disobeyed. The crew ignored him. They had planned in advance to to obey the logical Odysseus, not this insane person who had temporarily entered a mad state. By sticking to their plan, the ship passed the island safely. How can you lash yourself to a mast so that your mad state does not destroy your account due to the siren call of daily profit?
More...
Good advice. I have heard similar comparison to "boss" vs "idiot". As you said, when writing the Trading Plan it was the "boss" who did the writing and planning. But during the trading day, in the middle of trades, fighting emotions of P&L and the need to be correct, it was the "idiot" who took over the mind. I like your story and you gave me some thoughts about how to tie myself to a mast when the mad state or "idiot" took over .....
 
Quote from Roark:
How can you lash yourself to a mast so that your mad state does not destroy your account due to the siren call of daily profit?
More...
i appreciate the kind advice. i will need to think hard about this, how i can make rules and ensure the mad state follow the rules ...... if the mad state can actually follow rules :-(
 
Sometimes traders actually do employ a boss, but they use a different term: coach. Often all a coach can do with a mad player is to bench them until they cool off. Other times the coach will actively attempt to change the mental state of the players.

Do you recall the story of the Gipper? Rockne was trying to salvage something from his worst season as a coach at Notre Dame. To inspire the players he told them the story of the tragic death of the greatest player ever at Notre Dame, George Gipp.

Rockne's team was terrible. They lacked talent. But after he told them the story of George Gipp at half time in the 1928 game against Army, the players were like men possessed. The went back out on the field and kicked Army's ass.

Physically, the Notre Dame players were the same. Rockne's speech had temporarily changed their mental state.
 
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