Why oh why can't I stick to my plan ?
- Thread starter cicsman
- Start date
There is a french website on which traders submit their trades (like recommendations). Everyone can look at each other traders. One consequence for me whas in fact to stick to my plan. Since you believe some other people are looking at what you're doing, you feel you have to be consistent with what you said before. This website is www.boursematch.com and there is a US version which started last year: www.tradermatch.com
I'm not convinced that that's a necessarily good thing. Market action may cause your strategy to call for an about face. What if you feel locked into the view you gave others earlier? Will you feel the need to convince these other people that you have a legitimate change of course due to your strategy, rather than that you are merely wimping out? Perhaps I'm wrong, but I'm not sure that adding extraneous variables simplify the problem. Just my opinion.
Cicsman,
I imagine your problems stem from the fact that your plan is not adequate and in your mind, you know this and you are overiding it.
Try this exercise.
Step 1
Start with 3 positions....long short and flat.
Now define the conditions under which you will go long or short ( flat is your default position)
Step 2
Then caculate risk. ie you are prepared to risk 3 ticks.
Now if there is a 90% chance that given the conditions in step #1, the price will not advance more than 1 tick before it reverses, then to go long you need to enter on stop 1 tick above the last low with your pro stop 2 ticks below the last low.
These points need to be observed not just plucked out of thin air.
This is just a starting point for your logic, but it is a good one.
And never let a winning trade side into a loss.
Good luck
I imagine your problems stem from the fact that your plan is not adequate and in your mind, you know this and you are overiding it.
Try this exercise.
Step 1
Start with 3 positions....long short and flat.
Now define the conditions under which you will go long or short ( flat is your default position)
Step 2
Then caculate risk. ie you are prepared to risk 3 ticks.
Now if there is a 90% chance that given the conditions in step #1, the price will not advance more than 1 tick before it reverses, then to go long you need to enter on stop 1 tick above the last low with your pro stop 2 ticks below the last low.
These points need to be observed not just plucked out of thin air.
This is just a starting point for your logic, but it is a good one.
And never let a winning trade side into a loss.
Good luck
Backtest your plan to death, to prove to yourself that its a winning plan...
Only when you have the resulting supreme confidence, will you be able to execute with supreme confidence, and not be concerned about any given trade... cos you know that you will make good money every year...
Only when you have the resulting supreme confidence, will you be able to execute with supreme confidence, and not be concerned about any given trade... cos you know that you will make good money every year...
LOL! Let me give you my personal opinion about Grob109 and then a concrete suggestion.
Grob109 and his posts epitomize the old saying, "if you can't dazzle them with brilliance, baffle them with B.S." Don't be fooled by his obfuscations. I believe he does it because being opaque and speaking in riddles hides his ignorance and keeps his Grobians (those who don't know better) hungry for more.
Notice he gives no useful suggestions. To say you need to review 15 or so plans and, BTW, don't consider any of less than 100 pages is asinine. Einstein's Annus Mirabilis Papers totaled less than 100 pages!
Trading isn't rocket science. Here's a simple, concrete suggestion: get a copy of The Original Turtle Trading Rules by Curtis Faith and use it as a shell for your plan. It's about 30 pages long and regardless of what some might say, is a complete methodology that was actually used to successfully pull billions of $ out of the markets. I'm not advocating that you use the Turtle System BTW... just that you use it as a checklist to make sure your plan contains what's essential.
Grob109 and his posts epitomize the old saying, "if you can't dazzle them with brilliance, baffle them with B.S." Don't be fooled by his obfuscations. I believe he does it because being opaque and speaking in riddles hides his ignorance and keeps his Grobians (those who don't know better) hungry for more.
Notice he gives no useful suggestions. To say you need to review 15 or so plans and, BTW, don't consider any of less than 100 pages is asinine. Einstein's Annus Mirabilis Papers totaled less than 100 pages!
Trading isn't rocket science. Here's a simple, concrete suggestion: get a copy of The Original Turtle Trading Rules by Curtis Faith and use it as a shell for your plan. It's about 30 pages long and regardless of what some might say, is a complete methodology that was actually used to successfully pull billions of $ out of the markets. I'm not advocating that you use the Turtle System BTW... just that you use it as a checklist to make sure your plan contains what's essential.
I wouldn't spend too much time on this question at the moment. Honing entries is not a critical skill at the beginning, as long as your entry point doesn't fundamentally change the risk/reward equation for the worse.
A solid risk management plan is the first item to work out. Fortunately, a good plan is easy to find and easy to utilize; the hard part is the willingness to apply it each and every time. You can only take from the market what the market allows you to have, and it can only take from you what you choose to let it have.
Stops should be based on technical levels (objective), and not how much you're willing to lose (subjective). Once you have your stop level, figure out how much you reasonably expect to profit and make sure the equation makes sense (you shouldn't risk $20 for the chance to earn $5).
Once you have these two points then you can determine the range in which you need to enter to make it a worthwhile trade, as well as your position size based on the equity at risk relative to your account size. Sometimes the market won't trade to a level that makes for a sound entry. You may also find that even with the minimum position size, the equity at risk for a particular set up exceeds a reasonable amount to lose given your account size. In the long-run you're better off letting these trades go so you can save your capital for more appropriate opportunities (there's always another one around the corner).
You're going to have to figure out the trading plan for yourself. Trading strategies have to mesh with your personality and trading style. It sounds like you're listening to your instincts rather than having a systematic approach (you don't have to be mechanical, but you should be able to explain your strategy to another person without bringing instinct or your gut into the conversation). I have pretty good instincts about price movement, but I expended a considerable of equity to learn that instinct is a great complement to a trading plan, not a substitute for it. Instinct is an advantage when you get around to honing your entries/exits.
While there is no real substitute for trading with actual money, simulators can be handy for testing different strategies. A sound risk management plan is less open to interpretation, and you just need to decide whether you're going to a) adopt a risk management approach similar to what I described above and stay in the game long enough to ride out the learning curve, or b) keep winging it until you run through all of your trading capital.
Regards,
FaderTrader and QQQShort have made the best points so far in this thread. They ARE REALLY onto something here.
AND
Your plan is for swing trading as you readily admit, however your execution behavior is that of a daytrader. That is your problem. You entered early because you saw something in the price action, momentum, volume, or whatever and that is fine when you are daytrading. It does not correspond with the swing trade setups involved in your plan. You are mixing strategies which adds a level of complexities to trading that a beginner doesn't need.
AND
Your plan is for swing trading as you readily admit, however your execution behavior is that of a daytrader. That is your problem. You entered early because you saw something in the price action, momentum, volume, or whatever and that is fine when you are daytrading. It does not correspond with the swing trade setups involved in your plan. You are mixing strategies which adds a level of complexities to trading that a beginner doesn't need.