Yukoner's Psychological Trading Journal

Day #17 - I slept restlessly, and kept dreaming about being in a trade and almost to my profit target but unable to close it... seriously. Sounds kind of weird I know, but that is what happened. Obviously my brain is uncomfortable with this idea.

So I went into trading today determined to trade correctly with my methodology and according to the new experiment with just holding a trade to completion, and experiencing "being wrong". My two day experiment.

I put a trade on exactly like I should have, but then I had to sit there and watch it go against me. It came back to my entry and I was up two ticks, and I so wanted to close it... but that wasn't in the new plan. So I didn't, all though I could feel my brain "naturally" wanting to close out the trade and get flat. Then it actually went in my favor 14 ticks exactly, and I adjusted my stop loss to breakeven -7... ONLY to see the market come all the way back to my entry, and then go against me. Seriously sucked to watch the profit just go away, and then I was almost certain I was taking a loss. Crazy, but it came 1 tick away from stopping me out... then just plummeted down. Suddenly there I was with a 30 tick gain.

But I had to sit there for 26 minutes and just endure the feeling of being wrong. Of trading wrong. Of staying disciplined enough to not change the plan.

There was definitely more opportunity, but my time was limited today, and so I didn't do any more trades. It was a good exercise to be mindful of just what I was feeling...

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Yukoner said:
Here is the experiment:

Nothing else about my trading plan changes with two exceptions:

1) I set my stop loss risk and my take profit and then can make no trade adjustments with the exception of #2.

2) I can make one adjustment to my stop loss, but only if I am in profit the same amount of the original stop loss, and then I can only adjust stop loss to breakeven minus half of original stop loss.
More...


If price is in..., or decides to - range - and you've implemented step 2 - this could kick your ass - stop wise

If price is in..., or decides to PB (which PBs are a form of various ranges ) - and you've implemented step 2 - this could kick your ass - again..., stop wise

If price acting..., or begins acting volatile (ie wide range bars... or violent back and forth - and you've implemented step 2 - guess what will happen


now - if price moving relatively volatile free..., in one direction - then I'd say you're golden

This just my dumbass opinion of course



Trade fails where the trade fails - you think it coming back..., exit..., and begin looking for the next signal

We must keep our approach as simple as possible - and it very easy to overload our ass


RN
 
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NoDoji said:
Have you tested all your previous trades (the ones that were entered by the rules of your plan) to see if # 2 trade management produces a more positive result than #1?

The only reason I see to move a stop loss closer is if the stats or rules based on stats support this move.

For example, I have a particular entry method for range and counter-trend trades where it makes sense statically to move my stop to break even if a certain level is reached. In a with-trend situation, however, this move would result in less profits over time.

I've never had a positive result over time from moving a stop somewhat closer (such as a 15-tick stop moved to 10 or 7 or 5 ticks). This has taken me out of far more profitable trades than it's saved me from full losses. So I'd be reducing my stop loss risk by half in very few instances, while increasing my risk of missing out on my profit target in more than 70% of instances.

Your trading plan is probably a lot different than mine and so #2 might make sense, but I wouldn't arbitrarily apply such a rule without stats to back it up.
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Thanks @NoDoji . Yes, that all makes sense. It is wrong to trade this way with the stop adjustment. I have no support for it whatsoever, it is just arbitrary. The point of this two day experiment is to simply force me to endure being wrong.... and to hold on to the trade until I am either stopped out, or my original take profit is hit. The way I see it, two things are accomplished:

1) Any profit made will be only because the trade was held to the profit target. So forced to hold my winners to completion. Something I have struggled all month with.
2) I am adjusting a stop based on a fictitious number with no edge behind it, and no opportunity to lock in any profit. That feels very wrong to do.

I liked Iaccino's comment, that the clearest you will think is before you are in the trade. Makes a lot of sense to me. So I am then trying to pay attention to how I feel, to what is happening in my mind AFTER I get into the trade. That "AFTER" being what is causing me to screw around with my methodology and mess up my edge.

Does that make sense?
 
Stop equating a losing trade with being wrong


You wait on your signal
You enter
You id a stop
You id a profit target
You exit soon as either is hit

You've done your job

=============================

You have no control what the mkt does after entering - so how the hell can you be wrong

No way in hell you can know what the mkt will do next - unless you're a mind reader


Mkt / trading is uncertain - period


RN
 
Yukoner said:
I put a trade on exactly like I should have, but then I had to sit there and watch it go against me. It came back to my entry and I was up two ticks, and I so wanted to close it... but that wasn't in the new plan. So I didn't, all though I could feel my brain "naturally" wanting to close out the trade and get flat. Then it actually went in my favor 14 ticks exactly, and I adjusted my stop loss to breakeven -7... ONLY to see the market come all the way back to my entry, and then go against me. Seriously sucked to watch the profit just go away, and then I was almost certain I was taking a loss. Crazy, but it came 1 tick away from stopping me out... then just plummeted down. Suddenly there I was with a 30 tick gain.

But I had to sit there for 26 minutes and just endure the feeling of being wrong. Of trading wrong. Of staying disciplined enough to not change the plan.
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Now there's courage. Well done.

The trades that come within a tick of my stop loss and then make it back to my entry almost always make it to my target if it's a with-trend trade.

One thing: You didn't have to sit there for 26 minutes and endure anything. You can probably turn on a sound alert for when your trade is closed out and that will let you walk away until you hear it. :cool:
 
Redneck said:
Stop equating a losing trade with being wrong


You wait on your signal
You enter
You id a stop
You id a profit target
You exit soon as either is hit

You've done your job

=============================

You have no control what the mkt does after entering - so how the hell can you be wrong

No way in hell you can know what the mkt will do next - unless you're a mind reader


Mkt / trading is uncertain - period


RN
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@Redneck
Well said! And that is exactly the weakness I have discovered and am working though.
Losing trade = Being Wrong.

I need to remind myself more, that uncertainty can work in my account favor just as much as it can work against it. I have no idea what is happening, so all I can do is control my risk... just do my job.

Good Trades,
Yukoner
 
Been having a browse through this thread. Not much more to add to Redneck's great post above. Make the decison, accept the risk, walk away and let it run.

Random shit happens and you may always be able to come up with some psychological stuff in your own daily life to self justify why you did this or that etc.
 
COMMENT: Before I forget this, I want to blog it down. Both trades I have done, I felt like I was sure I would be stopped out. Felt like they were wrong and I had made a mistake. However, my focus was simply on doing the right thing... and trading with my new rules in this two day experiment.

That actually gave a certain amount of freedom to just accept whatever was going to happen. Even though I had to fight with the urge to "manage" the trade. I realize I am in Trader Disneyland with trying to predict market movement and make the right call.... rather I need to just take the trades based on the patterns I know and have been taught, and then let them work.
 
Day #18 - The day started out well, I had a bit of a headache (probably that 3rd pint of beer last night) and I was feeling a bit cautious about trading. Waited until after the EIA report to put on one of my favorite trade strategies, and as I put it on it immediately went against me. Came back, and that "chimp brain" wanted to just close it out, get out at breakeven or so... but I didn't do that. Instead I walked to the kitchen and got a class of water.

"Ping" goes my computer, and I think yep, there it is I am stopped out. Wander back over to the computer, and wait... the market is in my favor. First thought that crosses my mind, "I must have got stopped out before it dropped my direction". I check the computer, and it was like I couldn't believe what I was seeing... there was a profit. My take profit had been filled. I was shocked. Funny eh, that I would be so surprised even though it was one of my favorite strategies.

The rest of the day, I stayed in that cautious mode. I saw one trade setup almost classic for me... I actually put in the order, then pulled it right before I would have been filled. That went right to my profit target and beyond with very little heat. I did have a short skype with my psych coach later in the day, and that was helpful as he was helping me with the fear thing... so I put on another trade at the ideal zone, and it came within 1 tick of filling me, then dropped 40 ticks to my take profit and beyond. Felt a bit frustrated, but didn't do anymore trading after that. Wanted to end the day on a high.

Topsteptrader has asked all live and combine traders to not trade Thursday and Friday with the light volume over thanksgiving. So I won't be trading Thursday or Friday. However, the next few days I am going to revisit this idea of just setting a stop loss and take profit and leaving it alone. This two day experiment has had some interesting information for me to process.

+296
 
Good job today taking something out of CL. Even though there was not much action today, it seemed like you stayed in control, which is key. Sometimes you miss the moves, I guess that is just part of the business. Look at it like your theory was right and that you are getting better at predicting moves, you just missed one. The funny thing is, the better you get, the more your theories will be confirmed, and it will seem like you are missing more moves. Don't get frustrated about it, use it to build your confidence.

I was wanting to probe for a long near the open of the session if price would have went a little lower, but it never happened. Instead, price took off without me and I stayed on the CL sidelines all day because I was not expecting much today and had some things I needed to get done. .

If you don't mind me asking.... What is your initial stop and profit target? Are they fixed, or depend on the situation? Maybe you mentioned this before and I missed it. Just curious...
 
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