I'm a relatively new trader... I've been trading retail for about three years, and I've been trading with a prop firm for almost 9 months. I almost walked away a stable job to trade prop full time... It's a goal of mine that I am working to achieve. In working towards this goal, I am continuously reminded that I AM MY OWN WORST ENEMY. I am constantly trying to short a top, or buy a bottom... "Catching a falling knife"... In my case it's more like catching a running chainsaw. i.e.: today (8/21/2015) when $TICK was -1000, I would short the VXX, expecting a bounce... The S&P 500 fell 64 handles today... Guess how that worked out for me...? Most times I'm disciplined enough to REALIZE my error, and either avoid the bad trade, or realize after dipping a toe in the water with a small position, and then closing the "bad" position. Sometimes I will have BAD day - something will be on my mind or I will just be angry. During these times I take excessive risk, and I make DUMB ASS mistakes. i.e.: keep adding to my losers as i'm trying to catch a falling knife. What are some of your dumb ass mistakes, and how long did it take you to finally stop making the mistakes, or do you still make them every now and then...?
By far the easiest dysfunction: Overtrading or impulse trades. Top calling. Bottom calling. Not trading at key levels or forgetting to consider them before putting the trade on.
Sounds like you've been building bad habits for years, which you might not be able to fix in any reasonable time. Best thing for you is to do something else.
I think there's a key difference though - he's acutely aware of what the habits are, meaning there's some hope there.
My retail trading was minimum, it was more or less a learning experience. Same with the first few months trading prop. My technical skills are improving and I'm starting to become consistently profitable - I just need to work on discipline. I don't think it makes sense to throw in the towel just yet. After touching a hot stove enough times, one should eventually understand what's wrong and correct it. I would presume that even those who successfully trade for a living still make some mistakes every now and then.
I've been trading 10 years, 3 full-time, and still make mistakes. I study my mistakes, and hit the books to help raise the bar. I'll be reading a book this weekend on put strategies by Thomsett. After this past week, I should have had a huge profit, but only ended up with tiny money. Got to ferret out the problem, and go forward. All part of the strategy. I have a hand written, triple spaced, single page, swing trade game plan, that I have worked and reworked many times, pinned on a bulletin board that's very close to my desk, and this helps to keep me focused. If I was to give free advice (though I'm not an advocate of anything that's free), the two most important things (and they're in my game plan) to concentrate on are vol (iv) and b/a spread. And if those things are not in your parameters, forget it, find another derivative. It is so easy to go …well…if…maybe…but. Been there, done it and lost. Get into the win column and stay there. Hope this helps, and good luck!
Seems like you want to be right rather than make money. Go with the flow. Nothing wrong with trying to catch bottoms as long as you do it with small amounts and dont try to stand against the tide. You also need to be prepared to be wrong multiple times and yet still keep trying. Eventually you will catch it and it pays for all the losers. If you do catch a winner leverage into it instead of adding to the losers. Of course its easy to say and difficult to actually do. Made a whole load of dumb ass mistakes - ended up with 20,000 shares instead of 20,000 USD, clicked buy instead of sell doing options spreads, bought in wrong account, but most expensive has been not accepting i was wrong.
"I am constantly trying to short a top, or buy a bottom." In other words, you think you can predict the future. So the question you should be asking yourself is why you think this. Have you had psychic experiences in the past? Have you predicted the final score of a sports event at the start of the event? If yes, have you repeated this feat with other sporting events? Have you shaken a healthy man's hand and just *know* he'd die from a horrible accident by the end of the day? Or week? Or month? Or year? What makes you think you can predict the future, particularly in the context of the financial markets? Once you realize this conceit comes from ego and/or wishful thinking, the solution is clear: Man up and stop being a putz. Do the right thing. It isn't rocket science. Just do it.
Great feedback guys. I'm looking at these replies and smiling to myself. I know better then this. I shouldn't have traded at all today. I still work and I had to let someone go today. It was my first time firing somebody. I was on the road in the AM and I didn't open my DMA software until 2PM, immediately after I axed a colleague. I did well trading on the short side yesterday, and I came in to what looked like an oversold market - I was certain that there would be a reversal and fade into the close. I had to be right... That was the root cause of my problem. The fact that my head was in the clouds distorted my judgement. I journal a lot of detail and I also spend a lot of time reviewing my journal and planning for the next trading day. I've seen these mistakes before - I've gotten better at managing them. Today was just a mental block. I should have stayed on the sidelines. What other imperfections plague you guys?