Registered: Oct 2010
07-25-12 09:35 PM
Quote from Crude Man:
If I can become comfortable holding a position I'm in without becoming overly worried about what the trade is doing or going to do, I feel like I can cross the threshold of successful trading.
How does one become comfortable with ambiguity?
Why is it so hard to stay in a trade even when I trade one lot, and I am not trading scared money, and I well capitalized.
How do other traders deal with this affliction?
I immerse myself in my historical trading data. I don't care what anyone says, historical data can teach you something about what to do going forward. I'm collecting about 30 pieces of data per trade. I just ran an analysis today on some new data I've collected this month and it showed me that an outcome that I really don't want only happens a small percentage of the time, so I shouldn't let that possibility dominate my decision-making process. Yes, things change, but seeing the data make you realize that you are projecting those worst-case outcomes as the typical outcome, when in fact they are not the typical outcome, they are outliers and are likely to remain outliers. As long as your historical data doesn't make you overconfident and willing to risk too much on a single trade or set of trades, I see no real downside to collecting as much of it as possible. Think back to "Reminiscences of a Stock Operator" and in the first chapter Livermore talks about all the historical data he would collect based on his early tape-reading exercises. I would say that after capital, data is the second-most important trading resource.
Figure out what your specific data needs are for your particular fears and start collecting it. If you can get it from your prior trades, all the better, so you have a lot of data right from the start.
Another thing, and this is a little riskier because not everything that works works on multiple instruments, but if you can expand the number of things you trade, that can help, since you'll be more diversified in terms of your opportunities. I monitor 4 different markets at this point and I might get a trade in 2 on a given day, but I actually average less than 1 trade taken per day across the 4, so I know that it's sometimes easy to focus on the 1 potential outcome of that trade, but now it is a lot better than when I only traded one instrument.