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?
Food for thought Sir, Other than being born..., which you must have been as you are reading this And dying And of course paying taxes, or facing legal action if you don't (assuming one is making enough) ---------------------------------------- What in life is certain.... (ambiguity/ uncertainty surrounds us every day - most simply choose to not believe it) Hence when it come to an in your face ambiguous/ uncertain environment such as the mkt - most buckle and/ or simply can't function Please; Before responding, take some time and think through this - write down your thoughts - work through your thoughts to a conclusion... It is important to work completely through it... so you get it.. so you can live and breath it... more importantly - so you can trade it Ultimately you get to a point where you place a trade, (with a stop and a target) - price will hit one or the other - then its on to the next one RN
Yes, ambiguity is what wrecks minds of most who try trading and is a huge barrier on the way to consistency... But the correct way to deal with it is: if your system has positive expectancy, result of single trades is close to random, but result of large enough sample size is certain. Like running a roulette table in your own casino. Think not about single trades, think of it as working your strategy as a whole.
odds are at least from my personal experience when I started I started with like 250 bucks and was trading FX.. (whoo hoo right) while I wasnt upset with losing any of the 250.. my personal ego didnt want me to lose one trade.. because I had this ( oh if I cant be right consistently and make boat loads of money consistently then I will never be a good trader and what if the market changes and my system stops making money how long will it take me to know... basically it was just me freaking out in the back of my mind about needing to be right all the time about where the market will go and if I didnt extract every dime I could I would beat myself up now 8-9 years later ... I wake up .. yawn a little bit walk over to the computer and get a questionable start ... I barely care to watch the open.. I lay own anywhere from 5-25 small trades scattered over stuff Ive been watching drop Break even stop losses on everything in profit from the day before align everything up so that I make money off the rates and dividend or I play tight no rates no dividends in bear markets... I follow daily/weekly/month trends and then I go for a jog. I know ill make money, I dont really give 2 shits about being right because I dont have those cant make it doubts, I protect everything quickly, and I move on with my life so I dont sit doubting my choices.
1. Experience 2. A method that fits you, which has positive expectancy 3. Psychological self-improvement (The Market is very good at exposing our issues) 4. Wash rinse and repeat.........
If you re looking at a shape, then ambiguity nevers occurs (see page 270 of Kock's "Quest for Consciousness"). You may be expressing a condition you experience because you do not have a way of understanding. Incompleteness is what most always is going on with OODA type potential traders. Betting is not a good way to trade. As you see RN bets and doesn't even process the consequences. An alternative is to "know that you know all of the time". Most people cannot deal with systemmic thinking so they do the betting routine. This means they are "in" or "out" of the market customarily. Stress will be normal and you could record your stress as time passes. You may have two sets of feelings. Behavioral Finance explans how to iteratively refine your way out of stress induced by a less than optimum trading approach. Most people "give up" refining when they can survive on their level of performance. If you processed the times of ambiguity as signals for an opportunity to repair your methods, then you would rise higher in the pecking order after having added the appropriate refinements. As you see, most people recommend acquiring thicker skin by just doing what you do. There are two sets of criteria in trading. One is for "holding" and the other is for understanding "End Effects". They are mutually exclusive. If a person is using entry/exit thinking, he is not entertaining the "hold" criteria, ever. When this is the case, there is no presence of the "entr/exit" criteria for long periods of time during RTH. What usually surfaces is anxiety, fear and anger . These represent not being able to satisfy the NEED to find a set of criteria that cannot be present. In summary, I have pointed out to you specifically what the context of your mind's difficulty is. You can take the advice given to you by others as a pragmatic substitute. But continuing betting is not a good idea.
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.
You need more experience. That will give you the confidence to do the right thing, because you have seen it happen so many times before. Just keep studying, keep trading, keep reviewing your decisions and your results, and work on improving your skills. Over time your ability to 'sit' will improve, just like a boxer who works on his skills will get faster and hit harder and more accurately.
1) Do what you can to shorten your time horizon. 2) It can be "easier" to earn $1, one million times, than to earn $1000000, one time. :eek: