I'd say that if you have a winning system that's consistent through a wide variety of market conditions, back-tested and forward tested in a live simulator with great results, but your performance suffer with live money, then yes, you may have a psychological issue. Do you have such a system? If not, I think you're starting in the wrong end.
That is the typical thinking of someone who is starting with trading and still believes such a system exists... - "consistent through a wide variety of market conditions"->> how much "wide"?.. - "back-tested"->> over what time period? - "and forward tested in a live simulator with great results"->> never heard of "forward testing"... Only present exists... But AGAIN, not a post about technique... If you don t believe psychology is important, you have the right to have that opinion, just pass your way to another section of this forum... Schwager is good, but he does nt tell you recipes to try to fight those bad habits. Just that they are just "normal" human biaises, even for world-class traders...
Two logical ways to treat a winner... 1. Take-a-shot at a price extreme.... selling into a high or buying/covering into a low. 2. Market has reversed enough to suggest "shouldn't hang onto this any longer". #1 is more of a guess, but both are legitimate. I don't agree with "setting targets"... unless they are supported by support/resistance.
I think psychology is important if that is your actual problem, but for most people I think psychology becomes a convenient excuse when the truth is that they don't really have an understanding of the market that they're trading or what they really are trying to accomplish, much less an actual trading plan. If you have objective rules for entering and exiting, it's not that hard if you know your market, know what's a normal amount of retracement (adverse price movement), etc, but if you're trading completely from the edge of your seat based on INTUITION, you will of course be dominated by your emotions, since you more likely than not, do not have a winning system in the first place. Anyway, you might find value in the books of Steenbarger. And if I remember correctly, he say pretty much the same thing as me. It doesn't matter if you're 'trading in the zone' if you don't know what you're doing.
Your responses suggest that the problem is less psychology and more that you are unprepared. You don't know what you're looking at so you don't know what to do with it. However, if you prefer to go the psychology route, Douglas is as good as any. At least he will help you develop a mechanical system so that you don't have to think about what's in front of you.
That s exactly what I am talking about.. you buy at support S and try to sell at resistance R (one of many many trade set ups)... Everything goes by the book, you get out around R, and then, suddenly, the market breaks the resistance, and is off way above what you (or most market particpants obviously) could expect... But again we are talking technique and not psychology...
WHY "... suddenly, the market breaks the resistance, and is off way above what you (or most market particpants obviously) could expect..." is part of the psychology play, too.
I do have rules of course... and yet when I use those rules I sometimes miss some huge opportunities, that I feel I should not have missed... Or take trades that were not "good" enough/extreme in retrospect (like every trader I guess). Ok, writing down the name of the books, but since people here do not appear to believe in the importance of psychology, not sure those books were of any help to you
And that may be your problem, not "psychology". Why "try to sell at resistance"? Why not just allow price to do what it's going to do and not be so afraid of what you don't understand that you have to bail at the least hint of struggle?
Because there is no reason of getting out too early of a winning position.................... "Cut losses, let profits run", remember??... Don t think I need to explain why... Unless you are scalping for ticks of course (which I sometimes do). But here am talking more of ID trades. Nobody knows WHY it breaks (and no good trader should care either...).