Thanks all for all the feedback and advice! It's strange how I can be consistently winning for 3-4 months in a row and have a blowout wipe out all the gains in just 1 week. It's something I'm trying to work on. Something just changes when I seem to be doing well and I give back the markets what I made and more. I gotta stick to my rules and stop bending them when I get frustrated.
Get your EGO out of the way and let yourself be "wrong" and then move on. On the path of profitable trading there are always stones. It makes no sense to kick the rock that just tripped you, as it only invites further injury. *************************************** "To the last I grapple with thee; from hell's heart I stab at thee; for hate's sake I spit my last breath at thee." - Herman Melville, Moby Dick *********
yep futurecurrents' advice is so right! that's the sign of your EGO speaking or rather SCREAMING OUT LOUD, "I'm RIGHT! I'm RIGHT! The market is wrong! I'm right!" I said hell it to ego a while back and my trading has improved dramatically since then. I'm only concerned about making $. If I'm wrong then I'm wrong. I move on. Or let the market tell me what to do next. No point fighting the market. It's a very expensive thing to do. So, no matter how much you have gained over the last 4-6months or even YEARS, you can still LOSE it all if you behave in this manner again! There are hedge funds who blow up because they can't admit their mistakes or doubling down when they are down. Hey, look at Victor Niedderhoffer and his blow up. Even having a $100M is NOT enough to save you if you have this psychological falliblity. I'm not saying I'm perfect. But I continuously analyze my mistakes and try to avoid them. That's the only way to move forward. good luck dude!
Sanjuro, I doubt that any of us can claim not guilty to having done at least some revenge trading at some point in time. Every so often I still find the urge to do it, but almost always talk myself out of it. Still, every so often, I'll take on a revenge trade, kind of rare now though compared to when I first started. Here is one possible solution. (you probably won't try it - but here it is anyway) Withdraw all of the funds from your trading account except for 2,500 bux. Then trade. If you trade down to 2000 bux you are allowed to deposit 500 bux *No More* than that, to bring it back to 2500. When you successfully trade your 2500 up to 5000. Then and only then are you allowed to put the rest of your funds back into your trading account. By the time you reach 5000 you will have developed a bit of patience and cunning, as well. That should put a damper on the double-up, get it back, trading impulses.
I've heard it said that the definition of "crazy" is doing the same thing over and over while expecting different results.
Put a quota on the number of trades per day. When quota reached you quit for the day whatever the result. When it is ok after a few weeks/months then you can increase the quotas and you will perceive that again you lose consistently: it means you overtrade and have to lower your quota again.
Do you want to trade for a long time...? Then honor this rule: do not average a loss or double your size against the trend and/or when you are angry or frustrated or doing so without a valid reason OTHER than making up a loss! EVEN if you look back and hindsight shows you that it might have worked at times. Never breach that rule. Let the dust settle. Period! Opportunities will always appear again, but money is harder to earn back. IF you want to add on... do so with a winning trade when you are in sync... then maybe double/add on within the context of your management principles. Can average up within reason... but not down when it is secondary to a large loss (imho). Do you double down on a pair of 6s in blackjack or a pair of Aces? I never add to a loser... when many many times I would have done well. Witness my ELX overnight when it crashed post-earnings from 24 to 17-18. Instinct said buy more.. sell more option premium. But I made almost every dime back without a mad rush to add on to a loser. When it started to go higher and appeared like it was seeking to fill the large gap... and the overall sector and market was strong... and I was on the correct side of the move once again... then I added. Had ELX continued lower... I would not have been stuck with a mounting loss, and could have taken my lumps and moved on. ELX recently hit 23+! . Ice
So true Harry, this has worked for myself and I suspect a few other active traders on this board. My magic number just happen to be 3 trades daily. If I havent made a profit by then..it just isnt my day and all I will end up doing is churning more comm.
Were the gains you made in those 3-4 months reliant upon you doubling up after losses, adding to losers, revenge trades or any other classic no-nos? If so, sorry to say, but you are probably in deep doodoo. If they weren't, and your gains were "legitimate", then why in the world do you put yourself through hell just so that you can have a winning day?
I find the problem you have comes from discretionary trading, once you have a system that has been tested and shows proven results and is rule based there will be no point in you getting in and out of trades on a whim. Go to the training section of elite trader and read trading as a business, he describes the different stages a trader goes through on the path to successful trading. Discretionary trading comes before mechanical system trading. oh and nitro is a clown