Sounds like you are stubborn. You just talk about change. You don't actually make any changes. Practice feeling stubborn. Just walk around the house feeling stubborn. See where the ideas lead. Maybe on a very deep level you do not like change. That is interesting, because traders make money from changes. Perhaps you trade to experience changes, but the very process of change is traumatic for you.
Closing the position because it is going a few ticks against you sounds like fear. Fear of a larger loss, fear of being wrong, and a million other fears we give validity to. Before you start a trade do you have a solid stop loss? or even a stop loss area? I hope so, but it sounds like you are closing the position before it reaches the stop or stop loss area. if so, you are second guessing the trade probably due to fear. Its ok to readjust your stops during a trade if you have new facts that support the decision. if you are doing it out of fear thats an obvious problem. if you are changing the trade parameters after the trade is on, without any new supporting info, it sounds like you need to focus on why you are doing that. Is your stop loss to big in the first place? or do you just need to occupy your mind to avoid the fear? I try to take the trades and then set a stop loss order. Then if possible I walk away from the computer and come back every now and then to check on it. Or I pick up a book and glance over every page or so to see how its going. I know the stop will get me out if I am wrong, so I occupy my mind with other things to keep from focusing on all the bad things that could happen during the trade (of all the bad thoughts you get, how many have ever actually happened?) Sometimes I have to babysit the computer, IB does not provide stops outside of regular market hours. Right now I am short the Euro, its going well, but I have to sit here to make sure it does not go horribly wrong. I am up a few hundred per contract and I already moved my mental stop into a profit. in my mind I have already won on this trade, now its just a matter of how much. Its easy to get out now with a profit. the problem is if you get out just to book a profit the trade will always continue in the direction where you would have made even more money. Then even though you made money you are upset because you left money on the table. taking profits at the right point is very hard. You never know until after the trade what could have happened. I would suggest writing the trade down before hand. Having your stop written down too. Then do not get out of the trade unless you hit your profit target or hit your stop loss. If you get worried look at the written stop loss and feel comfortable that it is correct for you. If you get panicky or scared you might also want to write down your feelings. I have learned that writing down your fears as they happen is a great way to get over them. In your mind they are huge but when you actually write them down they look stupid and childish.
Hello, The advice Jaronimo gives is exactly what changed my trading from losing to winning. I'll spare you the long version: Before I never used any type of stops. I would put on the trade and decide later when to sell (or cover). This was stupid (for me)! I would let my losses go so far against me, it made me sick, because I couldn't stand to lose that much. From reading books and the trading quotes on this forum, I set trailing stops with every trade, and NEVER cancel them ever. I use .5% as a trailing stop and it has saved my ass more times than I can count! The bad trades I place get stopped out within minutes. My great trades continue to rocket. As Jaronimo said previously, they are great protection should you get called away from your desk for something. I have learned to cut my losses short, which many say is the most important rule. Learning this has cost me 10% of my starting equity. I am still working on letting my winners run. I always leave money on the table which still bothers me, but I am working on it. Peabo
Peabo, If you have conditioned/trained yourself to take the loss or set the stop to take it automatically for you, letting your winners run is going to be one of the easiest and most gratifying/liberating things you will come to experience. Letting winners run will also make you wealthier faster than you ever imagined since you will find yourself having to make less trades and maxing each position out. I think one thing will serve you well in your conditioning, remember to trust yourself! Confidence in yourself and your methods is paramount in all trading and of the upmost importance in maxing winners out. Sounds like you still have a touch of ego getting in the way. Don't worry about being right all the time and you will find you will quickly gain the confidence to let your correct calls tell you themselves when you are no longer on the right side of the trade. I found that after I realized the markets weren't going to break me (due to the fact that I was trading correct size, had some money management wits about me and growing self-confidence) on each and every trade because I could take a loss within tolerances, I quickly found it easy to just sit back and watch my correct/good trades grow to their full potential. Your satori (state of realization/actualization, or unplugging from the Matrix ) moment sounds like it is close if you keep at it and in the right state of mind. If what you have posted is honest (I have no reason to doubt) then a time where you will not be either the happiest nor saddest, but enlightened is close at hand. Good Luck!
Don't work too hard at it! I went overboard with the "let your profits run" mantra and now I have the bad habit of making my winning trades into relative "investments" (as opposed to holding on to losers). Whenever I start off with a good open profit, I'll find some excuse to envision the market spiking/collapsing into the close, or looking for profit targets on longer time frames -- it's a definite hole in my game I need to close. Although it's ancient history now, one thing I do remember during my best year trading (7 figures) was still bitching everyday about leaving money on the table.
The topic is changing slightly and that brings up a question. How do you keep from leaving money on the table? I do not have a set way of addressing this. It changes depending on the day. I think it is still one of the procedures in my trading that I have never really sat down and put it on paper to figure it out. I have a few techniques i use, - I will continue to move my stop loss up with my profits, usually making it looser as the profits increase to give the trade plenty of room. Sometimes thats good, sometimes I leave too much on the table. - I put on a trailing stop. Very similar to the above but it means a lot less work for me and I can go to the gym and come back and not have to worry. Only problem is sometimes I get stopped out on a pullback. It usually goes one tick past my stop, which makes me crazy!! - The third way I use is I continue to analyze the trade and I get out of a long trade at the point I think would be a good time to take a short trade and vice-versa. Realistically i could probably play the short side too if my analysis is correct, but I have not tried that yet. I think the last one is probably the best as far as not leaving money on the table. What techniques do the rest of you use?
As Jesse Livermore stated (loose quote), "Don't worry about the first or last 1/8th." Personally, I found as my confidence in my trading and self improved, my execution did as well. Wondering or beating yourself up about leaving money on the table is only natural I think. As you gain experience in the markets you'll quickly learn that catching the majority of the move is what's critical. Now, are you leaving a significant portion of your moves behind? If so, then your trading plan and execution skills need tweaking and improvement. I'd say that if you're capturing the lion's share of each move, you're doing GREAT, now maybe some other techniques in your execution (pyramiding for example) can help maximize your gains and help you to stop dwelling on the portion of the move you left behind. Very seldom is a perfect game pitched. They are possible and worth striving towards, but not worth beating yourself up over if you are an overall winner.
I almost never beat myself up about leaving money on the table. i know it will happen. I also reinforce the profit from the trade that I took off the table. Thats the main thing, taking money from the trade. The occasional times where I may get slightly upset is when the price does something I did not expect, stops me out, then runs huge in my original direction. Thats about the only time I really think about it, I try to see if there was some other way I could have played the trade. Theres probably not much I could have done because to salvage one of the few that act unexpectedly I would probably end up gaining less on the majority of other trades. The way i look at it, if you are not constantly looking for ways to improve, then you are standing still.