Ok ladies and gents, first Happy New Year 2008. The very best to you and all yours. My stats: Started Dec 07 with a new account Initial Equity: 50K Ended Dec 07 with ~30K profit My Problem: I am afraid to replicate my strat. because I'm afraid of making so much money. I could call it sabotage of success. It comes easy for me. I've made quite a bit of money in the market, without over leveraging myself. BUT, I ALWAYS give it back. WHY? On days where i don't make money, I get angry. On days where I make less money, I get angry. I then start pushing myself to overtrade. Increase market exposure, risk, etc. and BAM... $$ gone. Then I sit and fester and motivate myself again. and then AGAIN produce these dramatic results. Again, in a non or over leveraged manner. I don't want to repeat and rinse again in 2008. How can I tell/teach myself that its ok to make money. Love and Cheers.
You say you made 60% in December, but you "Always give it all back"? Your post makes no sense, hence the LOL. If you are fearful in your trading, the best fix is to size down on your positions to the point where you are not feeling fear, then take it from there. Once you are comfortable, and feel you can replicate your strategy, begin to size back up. Probably also a good idea to move some of your gains out of your trading account, in case your December success was indeed a fluke. This will also help to increase your comfort level. Trading is ALWAYS accompanied by some degree of fear, even after years in the saddle. If you are new to the game, you'll just need to get used to it, and learn what level of fear is a danger zone, and what is just the background of normal trading. Good luck.
To clarify: "You say you made 60% in December, but you "Always give it all back"? Your post makes no sense, hence the LOL. " ie, I don't give it back the same month. but the gains do disappear. it seems, either my post is being ignored because nobody else has this problem. or my problem is soo prevalent, that nobody declare it. we just want to pretend we're rich and showing SAC how its done. {atleast on paper trades and sim accts} i await more answers.
I don't know how long you've been trading - but if it's easy then it's probably more luck than anything else. Whatever it is, perhaps subconsciously you know that it has been too easy and your fear is justified. It's easy to make money in the market and even easier to lose it. All traders make and lose money in the market. A good trader knows how to hang on to gains and cut losses - money management - it isn't easy. I've been there - making fantastic returns - only to give it back. Months of work down the drain. It took me years to figure out how to get ahead and there's still plenty of room for improvement. And there's no guarantee that I've really got it right.
Your problem is not here: I'm afraid of making so much money. Your problem is here: On days where I make less money, I get angry. I then start pushing myself to overtrade. Increase market exposure, risk, etc. and BAM... $$ gone. The resolution to your problem lies in instituting rituals into your trading. A ritual is simply a mental process which you construct yourself, which you substitute into the place of your normal responses. Rituals will not work unless you first recognize the points at which your problems begin. It is at these points that you must immediately insert your rituals into your thinking. For example, if you recognize yourself getting angry (and remember, the rituals will not work unless you first recognize these points), you then substitute a ritual such as ("when I recognize myself getting angry, I will think about how many shares of this stock I want to buy, and I will reduce that amount by at least 50% before entering"). Your normal response to getting angry would be ousted at that point, and your rituals would take over. +-*/ Math_Wiz
Sounds like a discipline problem to me, at least that's what it was when I had a similar problem. It took a while of saying 'how dumb are you' after blatantly breaking my own trading rules and taking a hit but eventually I got the message! I'm guessing you have a proven strategy which makes money when you stick to it's rules and loses money when you don't, you've proved that to yourself already going by what you posted. The answer seems a little too obvious, develop the discipline to simply stick to the rules of your strategy. This is an article I saved from Innerworth, it may help (sorry it's not formatted). The sentence which stood out for me was "If I keep abandoning my plan, I'll regret it later. I can stick with this plan if I try hard enough. Right now, my only goal is going to be sticking to my plan. That's it." Copyright © 2000-2006 Innerworth.com. All rights reserved. Discipline Takes Practice Trading is a profession where you must make a plan and stick with it, but even seasoned professionals find it difficult to maintain discipline. They sell earlier than they had planned, ignore stop-loss points, or abandon risk limits. As much as many traders try, they have difficulty maintaining discipline, and they pay the price in the long run. Some people are highly disciplined and very self-controlled. They scrupulously follow rules and are careful to control their impulses, even if it means they are a little rigid at times. Other traders take a more carefree approach to trading. They are usually very creative and profitable, but may have trouble with discipline at critical moments of trading. Every trader has an issue with discipline to some extent, whether it is a lack of discipline or too much of it. The markets are chaotic and unpredictable, and thus, it is understandable to feel unsure and unsettled at times. After a trade is executed, what happens next is anyone's guess, and this state of uncertainty can cause uneasiness, which may in turn, lead to impulsive decisions. How can you increase your ability to maintain discipline? First, it's important to view your ability to maintain discipline as similar to a muscle. Like an actual muscle, it's necessary to build up stamina. Maintaining control takes psychological energy, and humans have a limited amount of psychological energy. When the limits are reached, maintaining discipline is a challenge. The best solution is to build up as much psychological energy as possible, which will allow you to maintain discipline. Second, it is vital to get plenty of rest and relaxation. When you're tired, the available psychological energy that you can devote to trading is restricted. You will have great difficulty controlling impulses to stray from trading plan. By getting the proper amount of rest, though, you'll have enough energy stored up to stay focused and maintain discipline. Don't underestimate the stamina you need to maintain discipline. If you have over-taxed your ability to maintain discipline, or if you are too tired, you will act impulsively. Third, control your emotions. When you are feeling stressed out or upset, you will be unable to maintain discipline. Fourth, it's vital to have a clearly defined trading plan. Not only should you map it out, but you should also write it down and put it up next to your screen. If it is clearly outlined, it will be easier to follow, and if it is right in front of you as you trade, you will be able to remind yourself to follow it. Fifth, outline the reasons you want to stick with your plan, and write these reasons down. By writing them down, you can read them over when you are tempted to abandon your plan. You might write down, "If I keep abandoning my plan, I'll regret it later. I can stick with this plan if I try hard enough. Right now, my only goal is going to be sticking to my plan. That's it." When you feel like abandoning your plan, you may want to read these statements over and over again. Don't think about the consequences of losing or closing out the trade. Focus on the present. Concentrate on completing the next steps, not on the future. If you concentrate hard enough, you will be able to stick with your plan. Many traders have difficulty trading with discipline. It's tempting to trade by the seat of your pants and just live with the consequences, no matter what they are. But the winning trader is the disciplined trader, and if you can maintain discipline, you will profit handsomely. Copyright © 2000-2006 Innerworth.com. All rights reserved.
If you are making a lot of money but also losing a lot of money, then you are not making a lot of money. ...which means you don't have an edge. you are just getting lucky. Luck can only carry you so far before you hit a losing streak and wipe you out.
Pull out excess profit end of month. This way you are starting from scratch. Thats the easy answer..the hard one address discipline.