My emotions are killing me! they make sell my winning trades and keep my losing ones,,, I hope a pro here can give me a few pointers.... Ed
Trade with a system and a partner. After you set up a trade give it to your partner to manage and exit at predetermined levels. It's much easier managing a trade someone else set up than the one your own ego did.
Some automation may work. For example, ninja trader allows you to set stops and targets so that you don't have to watch the trade. For example, wait till you see a trade, then let ninja take over. Next, do something else for the normal amount of time it usually takes to complete a trade. Also, you may want to set either a daily stop $ limit or number of trade limit.
Hide your Profit/Loss dont trade of how much you make / lose. Set a daily stop max loss for yourself. Have a reason for your entry/exit , confirmed by a pattern/tech breakout/volume , dont just exit coz your green...is the stock in bullish trend? above 20day ema ? increasing buying volume ? at major resistance/support? news driven?
First ... welcome to trading and wagging the Dog. Second ... there is hope for you since you asked for help before total destruction. Third ... you must learn what type of trader you are and what is comfortable for you. Meaning ... If you are losing real money your practice sessions with fake money were not done right. Practice with the exact same cash as a real account would hold. Practice the same way or more intensely as the real game. Ponder and get upset and mull over just like it is real money. Acting is cheaper than the real money. If you cannot discipline with fake money ... then you cannot discipline with the real unless it hurts. If it hurts then decide to grab ahold of the problem and discipline your self with sets of rules that are proven. Practice them, then follow the rules that are proven. If they fail ... step away and re-evaluate ... making sure you have a ratcheting progress forward. Objective investing is the goal. Even if your indicators require subjective analysis ... make objective rule sets to evaluate them. I have 10 rules to follow for perfect trading on my system ... making my subjective analysis have objective parameters. I can trade a 9 rated or a 10 rated trade ... but not an 8 rated trade ... even though over 1/2 of the 7 and 8 rated trades are winners. This controls "My Behavior" and then I can use money management to make multiples of my bets in the market ... steadying my emotions and zeal for speedier increase by using multipliers of steady rules in money management. In real world trading there are many highs and lows to "capture;" often the ones most effectual are our personal character attributes that need trimming. Successful traders trim many a wick just to sit at their screen and must do so to have longevity to remain there. If not ... they provide loose money and liquidity in the marketplace for those who will gather up their foolhardiness by taking profits.
Only trade with money you can afford to lose. Your trading account should not create consequences in your budget. Research your trading style tell you are sure it will work. Study the psychology of trading. Spend your effort on learning the inner workings between your ears. Use non trading events for conditioning. For example train for and run a marathon. Fast. If you are too heavy lose weight. If you are too thin work out and build muscle. It is not tell you are capable of direction within yourself will you get the mental edge it takes. I suspect you will discover the traders that win are the people with their head screwed on the best. It is all related.
Personally, I've always liked emotions, and I'm not sure why everyone is always trying to get rid of them. I think it's a deeper problem in our society. That's why we spend so much time as hospitals and popping pills all the time. Seems like 1 out of every 3 kids today is on some kind of emotion controlling medicine. Instead of trying to keep emotions out, I recommend exploring your emotions, and bringing them out. If you feel alot of anxiety, that's probably telling you that you're gambling. If you feel defeated and depressed, it's probably because you're going counter trend. If you feel very happy, that probably means you're making money. If you feel bored, then you're probably trading the way you're supposed to. So here's how I would sum it up: 1. If you're freaking out, full of anxiety etc.., = use smaller size of an un leveraged instrument. Risk no more than 10 dollars per trade, and trade only once a day. Then figure out how to make a succesful trading plan. 2. If you're depressed and feel defeated, ask yourself if you've been trading one direction, while the market has been moving steadily an opposite direction. If so, go the other way with a smaller position, and use a really big stop. Wait until you feel happy again. 3. If you feel happy, have fun, because it won't last forever. 4. If you're bored, welcome to work. Try to have as much fun as you, control your stress because it's not worth the damage to your heart, try to laugh, hey, it's work not an amusement park. You're probably doing pretty well, and doing what you should be doing. Don't fight the boredom. We're not trading to go thrill seeking, the boredom is right where you want to be. Super tip: Do not go to a trading psychologist. Failed traders are now becoming trading psychologist and charging a few hundred dollars an hour. It pays better than being a guru these days. It's bullshit.
I have sets of rules. Entry rules, stagnation rules, loss rules and money management rules for profitable trade. And because of these rules I have made, trading is no longer based on emotion but on my checklist based on what the market is saying. Most of my profitable trades are almost instantaneously profitable from entry, based on this information, if price hangs around entry too long, I get out with minimal profit to cover commissions. My losing trades take care of themselves on set exits, same with targets on profitable trades. These same set of rules cover either trades based on weekly data or five minute bar charts. By using a checklist, that is all I have to follow. I have taken the "me" out of trading and the checklist either makes money or losses it.
Very nicely said. I make every effort to do the same and have pretty good success at it. In much faster systems I sometimes let excitement fudge my parameters and hence my trades and with my current system which is purely a progression play on tough rules ... well ... boredom is the same enemy as excitement ... I sometimes fudge my parameters and hence my trades.