Hi all, I'm seeking some advice/opinions on how to best change my mindset into letting my profits run and limiting my losses? I've been OK at eeking out small profits in this volatile market but have been consistently leaving much larger profits on the table. Any thoughts and suggestions are appreciated! Eazy
If you have a profitable system that lets profits run, follow your system. If you don't have such a system, develop one.
Scale out and move the stop to break even a worst. By ringing the register you get satisfy the internal battle inside of you between taking the profit and letting it run while at least leaving open the chance for the trade to turn into a bigger winner with the worst case being you get stopped out at break even.
My biggest problem is when size is in play. I generally let 1 car go for 10 points or more without a problem. However, on those rare days when I get 16 cars in play, the second I am up two points, I get "happy" and follow the no trader ever have gone broke mantra and take my profits. Sometimes, I leave 1 car to continue but that is very rare. Maybe because I generally do not trade after booking 16 cars for 2 points and a tick, I am eager to sweep it in and call it a day?
If your target is only two points and you follow the plan then there really is not a problem. But if your target 1 is 2 points and target 2 is higher but you still go flat at 2 points then you are hurting yourself by not staying disciplined. Try turning off the pnl on your dom because it seems your are focusing on the money and not the trade.
I think, it is because 16 cars is way too many cars to be trading in my case. I get scared and book profits early. It happened twice yestarday and in retrospect, I lost some major $$$. On a + side, most of the time I am in with 1, or 2 contracts at a time, and 16 is a very rare thesedays. Also, those pesky swings do not help my fear. I was actually thinking of increasing my account to get rid of that fear factor, but I have decided that slower is sometimes better.
Try to Think Ahead. At the moment you usually decide to exit, ask yourself what will happen in the future, says in few minutes, hours or days. Of course, nobody can predict the outcome accurately but just to train our mind for being able to catch bit of sight.
Well, I am thinking what is going to happen if this thing is going to hit my circut breaker and I am going to be - 16 cars. paranoid, you betcha. Also, when I mutliply 16 cars times 2 points I get happy, very happy and tell myself: shit you used to slave yourself to a boss whose IQ was lower than you seamen for a fraction of that. What are you waiting for, do not be greedy, take it off the table and let's go home. And I do.
So to get to 16 cars, are you scaling in (or to put it less benignly, adding on to trades that go against you)? When you have that much more on the line with 16 vs. 1 or 2, I don't know how you get around the increased fear factor (without having a computer trade for you, and setting it up such that you can't overule it's decisions). Fear overwhelms greed every time (aversion to pain is a stronger motivating factor than pleasure - we're genetically programmed that way for long term survival).
Well I do have an exit target/strategy but now that I think about it, it's only on the upside, not the downside; having one for the downside would probably help address my problem about limiting my losses.