I have been trading for a while and the net is loss so far. I modified my technical charting system recently and this system although not a perfect one, generally produces a decent profit at any paper trading session. In a real trade session today, I hesitated to pull the trigger after all the signals were favoring. After that, it's just a one way traffic and I missed a great opportunity. Can you guys help me how I can bring in this discipline in myself? Thank you guys for your help Sukhen
Does your charting method produces certain treshhold levels where you can take action? If yes, it can help to monitor these levels in advance & then train yourself to act on a certain level. Do you use multiple time frames? It can help big from a psycho-point of view to act on shortterm signals that fall in line with the next longer term structure. The question for all of us is (if this kind of behaviour happens): Why do I don't thrust myself & my method, if papertrading works so well? This confidence can also be increased by taking the method to different markets & timeframes & therefore seeing & training different patterns...the last recommendation would be a simulator with playback features. Hope this helps.... cosmic
I've always had a problem pulling the trigger (constantly waiting for a better price and end up missing the trade completely). So now I only trade with stop and limit orders. If I see a signal coming up I put a stop/limit in and just leave it. And the same for getting out. Maybe you're trading too big. Reduce your size to the point where you don't care if you lose and see if you can pull the trigger easier. Cheers
Also dont think of the potential profit or loss, just whether your criteria is met then pull the trigger. If after your exit the trade is not profitable, pat yourself on the back for successfully following your system. Believe me the more you do this, the more your account will grow before your very eyes. (That is if your system is a good one )
Sukhen: Think of it like this: Who are you most apt to slug when the guy is standing there dissing you or your girlfriend, a guy you KNOW you can kick his *** easily, or a guy who is bigger than you and more muscular? What are you basing your "pulling the trigger" decision on is this case? What the guy could be capable of doing to you in counter punching you. Size matters. Sounds like you are beginning to switch from a demo to a live acct(?). Your system will always do better by making it better in experiment trades. I never "put on a trade." I always do trade experiments. I am not a trader, I am a student of the markets practising the profession of trading. Pretend you have a $5,000,000,000 trading acct. Would (trading the same size trades) losing the amount (that prevents you from pulling the trigger) be any big deal? No! So... you can safely conclude that if you reduced your trade size in true and equal perspective to your acct size your trigger anxiety may also dissipate. Trading may never be easy because of the risk of the unknown. That may be why so many people do not try it for a living - and also why so many may lose at it. Example: At OANDA you can trade currencies - no RT charge - but the thing is, you can trade under the wire, meaning you can trade as little as one unit (.05 cents exposed to margin) yet stilll trade live thus not even registering losses or gains even on a hundred point move (1 cent). If (when) your system produces enough winning trades you will naturally be able to increase your size, as you may build/improve your own trading muscle and capabilities to be able to better meet the big guy's taunts whereas before you (smartly) hesitated. When I hear about guys' fear of pulling the trigger I always think it is because they are overtrading - trading too big for one trade. They obviously have a lot to lose compared to their acct size. Jamus has a good point. Good post! ol
What exactly are you trading (Stocks/Options/Futures)? And what's the regular size you put on each trade? -Fast
As the others said it is because you are trading too much size that the fear comes in. I was trading 3 contracts on futures and had this problem. At the moment I strictly trade only 1 and have sworn to do so until my system gives me enough (real) confidence to add more.
I was trading NIFTY index futures of India. Stocks appear to be extremely volatile here (got burnt many times during scalping and now I feel stocks are just too difficult for me), rather the pattern of NIFTY is more or less uniformly directional but the size is big for me (I think I can't try fractional lots). I am using MetaStock Pro for Nifty, I use Equis - MACD and wait for DMS confirmation and ADX outage/SAR whichever first to exit with trailing stops on a 5 min chart. I faced typically some of the scenarios that probably hold me back. These are the things that happened in forex, stocks and index, I tried. 1. While every indicator is supportive, I enter the market and the direction changes and I incur a loss. 2. After joining the market, may be I see a small profit (refuse to take it) and wait a little while (for a bigger profit as the indicators did not direct otherwise) just to see the market has turned around. 3. I take a small profit to see the market moves in a big way in my direction while I have got just a pie. In such cases, if I 'have joined the trend' again, I saw market reversed. I lost a good amount of money already and I feel kinda shaky sometimes but I don't really wanna drop out. Kindly tell me how I can face these situations. Thank you guys for your help. Sukhen
Sukhen: I may not have as much time or be advanced in trading as you ... I can still see overall objectively. Most (loser) traders may underestimate the power of detriment a loss has upon them. Think of it as dating a girl. So you date this really hot girl for 6 months and are in bliss... then she drops you cold. You think you can go out and just start dating another really hot chick? Not necessarily but you don't want to "drop out" either. So... just start again... small (ugly chick who really needs a date) then build your confidence... nothing wrong with trading small and boring - it is only to *heal* from the devistating wounds of incurring losses that happen to everybody. (on demo accts) I've liquidated (caught margin calls) more times than I care to mention - so, loss simply is not something we as traders can calculate OUT of a trading plan/structure... it is mainly in how we deal with it (them) that matters both before and after. There's nary a heavyweight champion boxer who has not been knocked out in his life. Consider the legend of Jesse Livermore. There's a saying, "My winning trades are all in front of me." Since each trade is different we must make sure we take measures to NOT carry a loser over onto the next trade. When you win - leave (for awhile) - when you lose - definitely leave for awhile. Get out, take a walk - take a break - put things into perspective. Realize the profession you choose to do is the hardest one on earth with the greatest payoffs. The richest man on the planet is a trader (Warren Buffett) - this is what many people don't realize. He trades in stocks and currencies just like others. Bill Gates is technically richer than Buffett but it is just because he has all those employees making him rich - Buffett just trades. If you have the desire to trade, continue - but, as a wounded soldier cut back on your battling ground some. Nothing wrong with retreating - it is a good and sound strategy - that, if not heeded, can lead to financial ruin. Buddy of mine, who I BEGGED to reduce his position size lately just before he got his clock cleaned for $38,000 ($28K credit - $10K borrowed) by taking a long EUR/USD position before it tanked a few hundred points (last week). Remember, NOT taking a position is TAKING a position. Trading LESS size-wise can be a smart trading tactic of offense when a trade calls for it - and trading while "shaky" definately calls for it. Don't think I never traded live - I traded the NASDAQ .coms in '99 for months before I blew my acct up. Why? By trading 90% port clips at a time. 300 trades to double my port - 4 to vaporize it. ol