I just can't seem to get it right. I have had a trading case of "I got it, I lost it" for the last 20 years. I have never been consistent, and yet I yearn to be able to trade in a manner that promotes good trading. I have followed Spydertrader since he started his stock journal, spent many hours listening to FuturesTrader71, and many months in a chat room with Anekdoten. Yet I still can't manage to make a buck! My psyche is too stuffed up, and it always gets in the way. Whenever I enter a trade, my thoughts are consumed by "where can I get out?" This is characterised by lots of losing days, with some small winning days. A typical response for me is to cease trading if the first trade is a winner. That response comes from fear - fear of being wrong. I know it, I have read all the psych trading books - Kiev, Steenbarger, Magee, Douglas - and yet changing behaviour is far more difficult than just being aware of the problem. I am your typical trader that thinks about not losing, rather than winning. Here is a chart of my trades yesterday... This morning was my worst case of discipline yet. Unstructured trades based on trying to earn back yesterdays losses. I came up with a hair brained scheme based on my perception of my faults: If I am always wanting to get out of a trade, and always trying to be right, then perhaps if I max out my winners by forcing myself to set a profit target of 10 points, and force myself to exit at 2 points, to cut my losses, then that will help me deal with exiting too quickly. Nice theory, but let me loose in an undisciplined way, and it all goes awry. It only took a couple of losers today to make me start chasing, since this method also gave me the flexibility to enter wherever I 'thought' price was going to go. My previous strategy was very strict and mechanical, so it went some way to protect me from myself, or at least my account. So todays chart represents the totality of everything I know is wrong, yet I still did it: When I look at this chart, I cannot believe I can make such ridiculous mistakes such as trading without a plan after 20 years of searching for something that works for me. There are so many areas to have made some winning trades. Even those that I entered, but did not hold. Once again I am searching for what works, even though I know that its me that needs to change, and not the chart. I think my primary problem can be stated: I do not feel I have any edge in the market. If I knew I had an edge, and by 'knowing' one is confident, then I would avoid trading hunches, and just trade my edge. No edge = no confidence, no discipline, and no profits. I am considering throwing the towel in, but I promised myself that I would devote this year to trading. If I can't make it this year, then I will call myself another ember in the trading pyre and go out and get a real job. This journal is to help me implement some discipline in my trading, as well as a call for help from anyone that can shed some advice on my poor choices. I am mostly a trader of price, having had no success in indicators, and the simplicity of methods such as Anekdoten's AHG method and DBPhoenix' SLA seem more robust than indicators. I am not quite sure where to go from here, since I have many times done 'backtesting', both automated and manual, to try and find an 'edge'. I think to myself, 'haven't I done enough testing already?' The weekends sacrificed to looking in the wrong places has all but driven me crazy. Do I really need to go back there? Perhaps I do.... Pivots, S/R, Double Bottoms, Double Tops, Trend Lines, Trading the trend, Reversals, ACD method, Level 2 DOM, Volume Profile, stocks, futures, Pair trading stocks, automated, mechanical, manual, gut feel, options, strangles, straddles, calendars (ouch), Iron Condors (Nearly double ouch!). The list goes on. I think the problem is not what I see, but the way in which I am looking. Up until yesterday I felt I was making progress - moving to live trading a fortnight ago, making some money last week (well just above BE). It doesn't matter how slow you go, as long as you are heading in the right direction right? So the idea of throwing this 'method' away, and starting again from scratch is pretty difficult to swallow. Just what is it I am not seeing when I look for an edge? The 'method' that I presently have is simply trading the ABC's, or 123's as I see them. Giving myself about a 1.5R on the first scale, and then leaving the last position as a runner until it gets to around 3R. I know exiting based on profit targets is a poor choice, but it has kept my brain tethered and helped me to extend my winners. My best trades have always been at that point where I have had so many losers, and lost so much self control that I really don't care anymore. Both in sim and live. I have given up trying and just see price without wanting to be right anymore. Not caring also helps me to hold the trade on longer, so I sometimes recoup much of what I lose. Yesterday was a good example. I know there is something in that, but getting that mindset to just zone into price without caring has not been possible without the prior losses and agony. I think that is probably enough background, and I expect most of you have given up already, but if you haven't, thanks for taking the time to look.
It sounds like this paragraph sums up your situation. I'm just regurgitating what DBP has said 1000 times (several of them to me) - you don't have a method. You are fearful when trading because you don't have any concrete rules and therefore nothing to depend on. Discretionary trading does not equal trading on instinct. My advice is to get off of autopilot and try to return to the beginner's mind you had 20 years ago. Meditation is the best way I know to get there that I know of. If you are going to stick with your current method then you need to systematically test it until you have definitive rules for entry, trade management and exit. DBP has written a long on this subject. Many lean - few lift.
Changing behaviour requires awareness of what triggers the negative behavior as well as a plan of action to redirect these negative processes. The Power of Habit is a fascinating book with a simple redirect process at the end. Clearly, you need a plan. You've suffered much psychological damage and I recommend that you choose a single setup (price environment + price action pattern) that you've tested for positive expectancy. Be sure you have clear definitions for the price environment (the context) and the price action itself (the pattern or behavior) that will signal/trigger your trade entry. Because of the extent of your damage, even a small amount of flexibility with regard to trade management is likely to be enough to send you back into the cycle of failure, so I recommend using a fixed profit target. Let your statistical analysis of MAE/MFE determine an ideal profit target and use it on every trade. In the meantime, instead of trading when you really, really feel strongly about where price is going to go, simply log the entry on paper and track the result. DO NOT put on these trades. Your best thinking got you where you are now and what you really, really believe is going to happen is about as useful as a roulette gambler really, really believing that black is "due" because the last 10 spins were red. It's the few times these hunches worked out in your favor that have you addicted to random rewards. Without a tested plan, you're gambling. The other part of the equation as you log these "I can't hardly stop myself from putting on this trade" trades is to also log the trades where you know you have a proper setup but you don't trust it and it feels so wrong and uncomfortable. At the end of each day, compare the two logs.
Thank you Green, I used to meditate regularly, but I admit it has taken a back seat lately. I agree its very helpful for maintaining the right perspective and being able to listen to yourself more clearly. Your other point speaks to backtesting, and I agree its something I need to go back to and definitively define my edge. I appreciate your comments. Best of luck with your own journey.
You put it better than anyone else. Listen to you. (At least you can spell "loose"; that's quite an achievement these days )
Wow, that is quite a post. I sincerely appreciate your comments. I have been reading your posts on this forum and I really value your input. I will investigate the book The Power of Habit. Thank you for the tip. I'll also be taking your other advice - I am going to cease trading (like that is in any question!), and analyse what I have currently and see if it has an edge. Perhaps it does, but only under a particular context, as you point out. For me though, these things are harder to do than they look. I don't think I have ever been able to look at a price pattern and been able to definitively see an edge. My belief is they are very hard to find. Also the patterns that I do see are relatively subjective which I am keen to avoid - as you advise. I agree with you that I have become addicted to random rewards, and that I need a strict plan that defines a particular pattern, at least to start with, to get me out of the failure mode. I'll also start annotating my thoughts during the trading day. Great advice. I'll update the journal with how that journey proceeds. Thank you again for taking the time to respond to my situation.
Good point Db, Its just a jumble of thoughts that don't really make alot of sense until I write it down, which I am sure is part of the reasoning why you promote journaling as a method to successful trading.
i me my ego is in the way,you tried all that shit for 20 yrs , looked everywhere but the one most important spot,yet refuse to let go of the me, put the me in the garage during trading hours, better yet a one way train ticket to siberia forgive my tresspasses ,forgive everone elses trespasses,lose the back pack,lose the last 20, 10, 5, 1 years, lose yesterday, lose the last trade and trade the market ,its the only thing on the screen,anything else is just a load on your back in an uphill journey
Oh my God ammo, if there were just an easy way to dispense with 'me'. I don't take prescription drugs, but if there was an 'ego-free' tab, I'd be at the counter with my money. If I can quantify my edge, as ND suggests, then I really think losers will not bother me so much. So it's back to study.