TraderNik gave some very good advice; keeping a trading log has been invaluable to me. Also, your reference to "I've seen this before" trades struck a chord with me. I used to make the same impulsive mistakes. The problem with these trades is quite often one of context. For example: the last time I saw X, Y happened. Well, maybe the short term trend was up when you last saw X. If the current short term trend is now down can you realy expect a repeat of Y? You asked about 5min cahrts too, which also had me thinking about context. I trade 1 and 4 hour charts, but I begin every day looking at weekly and daily charts, working my way down. Even if you're a scalper using 5min charts you should be aware of trends prevailing on the 1h and 30min charts. This will help put your 5min chart in the proper context. I hope this helped, good luck.
Hello I assume you want the unvarnished truth.. First, if the purpose of trading is to make money, and you are losing money, I would rate your performance as failing (F). Second, time frame is not your problem. It is the lack of a tradeable edge that causes you to lose money. If you were to learn to research and find a trading method that you could execute with discipline, you would have an edge. That is your first priority. Third, I suggest you do not trade until you find a method that works, and that you can execute with discipline. If you cannot come up with a system on your own, you could try some of the publicly available systems published here at ET. Examples include 1. Spydertrader's journal (Hershey system) 2. Nopmplease journal (Emini Divergence System) 3. John Carter's YM system (Google for "Trade the Markets") I cannot help you with discipline directly. You have to make the decision to embrace discipline in your work, or if you cannot, you may want to try another profession. I wish you well. Steve
OK. My opinion only. What Steve46 says is correct in the good old dbphoenix/mark douglas style. You do have to define exactly what you will and won't do and then build the discipline to do it. You might want to consider the attached thoughts derived from Mark Douglas's work especially the bit about specializing (borrowed from another trader's post). Then you get the issue of why you fail to stick with your successful specialization. Somehow you have to find this discipline that Steve correctly suggests you need. If the direct approach doesn't work, if you seem to have hooks that pull you into "bad" behaviors, then perhaps you need more help to overcome bad habits. You might want to look at my post http://www.elitetrader.com/vb/showthread.php?s=&postid=1120690#post1120690 and other suggestions in that thread. If you have a good strategy, have a plan, and have tried to build discipline but fail then you could do far worse than seek assistance from a traders coach like Dayne. <img src="http://www.elitetrader.com/vb/attachment.php?s=&postid=1120955">
Steve, I appreciate your straight forwardness. I believe my method is pretty sound and I think its my inability to adhere to it that is my problem. I currently trade a discretionary accumulation/distribution model which incorporates momentum. Pretty simple stuff really, but I wonder if making my method more mechanical (eliminating much of 2nd guessing) would help?
i have some simple suggestions if u have prob with overtradin' and lettin' your trades run: u can place a time lmt that works as a barrier for closin' your pos and stay away from your pc for almost the whole day. i myself had some problems in the past cuz i left 2-5% on the table on many trades just cuz i thought takin' 1-2% profits is ok, and of course it is but not so much when u know the odds of further 1-3% moves are in your favor; now am doin' this: on naz stocks if they are trendin' i place 2o'clock time lmt to close me pos and on nyse 'till 3o'clock or session end, dependin' on behavior. or if u wish u can just open your pos, place a stop and go away from your pc for hours, then come back and see what happened...this 'strategy' has also works very well for me in the past...it has helped me avoid bein' trigger happy. of course u'll have to monitor your pos at the beginnin' to see when is goin' enough in your favor and how likely it is that u gonna make much more if u let it run for the whole session...but trust me this way u'll be able to bank huge profits on your good trades and once u see the results u'll drop that "i close now that am ahead" deadly attitude.
There are some decent books on the topics of the Psychological, Discipline, Emotional aspects of trading. These books are constantly being mentioned and recommended here at EliteTrader.com by all types of traders. Simply, purchase them or try to get them from your local library if possible. Your question about the 5min chart is odd. Choice of chart interval, choice of initial stop, trailing stop, profit target, contingency plan has absolutely nothing to do with this. Why? You haven't disclosed the details of your trade methodology beyond mentioning its title nor have you disclosed in detail your computer monitor setup, home or work trading environment et cetera. Thus, to pick out a chart interval without providing those other critical details about your trading day is just odd. Read this other message post at the below link...it will help in that it will either improve your performance or someone will be able to better identify your trading problems and possibly the cause of such. http://www.elitetrader.com/vb/showthread.php?s=&threadid=72152&perpage=1&pagenumber=22 Simply, its very easy for us to sit down and write I will not take these types of trades that are outside the guidelines of my trading plan and I will take these types of trade that meet the guidelines of my trading plan. My point is that some traders do not have the ability to be their own coach sort'uv speak even if they know what the problem is. Therefore, these types of traders need in person peer pressure (group or one trader) to encourage, enforce the type of trading performance they seek. Find some traders in your local area and ET Hook Up thread is a good place to start... http://www.elitetrader.com/vb/forumdisplay.php?s=&forumid=28 Mark
to the Original Poster: You MUST look at your losses in the proper light. it is not "money well spent" it is money poorly traded. that's it and that's all. whatever approach you are taking to the market isn't working. you have to change the approach at a fundamental level. most people who try changing approaches only do it at a superficial level, i.e. (trying to succeed with MAs and then moving over to trying to succeed with Keltner channel, or CCI or <insert indicator of the month here>) some others try futures after stocks or stocks after futures or options after blah blah blah...another fruitless endevour. That approach to 'fixing' the problem or gaining useful experience doesn't work. It only gives you experience in looking at indicators, not trading the market. start by looking with a critical mind at price (and/or volume). watch how bars form, watch for when volume and price dry up, watch for when they expand. notice characteristics of the above. Deal with what's happening NOW, not with what could or should be happening. as an excercise, plot gann swings on your charts and see how every up swing is followed by a down swing (i'm not suggesting USING gann swings in your trading...they form after the fact...BUT i am suggesting that there is a rational behavior to the market.) if there is a rational behavior to the market, then a rational and simple approach will succeed yes? so, i have given you some suggestions, take em or leave em. one last thing, emotional control becomes less and less of an issue as you gain competency with regard to your ability to first READ the market and then to ACT on it. (in between the reading and the acting is a decision making process...) you can't read a novel before you sound out individual words....so start with just a 2 bar comparison. Compare 2 bars at a time.
thankyou for the help everyone. I'm going to take some time and go through all thats been given. Much appreciated.