EE, thanks for you comments and advice. I definitely need to focus more on the process and not on the results, and learn how to deal with the "fearful voice"
RN, welcome back and thanks for posting, your advice and encouragement. I think you've helped me answer your own question above. This is what I'm going to do next - write down answers to the following questions, analyze them and keep practicing... How would PO the perfect trader think, and act ? How is PO the trader thinking, and acting now ? What is keeping PO from acting like that perfect trader ?
How would PO the perfect trader think, and act ? Focus on the process, not of the results. Perfect traders Make money from the market (but then so can blind monkeys) Have losing trades, but remain emotionally unaffected by them Have learned to take all set ups, (never know which will work, and which will fail) Have learned to cut losers â immediately once the setup has failed â then never look back Have learned to move on to the next trade Have learned to stay in profitable trades, till their target is reached Have learned the importance of sitting on their hands â while either in, or out of a position Have learned one tradeâs outcome means squat with respect to the next tradeâs outcome Have learned to remain in a trade, even though price is coming back to their entry â because setup is still valid Have learned to trust their eyes, and their self to take the appropriate action(s) â without second guessing or hesitation Have learned to ignore their PnL, and trade price Have learned they are human, and susceptible to the same human frailties as everyone else Have learned to be their staunchest supporter, their harshest critic, and their most objective observer Have learned they are far from perfect â and thatâs okay
How is PO the trader thinking, and acting now ? Afraid to lose Put too much into one tradeâs outcome Close trades before my target is reached Trade my PnL instead of price Have difficulties of sitting on my hands Does revenge trading
I've read Ray Dalio principles over the weekend. http://www.bwater.com/Uploads/FileManager/Principles/Bridgewater-Associates-Ray-Dalio-Principles.pdf Here is a short summary: Reality + Dreams + Determination = A Successful Life So what is success? I believe that it is nothing more than getting what you want, and you must decide what that is for you. It doesn't matter whether it is being a master of the universe, a couch potato, or anything else. What is essential is that you are clear about what you want and that you figure out how to get it. Another principle to keep in mind is that people need meaningful work and meaningful relationships in order to be happy. I have observed this to be true for virtually everyone. The work doesnât necessarily have to be a job, it can be any kind of long-term involvement that leads to personal improvement. To be happy we have to keep evolving. So, the bottom line is: You need to truthfully understand your reality, decide for yourself what you want and then go after it in the best way for you. Pain + Reflection = Progress It is a fundamental law of nature that to evolve one has to push oneâs limits, which is painful, in order to gain strengthâwhether itâs in the form of lifting weights, facing problems head-on, or in any other way. Do not feel bad about your mistakes or those of others. Love them and learn from them! Remember that 1) they are to be expected, 2) theyâre the first and most essential part of the learning process, and 3) feeling bad about them will prevent you from getting better.
Today was another one of those completely messed up days for me. It didn't help that I've lost money yesterday. It all starts from one losing trade in the morning, then follows by a few impulsive revenge trades. And then it all spirals out of control. I can see it clearly now, but not when I'm in the middle of it. When I'm trading I think that the next trade will be good and will bring me out of the hole my PnL is in. I'm afraid to miss the next move that will bring me to break even, and start throwing darts anywhere hoping one will stick. As a result I take too many trades and get stopped out. Today I took 24 trades, about 18 of them got stopped out for -2 points. It looks insane, I know. I need to change that. I will take day off tomorrow to reset my mind and think what I need to do to fix that.
P&L -24.5 points before everybody will be very concerned, I'd like to clarify that I'm still trading in the Simulator.
P&L 5.6 points It was an OK day, made a few mistakes and was a bit nervous. The main difference between my losing days and my winning days is my first couple of trades. If my first trades are winning or b/e, I'm trading more rational. It's when my first few trades are losing then I'm losing it. I need to focus on my first few trades and make sure that I take only my set ups, and if I'm stopped out at a loss, I need to monitor my behavior for signs of emotional trouble.
Do yourself a favor â Embrace the journey. Accept the fact that it may not be a man-made road that goes straight and smooth. Expect the ride to be a bumpy one and keep yourself upbeat even if the situation looks grim. Enjoy winning your tough battles but remember that pride comes before the fall. Learn from the mistakes and move on. All the marks left on you from your daily battle in trading will toughen you up and make you stronger as a better trader. Be proud of who you are.