Over time I've found these to be my biggest flaws when trading, and how hard they are to overcome at times. 1. Lack of patience (VLO) Bylosellhi, looks like you were right 2. Not following my gut instinct because of fear. I see a set-up, then I tell myself all the reason why it could fail or probably wont work, or if I get stopped out, I wont re-enter even if I think I should ...in the end, the stock goes up..do I buy?..no. 3. Lack of consistency. I trade anything as long as there's a set up. NYSE, or NASDAQ. cm
I used to have the same problem as #2, but then a fellow trader friend told me to think of it as a pure #'s game. You are obviously going to lose some of the time. If it looks good, take it! EVERY SINGLE TIME. In the long run this works out well (at least for me it did), and it completely eliminates fear. You have to trust your approach of course. If you don't trust your approach, then you shouldn't be trading it in the first place. Sounds to me like you are one of those guys who is trying to be right every time. Although this is impossible, there are many traders who think this way regardless.
I had a problem with #2 when I first started but after you see yourself leave enough money on the table you get over it. If your in and you find yourself being impatient tell yourself what happend the last time you did this and you will have your reason to stay patient. If you really start getting bothered though take some off the table, with less money out there it sometimes makes it easier to let things ride. I dont see #3 as a problem as long as you are using the same setup. This gives you a chance to really see how the setup works in different situations, unless you origianlly designed it for a specific maket though. Was that what you originally intended when you desigend your setup now?
I have those same problems. Several times in the last few weeks I saw a trade setup and I knew I should take it, but I found all the reasons why I shouldn't and then I missed out big time. Then I would make stupid trades that I knew were stupid, but for some odd reason I made the trade. I would also spend too much searching for stocks with different criteria. I would end up with several lists and hundreds of stocks, and I would get lost and not know what looked good for each stock. There was definitely a lack of consistency. So last night I finally sat down and laid out three strategies I would follow, along with a clear measurable goal. Each strategy will take up a specific percentage of my portfolio and I'll strictly stick to that. If a stock doesn't fit one of my clearly defined strategies then I wont trade it. The reason I'm doing this is to develop some discipline and consistency. I know what I am good at and what I am not good at, so obviously I'm focusing on what I know I can be successful with. The last thing I did was made a list of rules, things I can not do no matter what (at least for now). I realized some important mistakes I made in the past and the rules are made around those. Things such as trading on pure emotion and hype, when technically I know it's a bad trade. Making an earnings play without doing my homework, just pure speculation. I believe speculation is a good thing, but not when it's emotional. The last thing, if I am having a bad day just get up and walk away. If I'm angry or in a bad mood, I make a lot of dumb moves that I later look back on and wonder why I made such a dumb move.
you must develop rules if you are not confident in your rules, you need to practice and build confidence at the same time, you might see a flaw and adjust your rules WHY ARE THESE JUST WORDS TO YOU for crying out loud STOP right now listen to me, read my lips, read above again
I had to make the same rule myself until i can get past that. If im down more tha 600 I close things out and papertrade the rest of the day to try and get rid of the revenge trading impulse. Way i figured it is if I cant papertrade sanely after a big loss then i def shouldnt do it for real but im getting better about that now because of the practice.
"1. Lack of patience (VLO) Bylosellhi, looks like you were right 2. Not following my gut instinct because of fear. I see a set-up, then I tell myself all the reason why it could fail or probably wont work, or if I get stopped out, I wont re-enter even if I think I should ...in the end, the stock goes up..do I buy?..no. 3. Lack of consistency. I trade anything as long as there's a set up. NYSE, or N" Imo, You've identified the weakness. You will succeed. Item number 1, I'd say this is a very important "learned" behavior. You will move this mountain. Patience to learn patience. Number 3, consistency will come first in the form of avoiding losers rather than always picking winners. Number 2 - The aha moment, patience first, consistency in avoiding the losers, the fear will be replaced with confidence, confidence because I am patient, confidant because I have avoided the losers.
A trader's therapist once was quoted as saying that most of the psychological problems he dealt with really were the result of the traders not having a good trading method. I feel that when you get that in place you will find that trading takes about as much guts and psychological wherewithal as mowing a lawn.