Rasl, I know this problem and paid a great deal for my slowness in overcoming it. 1. Listen to Lescor not Cashmoney (check lescor's P&L postings if you have any doubt about this view). 2. Get Brett Steenbarger's new book on trader performance. Look at the behavioural and cognitive things you can do to change your habit. Do them. Repeatedly. With great involvement, emotion and pig level commitment. 3. Maybe you can change your environment. I removed (over time as I learnt) anything that could trigger countertrend trades ... maybe you see them on a short timescale chart you don't need while waiting for your main setup ... maybe you have pivots on your chart (but they're not part of your setup) ... etc etc Get rid of any setups that need things that tend to trigger your countertrend urges while you change your habits. Its like the fat guy - get the therapy but also keep the fat guy food out of your house! Work hard at this and you'll join those of us who no longer trade to be right and no longer pick tops and bottoms. The best of luck.
<i>"but I have a bad habit"...</i> Your own words admit that seeking price turns is not part of a sound methodology you adhere to. If what you're doing is part of a solid approach, you would not label it a "bad habit". <b>lescor</b> is 1,000% correct, as usual. Same for <b>kiwi</b>. Somewhere in your cognitive learning process you internalized that picking tops & bottoms = pleasure. You find those infrequent events of "being right" and getting the best possible price more rewarding than the pain of being wrong a majority of times. Said another way, you feel better in many ways to catch a top or bottom (best price, sale, discount, savings) than losing money makes you feel worse. Get it? You have not created a solid, robust approach to trading profitably <b>that you believe in</b>, so you continue to do what the vast majority of traders do: take shots in the market where it feels best to you. The advice given in posts above is sound. The recovery from a price-turn trader to a profitable one is never easy. Best wishes your self-therapy process!
Rasl, unfortunately my experience and advice on this subject is not worthy enough to kiwi, but I mean really...who cares?. I dont. Rasl, I've done enough of that type of trading to make the comment above. I would not lie to you, and that means more than what my f*cking p/l is any day. good luck in your trading cm69
sometimes picking tops and bottoms are required. like if you are making a FA play an waiting for a security to correct itself. you cant always wait until the correction starts happening to take a position. sometimes you just have to take a position, eat losses until the correction that you know needs to happen, happens. the above leads me to believe that almost any trades based on FA corrects have to go into the negative before becoming profitable just by the statistical probability of being able to 'guess' the top or bottom before it happens. more often than not you wont get lucky and buy right at the peak, meaning you'll have to accept the trade going into the negative a bit while it waits to correct. thoughts?
I agree with you walter. It's almost impossible to know if a stock is just pulling back or reversing.
when i replaced contrarian (peak and bottoms) trading with momentum (go with the flow), i started making money. stop trying to outsmart the market by predicting tops and bottoms. also, just when it cannot go any higher, it does and just when the market cannot go any lower..surprise, surprise. So why fight the trend? in this game, there are no awards or prizes for being first or smart. its not high school or sibling rivalry. you either make money and enjoy a life that people only dream off or loose money and join the J.O.B club. you are always wrong until the market proves you right. think about it. just my 2 cents
You betcha you care otherwise you wouldnt have put up this post. Kiwi is right about not listening to you but rather listening to Lescor. He has years of experience and profitability over you. You are still a losing trader at this point in your career. Lescor made close to half a mil last year. Whose advice do you think is more "worthy"? Think about it. No offense CM69, but you arent a profitable trader yet, so your advice is, more or less, worthless. At this stage you should be asking questions not giving advice. When you do turn the corner and put up a nice profitable year, by all means, dish out advice.
That's like saying someone who hasn't won an Oscar, isn't a good actor. What your saying is that I could have 5+ years as a trader (not profitable), but put me next to a newb starting his first day of trading... my words are just as equal??.. basically worthless?.. and you dont want me to take offense?
The fact of the matter comes down to whose advice is more worthy to the original poster. Based on following his posts for many years here and seeing his P&L, I would much rather listen to Lescor than you, someone who admitted to being down last year. There is nothing wrong with taking some losses while you learn to be profitable. Thats how we learn what works and what doesnt and we make adjustments. We ALL go through this stage. I think you need to get past your ego here and see things for how they really are. You are disagreeing with one of the best traders on this site about TRADING of all things. Thats like me walking up to Peyton Manning and telling him I dont think his approach to football is the right one. Think about how silly that would be.
The problem raised by the OP has nothing to do with picking tops/bottoms. The particular strategy used is irrelevant to his problem. As Austinp said, he derives more pleasure in being 'right' than he suffers in pain when 'wrong'. He is trading to ellicit an emotional response. He is not 'trading to trade well'. I'd be willing to bet that he does not document all his trades and calculate things like expectancy for his strategy. If you keep good records and review them often, it is a lot harder to fool yourself about what you're doing.