How do I trust myself and follow the system? The worst thing is to have a winning system and lose money because you can not follow every trade. I am sure that many of you out there at Elite Traders might have studied in this area, can anyone guide me, please?
You don't need to follow every trade because that's not possible due to the fact you won't be able to trade every trading day (sick, vacation, personal appointments, computer problems, broker platform problems et cetera). Therefore, the real question is what reasons do you have when trading that will prevent you from following most of the system trades??? There's two possible reason why traders can't follow a winning system when trading: * There's something about the system that prevents them from developing confidence in a winning system. * There's something about you that prevents you from developing confidence in a winning system. In my opinion, one of the best ways to get over the fear of following a winning system or to develop confidence in the system are via the following: * Watch someone in person use the system profitably in front of your own two eyes for many trading days. (no chat room stuff) They dont' need to coach you unless your need help from someone that specializes in the psychological aspects of trading. The purpose here is so that you can see someone else that has confidence in using the system and that in itself is very empowering. * Start very small on your position size until you develop enough confidence to consistently apply the system prior to moving up to your normal position size on trades. The above will help you endure any drawdown periods that may show up during your early use of a system because you've reduced your risk exposure during that critical early use of a new system. Last of all, the key is to apply the system most of the time instead of just on a few occasions when you feel good about trading. At the same time, it will be impossible to trade every trade signal by your system due to the above reasons I stated unless your using a automation trading system that places the trades for you. Mark
I see a psychologist and talk trading with her. I probably bore here to death. lol. Anyway she has helped me alot with certain techniques to control myself and calm back down. Simple things we go over really but the accountability of me owning up to her and being honest about my trading plan etc has really helped me. Also the new book by Brett Steenbarger "Enhancing trading performance" has been a great read and probably the best book I have ever read on trading. Alot of the things he says just really clicked with me. Trading instruments and setups that work with ones personality are essential according to Brett. I agree 100%. Looking back through my trading career I have found a pattern of what works for me and what I will drive myself to be better at day after day. Read the book you will definitely benefit from it. I have no affiliation with Brett whatsoever.
you can affor to lose $5000 but can't afford $500 in coaching from a professional trader that can make you $200,000
I was asked via email to clarify the following statement I made in this thread... * There's something about the system that prevents them from developing confidence in a winning system. Here's an example of the above. Lets pretend you don't believe in Breakout Strategy and you tested many that only resulted in you losing money. One day your given another breakout strategy that has a positive expectancy in backtesting results. Lets call this System A. Lets also pretend you believe in GAP Strategy and the ones you've used in the past have made you a little money but only that because you have a problem in managing profitable trades. One day your given another GAP Strategy that has a positive expectancy in backtesting results. Lets call this System B. Which one are you likely to develop confidence in applying along with willing to endure any drawdown periods that may/will appear??? * System A * System B If I were to do a poll I strongly suspect most will select System B. Simply, if we already believe in something, the odds are good that we'll apply it in comparison to something we already have a bias against. A trading coach can't help you here unless that trading coach is trading profitably in person with real money in front of your own two eyes... Trading a system you already have a bias against. Another issue here is the fear of losing money. We all believe something has merits when making money the the first little drawdown (consecutive losses) will cause most to second guess themselves and such is commonplace for new traders or traders trading a new trading intrument. A good way to start dealing with the fear of losing is to only trade with a small position size until you've traded through several small drawdowns to only see your profit curve start rising again to reach higher ground... Continuing until you feel confident and accept that losing is part of the game along with having confidence that the system will perform well again to send your profit curve higher. 5 steps up and 3 steps backwards, 5 steps up and 3 steps backwards et cetera. The fear of losing is one of those things that most traders need to resolve on their own unless its so bad that they need professional (psychologist) help. Heck, some of the world's top athletes see a psychologist on a regular basis to help them stay at the top of their game or to get through situations where there's a potential of self-sabotaging. However, the reality is that these are million dollar athletes and they did not get that type of help when they were beginners. You'll also be surprise by how many of the worlds top athletes, top wall street performers use Yoga to help with the mental aspect of their game. Regardless to how a person tries to resolve the fear of losing or any other psychological problem area of trading... Something needs to be done instead of doing nothing prior to the next drawdown period. Mark
they see a pyscologist for their personal demons don't trade when you are mad or depressed. if trading, cutting your losses is rule number 3. you should be afraid if you keep losing money.