Trading Your Way to Financial Freedom is a good book to read and offers some good insight into the mental process of trading..... Taking time off and reading is a good idea......I saw someone mention the time off.. RAE
After 27 years of trading and backtesting of seeking the highest winning percentage for day trading and short term methods, I radically changed what I had been doing. As the years have passed, I worked less on scores of entries and much more on defining when to pass on a signal and management of the trade once in. This past year has altered how I think in terms of what I want to accomplish in my day trading and testing. So now I spend my testing hours on designing methods that will offer the smallest losing percentages. I use to only test what the "MAE," Max Avg. Excursion (how much a trade moves against a winning trade), so as I can find the "mean" to define the right Protective Stops. But I have taken it a step further, On my profitable days, I backtested what was my mean of intraday drawdown based on one contract. So one way to save all your hard earned trading profits is finding out what your mean of drawdown is on your profitable days and when this figure is reached, cover all your positions and quit for the day. I don't see this as a day where I traded poorly, unless of course I did not trade the rules I have made, I only see it as a day where my method did not work for that day. I am not a loser, the method lost. Tomorrow is another day.
Trade for 2 weeks and then fall back to small positions until you start seeing profits in your positions again. Record the days of losses to find out how long it takes to get your streak back. Repeat. Thats a workable system. Good luck.
Behavioural Investing - A practitioner's guide to applying behavioural finance. There may be better books on the subject, however being new to this field; I found it to be fascinating â even learned something about myself. Develop a trading system, back test it, run it in automatic mode with live data. If your happy with the results (and you can tolerate the drawn down) â turn it on and step aside. Optimized trading systems have a high probability of failure. When you find a set of optimized parameters (test all permutations on a single system (and there can be thousands)) â verify the parameters are robust by varying the inputs around the optimized values. If small changes to your trading system settings cause losses, then it is not robust and should not be used. Often I find that less than optimistic settings are the most robust. One more thing,⦠Successful traders need two personalities â one for social life and one that is hard, cold and analytical â emotions cannot be tolerated and hindsight is worthless. Good Luck.
Cheer up! All is not lost. Simply start small and try paper trading which is trading without actual money. It helps you to learn markets without losing money. Please see following threads for more ideas: http://www.elitetrader.com/vb/showthread.php?s=&threadid=126368 http://www.elitetrader.com/vb/showthread.php?s=&threadid=175912 http://www.elitetrader.com/vb/showthread.php?s=&threadid=176016