Hi NoDoji, I would not "hijack" your thread if I was not also trying to assist you as well so I hope this is of some value. Its the LAW OF INDEPENDENT TRIALS and you very well may know of it(many do not especially in vegas where it might be really needed along with some math skills for so many). For those that do ummm.....oh wait, maybe Mr W beat me to the punch and stole my very brillant reply to your journal......oh well, I guess I'll let him have the credit for this very insightful post......carry on.
It's very difficult for me to erase former trades so they don't taint the current trade. As you know just last week I left a couple hundred dollars behind by allowing one trade to influence how I would manage the very next trade.
There is a difference between gambling with dice and playing a game of odds like trading in the mkts. With skill the mkts can be beat, everyone believes that or else they would just save their money and time and go to Las Vegas for entertainment. Las Vegas wins because the law of large numbers is on their side and the games are regulated by the casinos to enforce that law, like it or not. Skill is outlawed by the casinos, if they believe you have an edge they can and will blackball you. The trader that decided not to trade because he preferred to relax a bit is wiser than a gambler. A trader need not force self to trade. Without memory there would be no learning, memory is a humans most valuable defense to avoid repeating past errors as well as a humans most valuable asset.............. Bottom line, gamblers are losers, traders can beat a game of odds. PS: the best trades are not the ones that are hard to take, the best ones are the setups that feel GOOD,................why else take the trade?
This morning I was thinking about Bob's comment. I reviewed my best trades since I started trading and realized that they ARE the ones that feel good. I've had days when I know exactly what I'm going to do on the open because I'm so confident in the trade and they are immediately profitable. The trades I jump on quickly with confidence almost always turn out well. What's uncomfortable and difficult for me to do is stay with a winner through normal retracements. I found a way around it by sometimes taking profits at the peak of a move, then re-entering the trade in the same direction when a normal retracement occurs. Now, there are trading strategies that are scary and don't "feel good" at first and fading strong moves is one of them. You almost always endure a drawdown as you scale into the position, but the advantage is you are in the position with good size and a reasonable average price when it turns. The key to this kind of trading IMHO is knowing in advance the uncle point and accepting that level of loss; that way how the trade feels is irrelevant, because you know that the majority of the time the trade works well, and if it doesn't you know exactly where you will bail.
I think perhaps some of what I said was not as clear as it could have been. We do not make money in the markets because our normal emotional 'fight or flight' response is followed but rather from overcoming our emotions with logical responses based on backtesting and results we experience. For most people (especially starting out) its easier to stay in a loser and/or even move stops away from the BE than it is to take a small loss. On the other hand its hard for many to keep a winner on for most have a natural feeling of 'fear' that the gain will be lost.(my method or anyone Else's method(s) of trading are irrelevant in this context) "I found a way around it by sometimes taking profits at the peak of a move, then re-entering the trade in the same direction when a normal retracement occurs." - this actually doesn't get you around the changing your trades based on emotion and not logic. For it assumes that by reading the chart your able to know where the peak of a move is. If this was the case you should exit to cover all your trade and reverse Hopefully some food for thought NoDoji : o ) Best to you Bob
Definitely a problem for me, no doubt, mainly a result of letting small winners turn into large losers during my brief time trading.
you can only beat a particular market in a time, but you can not beat the market itself. just like a sports game, you can win a champion in some contest events, but later on new guys in new event will break your record and you will not be a champion any more,that means you are a loser at that time. you can sell ES at 900 last week, this week you covered it and gained, you beat the market. but later on, for example,three months late, ES may hit 1000, then the guy who bought your ES at 900 actually beat you, though temperarily he lose to you. I strongly agree with the second statement: sometimes stay away from the market, because sometimes the market will win.
Did not trade today. Nothing I was watching jumped out at me, things that did jump out, had already jumped by the time they came to my attention, and I did not exercise proper patience in my main long pick, POT. After it ranged for hours, I took it off my watch. A watched POT never boils. It boiled shortly thereafter and I failed to jump on board quickly enough.