One bad trade = 10 bad trades

Discussion in 'Psychology' started by bkveen3, Aug 26, 2008.

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  1. bkveen3


    It always seems that whenever I make a mistake that it turns into a slew of mistakes. Why does this happen and what can I do to keep this from continuing to happen.
  2. This always use to happen to me while trading intra day (even happens now sometimes).

    I found the best way to combat it was to cut down on size and frequency which is better said than done I know. However if you think of each trading day as being a punch card and you only get so many punches you will choose your entries and exits a lot more carefully.

  3. It would help if you describe your mistakes because different types of trading mistakes often has a different solution.

  4. bkveen3


    I interpret PA at S&R and PP's. Stop right out of reach of support limit at next technical level.
  5. Are you saying that just because it's a loss it must have been a mistake?

    Simply, if you followed your well defined trading plan involving PA, S&R, PP's or any other short hand words...

    It's not a mistake regardless if its a loss or profit.

    Thus, that make a mistake in assuming that all profitable trades are not trade mistakes.

    However, if your consistently being stopped out just outside of a support limit...

    You could be misinterpreting the PA or S&R.

    We won't know where exactly is your problem because you have not provided any chart examples.

    Once again, if your following your's not a trade mistake just because the trade resulted in a loss.

  6. bkveen3


    I like this. I can't help it but when I misinterpret PA I immediately think I should have done the opposite. Ignoring any of my previous rules and just taking on a new trade. I need to be so much more disciplined. I have a profitable system but when I get emotional I lose money. I just have so much trouble not letting loses affect me. I feel like I have to earn it back immediately. Are there any books you would recommend to help me with this.
  7. That's the message post with the critical information.

    * Ignoring any of my previous rules.

    * I get emotional I lose money.

    * I feel like I have to earn it back immediately.

    Most discipline problems occurs via something outside of trading...

    Something that has absolutely nothing to do with trading.

    However, if you're one of the few in which your discipline problems is related to trading itself...

    We all know a quick fix (temporary solution) is to reduce position size, cherry pick (less trades) while spending more time examining any recent changes in your trading environment.

    Here's a few examples out of many more I don't have time to mention that involves stuff outside of trading that has impact on your discipline while trading:

    * Financial or Debt Problems

    * Marital Problems

    * Health or Stress Management Problems

    Here's a few examples out of many more I don't have time to mention that involves stuff inside of trading that has impact on your discipline while trading:

    * Slow to recognize/adapt to a changed market environment

    * Undercaptilization

    * Underestimating the impact of a key rule/condition change in a profitable system

    Yep...there are many books on the topic of Trading Psychology that deals some of the topics above.

    However, you need to isolate or identify the reason(s) that's causing your discipline problems and then go find a book (may not be trading related) that deals with resolutions for that particular reason.

    Until then, the temporary quick fix (lower position size and trade less), will give you some more time (slow the bleeding) to identify the cause and to find a resolution for the cause of your discipline problems.

  8. Great post, Mark. There are no quick fixes.
  9. whoodi


    bkveen3 dude you main problem is that you lack will power. You lack the control over the impluses that cause you to not follow your system the way you should.

    Will power: is the ability to overcome laziness and procrastination. It is the ability to control or reject unnecessary or harmful impulses. It is the ability to arrive to a decision and follow it with perseverance until its successful accomplishment. It is the inner power that overcomes the desire to indulge in unnecessary and useless habits, and the inner strength that overcomes inner emotional and mental resistance for taking action. It is one of the corner stones of success, both spiritual and material.

    You must make a conscious decision to widen your stop and trade less size so you don't keep getting stopped out. This is hard to do because your motivated to make money, which comes from being greedy.

    You can develope will power by forcing yourself to not give in on simple impulses you have. Over time it will be easier to do what your supposed to.
    ie: no food after 9pm, exercise 30 min a day for a week

    As soon as I discoverd will power was my main problem I focused on changing bad habits kept a journal and literally became a better trader overnight.

    Check out the site below thats where I got this stuff from.
  10. I have the silimar problem. but I conquered it.

    when I got loss, I reversed my holding, if the reversimg does not work, I killed the symbol and found another one to deal with, if that works, I focus on that one and quickly recoup my loss and gain more, when I climbed out of the hole, I put back the old symbol, and then I saw what other guys are doing, find a spot and get in, then recouped the loss and gained, in that way actually I am reverging it, but I am objective at that momnet, I hate getting bitten by some symbol and I must gain back the loss, then I feel great, that makes me happy.

    human beings are emotional creatures, you can not kill your emotion, you only can manage it, either smartly or dumbily!
    #10     Aug 27, 2008
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