Yeah, you are right. Keeping a journal would keep me honest. And keep me from repeating the same mistakes over and over. UP a lot then down then UP and then down. Now I realize there is still a lot more for me to learn and tweak my strategies. I mean avoiding Type 3 errors would go in a long way. But there are a lot more nuances that I'm beginning to see. It's a constantly journey. Automating it might be the first path toward consistent profitability. P.S. I got out a medium sized loss. Then it rebounded a little and said I should have held on just a little longer for a slightly smaller loss. But then it down even more after that. Lesson learned. Honor your stop points. Hope and fear. Fear when you see losses so cut them short. Hope when you are in gains for further gains.
If you require absolutes, trading is the last endeavor you should undertake. Again, take out the emotional aspect of your trading (as you describe it as "hope and fear"). Set your stop-loss and profit target at the time of trade entry. One of two things will happen: 1. you get stopped out, or 2. you take profit. Furthermore, make that stop-loss and profit level resting limit orders so that you don't sit there and get cute about taking a loss or a profit. The sooner you become an emotionally detached, psychopathic automaton with respect to getting into and out of the markets, the sooner you will start to make some money at this.
One of my painful trading lessons was when I was using the MACD system. The histogram in the MACD had shown a signal to sell, so I rushed on but it was not an accurate signal. Now I filter my signal with more indicators like using the Relative Strength Index (RSI) to confirm the signal.
Following a false signal is something we've all done at some point, I think. Probably more than once. It's very frustrating, but it quickly teaches you to double-check your signal.
A signal is just a signal, performing exactly to it's specifications/instructions. Wether it's "false" or not, may have nothing to do with subsequent price action. Of course, the better the signal is, the less times it will exit against you, but your stats shows you that, right? The stats will often say how many losses to expect, or at least it should say that. So then the losses will be part of the signal! One single trade means nothing and can always go 101% against you for whatever reason. Therefore it's often a mistake to change your rules in major ways during a trade. But, here's the crux: Unless you adapt and update often, your rules are probably not the best they can be, unless you're consistently profitable for a long period. So it's an art to improve, but without attaching emotions and hope behind the changes, but real insight from the full data (not just from one trade - remember?). So easier said than done, and one of the skills one need to aquire is to recognize such mistakes. Because if you believe you're flawless, that's probably a bigger mistake right there.
I'm very far from believing I am flawless. I am impatient, anxious, occasionally greedy, more often than not more fearful than greedy, occasionally too impulsive for my own good. It's really hard to trade without attaching any emotions to it, although I work on that every time I trade. I think I've improved somewhat, at least since I began, but I know I have a long way to go.
The real painful lesson is not from market but it is from those brokers who scam you or cheat you smart just like Instaforex that has cheated many of their profits.
I quote myself, "As to the 80-90% hit rate, I need to go back and quantity it." Luckily, FundSeeder has done that for me! Now, it confirmed everything I've been suspecting. I have extremely high hit rate, but the occasionally loss really screw me over. This is on one of my smaller account. As you can see winning % on Equities is 82.3% and on futures it's 71.8%. But if look at the monthly performance, Nov 2015 and April 2016 account probably of all the losses. And in those 2 months it's just one trade each that costed the catastrophe losses. I need to learn to take small losses. haha. I have the same pattern on the other accounts. Though 2 of my 3 accounts are net positive, they have high winning percentages but big average losses. So, cutting losses is the main culprit. Is this the right diagnosis of the problem guys? I love FundSeeder objective and quantitative proof. Thanks for any advice.