phantom rule#1 " assume we are wrong until proven correct! " http://www.futuresmag.com/futuresclassroom/phantom/phantom.html
Wow, I was just gonna recommend Trading in the Zone - it has saved me mega-thousands. It's the bible of loss-taking psychology IMO. Good Luck - you can conquer this once you practice the specific exercise listed in this book. Paul
to quote a famous Far East general... Comprendre?!!! if you go in >without knowing where you will exit<, or at least a reasonable idea within a parameter then you will be unable to make that decision when the emotion and noise raise the stakes higher and higher, and the notion of "as son as I exit it will reverse" becomes louder in your brain... like a Faux Siren Song ! If you set a first or intial stop "limit" in your head where you will begin to seriously consider exiting some or al; of the position, and correlate that with a level where it is probable you won't immediately be whipsawed with a move back in the intended direction (immediatley after you pull the trigger), this will help give you a strategic decision to rely upon. Set a second limit where you will >>leave the trade<<, NO questions asked; and accept that you will live to "fight" another day... maybe even re-entering the same position on better confirmation and set up. Ice
If you are not already using one, I suggest you get backtesting software. The cheapest one I of know of is Amibroker with Telechart 2000 data feed. Once you start playing around with trading system ideas (even if your specific system isn't programmable), and playing around with profit stop levels and loss stop levels, you quickly come to the conclusion that a profitable system is a probability game were you finely balance your profitability percents and your profit taking levels against your loss taking levels. If you get backtesting software that displays each trade taken (as Amibroker does), and analyze each trade over so many months as if it were a trading log, you will quickly come to the conclusion that taking losses is part of taking profits. Once you are shown how that works out over time as a mere matter of statistics, it helps you take your losses quickly and move on.
Who on earth can teach you "self-discipline?" This is an inside job. You are getting all kinds of advice about how to set "external" controls on your trading, but we both know that the real problem is clearly stated in the first paragraph in which you said "The problem is every so often i get wired into a trade." Being "wired" into a trade is a psychological disorder, not an execution or trading plan problem. People always set up these external controls on themselves, but they rarely work in the long run....as they don't address the psychological cause of the problem. Self-discipline begets self-discipline. There are no easy answers to the questions of why we don't do what we know to be right. Trading is easy, just follow the rules, right? But what prevents traders from following the rules in a disciplined manner? This is THE most important question which begs an answer for those who suffer from the inability to stick to the rules. Successful traders are either "wired" to follow the rules from the get go, or they have overcome their tendencies to break the rules. If the problem is chronic, see a shrink who specializes in overcoming this kind of problem.
>>>"There are no easy answers to the questions of why we don't do what we know to be right." no "easy" answers, but there are answers... and a large "answer" is having a notion in advance of what FOR YOU, is the right thing to do. A plan, a strategy. We all know Aristotle's (and Shaq's) view of success: "We are what we repeatedly do. Excellence, then, is not an act, but a habit." Get in the "habit" of accepting a time and place where you ACT to exit the ride... and by "repeatedly" doing this... each time and over time, better and more proficiently... albeit always imperfect... you will move in the direction of excellence. A key for me after doing this for over 18 years: acceptance that I'm imperfect; acceptance that the market is always open and will never run out of bountiful, in our lives. I would add that if you do not find you are moving in the direction that you seek.. you may consider doing other things besides trading, with your given skills and ability.
I agree with what you are saying. However, like Shaq who didn't reach his potential until he found the right coach whom he respected, some people need to find the right coaches and trainers they will finally listen to.
Agreed... but in the final analysis, no one can do it for you... when you stand at the foul line, YOU still gotta make the shot!