Every night I plan out the coming trading day with regards to entry and target areas. I'm usually right on the money with my predictions but the problem is I am most often trading against myself, in the opposite direction of what I intended the night before. Today as the market ran up from open until close I practically called both bottom and top in my journal last night. Unfortunately, I took only two trades today, both short. It's like being right and still finding a way to not profit. What the hell is causing me to do this? --opm8
well at least u were wrong in your trades in the first place; i was in and long near the open and got shaken out by the luuvley ym churn...of course out at the lows and 3sec later woooosh...mkt on fire. how amusin'.
Wish I knew how to stay on plan also. First 3 months I traded in a pro traders home. He told me when to buy/sell and size for my account. I followed the trades and banked over 20k on my tiny account. Next month I setup at home and pushed the equity to +27k. After that I couldn't follow the plan anymore. Lost 12k in month 5 by not being able to take a loss. I've been trying to get on track ever since. Papertrade...everything is perfect. Real money...I keep finding a way to prevent myself from achieving success. Either I get my act together or I've got to give up...no more rationalizing. Second guessing seems to be my current problem. Just need to trade and let the results flow. Easier said than done. Making me one stressed out dude!
That's a good question. For the first trade the answer is that on an intra-day timeframe I read my charts to see that the up move was diminishing. In retrospect I misread things (20-20 hindsight) and more than anything jumped the gun. My plan is based on a daily timeframe and here I was reading a lower time frame chart for a signal. Not only that, but the lower time frame chart didn't even show a valid short signal. The second entry was valid as an intraday trade and it went on to hit its short time frame target. I did not exit however, thinking (aka hoping) it was the top of the move and not just a minor retracement, which it turned out to be. Either way, I should have taken the small profit since this trade was based on a lower time frame. The mistake was trying to force this trade into my original higher time frame plan, which it was not part of. --opm8
Is trading the intraday setups you mentioned above part of your regular trading plan, or were they just spontaneous decisions? Did you not execute your actual trading plan from the previous evening because the market didn't trade to your planned entry point, or because you hesitated when it was time to execute your plan? If the market didn't move to your entry and those intraday setups above were not part of any formal plan then I would say you need to be content with trading the setups that your plan generates and with which the market cooperates for entries. I've had problems with missing entries and then trying to make small countertrend trades because I wanted in on the action. It's very useful to keep a running tally of how much it has cost you to take trades that are not part of your plan (it might be a bigger number than you expect). The boredom can be tough, but fortunately sitting on your hands doesn't have a negative impact on your capital. If you hesitated, that might be an indication that you're not confident in your system or in your execution. Do you feel that you've done due diligence in terms of realistically testing your system and that you're comfortable with its expected returns and drawdowns?
Forget about this psychology stuff. Just upload your orders to the broker the night before, or just pay someone to trade your method for you. RoughTrader
I think one of the issues with consistent, disciplined trading is that often times, whatever "system" that one uses is too "rigid" with too many rules and exceptions. This makes the system too complicated and rigid, which is not always easy to follow. (UNLESS you're talking about an automated trading system, where a human emotion & discipline is not a factor) I think one's trading system should be simple and natural. During the trading day, you can't afford to look/think about what you're supposed to do. Instead, the system should be natural enough that every trade you make is effortless. This way of trading gives you more confidence and less of fear. The lack of confidence or fear of losing money is the reason why people often times just sit and watch, not being able to pull the trigger even though you already guessed right about the movement before the run began.
Its easier to second guess yourself when the market is open because there's always that "What if..." question that pops in your head. You need to trust your research, charts, indicators etc... If you cant do that, then something needs to be changed. In my opinion, I think paper trading is harder simply because its PAPER, not real money and I dont take it as seriously as when I place a real money trade. Eventhough I'm still kinda new to trading, its the real money trades that I learn the most from. I think paper trading is best for testing ideas, not really trades themselves.