old issue of mine... and I realize it is as much a mental thing as any. I have been TRYING to let me trades work and run. It just hurts to see trades go positive and then when done my trailing stop (I use PSAR) either gets me to break even or a small loss. I think for now I need to go back to bracket orders that put in both a stop loss order and a preset target limit exit. It just FEELS so good to take profits. Yes, I have to get over the idea that a runner may go and I was not there for the whole ride. anyone else want to comment on the mental / emotional side of this issue. It would seem like a technical thing , but it is not.
It really depends on how the trailing stop vs. fixed target method affects your winrate and expectancy. Personally I tend to prefer a higher winrate and the resulting more consistent PnL growth, smaller and shorter drawdowns, etc. over greater long-run profits. Emotions are part of the reason, another is that it takes much longer to realize that something has gone wrong with a system that's only supposed to have 25% wins, versus one that's supposed to deliver 55%.
It's easy to see runners, after the event, which makes it seem like every trade will be a runner, but 90% of trades will be range bound and won't run and will hit your trailing SL, I gave up on that idea a long time ago. Small but okay profit, bank it, repeat endlessly. I manually close all trades, just incase I get a runner, too worried about reversals so I generally well always just get the first break out!1
yes, that is exactly how I feel. Banking lots of 7, 9, 11 point wins and forget about going for the 30's and 40's and more (I trade NQ futures) my trading software tells me all kinds of stats, including the "max profit" that a trade was at, it is amazing how many trades have a profit at some point.
Agree. It is an emotional thing. BUT the more we develop ourselves and our systems/methods, the closer it can get to being technical, automated or not. Profit or loss, exiting for me is "freeing"... I can concentrate on what is next. This blends right into your "idea" of a runner. Rather than "get over" this variant of FOMO, learn to re-enter. Talk about feel good... Bank profits, and re-enter! Re-entry is a whole new trade with different requirements, parameters and expectations. NEXT!
For me, it's not emotional or mental. For my trading plan, I know exactly how I would've performed over the last several months / several hundred trades, if I had aimed for a profit target of 1:1, 1.5:1, 2:1, etc. I also know exactly how I would've fared using various methods of "scratching" some trades at break even. My current profit-taking method is based entirely on an in-depth analysis of prior trades. I could still decide to pick some other method based on a gut feeling or thinking or whatever, but I just assume what has worked best over a statistically-significant period will continue working, and so I stick to that. I also continue to record and analyze every trade and will make adjustments if one profit-taking method appears better than another, though it must be established over a significant time period / # of trades.
enter however once profitable look to a 20 period average to exit the trade. 20 periods is the least look back period for statistical significance.
This is where I direct my focus. My mission is to make money consistently. If that's happening, I'm happy. I'm not really all that concerned if a runner goes and I'm not there for the whole ride because that is not my goal. My attitude is, "Oh well, another nice opportunity is coming along any moment now, so no big deal!"
Yeah! This is where I'm at because I am not yet to the level where I can fade in and out of positions.
John9999, As long as you are changing your fixed stop loss and fixed profit target per trade and per market conditions, you will be fine. If you are using a fixed stop loss and fixed profit target for ALLL trades, then you will have a drawdown once market conditions change. But using a bracket is fine