Discussion in 'Psychology' started by ilcaa, Jul 19, 2005.
You make all of this sound so easy.....
Spend your initial time developing a system------------then when you have something that works you can develop a goal over time. When you have a system that can make a minimum of 4 ticks a day per month, then look at goals to advance your system. Goals are very system dependant and to just have a daily goal without a specific system to attain the goal is just a waste of time. Systems and psychology create the profits----------goals "can" improve the profits.
Agree...way too easy.
At the first look, 5 pts dont seem to be that difficult, but for a newbie trader it definately is. Especially if youÂ´re going for 5 consecutive days with 5 pts each day, this is not a realistic goal to start with.
IMO you better start with something really low like one or two pts a day and then while trading find out what your comfortable with.
Remember - setting unrealistic goals will produce even more stress and that is something you definately dont want to have to deal with, especially as a beginner.
id say 5 days wasnt enough to show any level of consistency.
so 20 ticks = 5pts then? i take it you are trading es? imo indices tend to form a 'character'. they move in a certain way for a few days, then move off into a different type of character. a simple example of this that you may have noticed is that after one or two extended trend days in a row, the market will trade in a tight range for the next day or so.
the implication of this is that you may easily get a 5 days in a row where the character of the movements easily suits your system, and you reach your target easily. you then start to double your exposure by trading 2 lots, thinking youve got it cracked at last. as you do this, the market changes to a character that doesnt suit your system and you are taken to a nasty place. you end up scratching your head wondering where you went wrong and believing that its your trading/decision making ability that has changed, when it isn't as simple as this. you just used the wrong tool for the particular job. this starts to build a negative loop which you can do without.
this is why you need to focus on behavioral stuff first. and build a lot of consistency and confidence. if you make trading well your first priority, rather than money, or swinging size for the ego, the money will naturally follow.
i made this mistake early on. trying to run before i could walk. its better imo to spend a few months hitting out singles before trying to play pro straight off. take your time and you will get there much quicker.
we have all been there.
read up on what grob109 calls drills.
na has also posted some great stuff, as has futurestrader71.
not my intention to make it sound easy, it was not!!! Though i did not lose alot of money, i would go on edge alot and lose my composure consantly....maybe I would be 2 ticks from my goal then hold a loser cause I didnt want to give my whole day back to eventually 1 trade ruining my profits and some!! . then I would just lose my entire character and freak out. Even sometimes i would hit my goal and I would be in a great groove but i was so worried to put on a trade and just lose my confidence and quit...I now realize that I was developing very bad losing habits EVEN when I had winners and achieved my 20 tick goal. i have been trading 2 lots recently but felt exhausted and stressed and cant see a long term profitable future at the rate I am going with this method so I have taken a break trying to find answers...
I started "really understanding" the psychology of trading and the importance of creating those correct habits/states of minds/behaviors in order to succeed so I wanted to know the goals successful traders have, so thanks for the input. as someone mentioned i will look into Grob and futures71 posts, if you guys have any site or exercises that have really helped you please let me know...thanks..
the best way to describe the system(s) I am now using is that it "floats" on the open forex market.
while I do have a "system" in place, I also make "play it by ear" independent trade decisions, so that I may open, or (mainly) close a trade at various TP levels, based on what I sense is going on in the market at the time determinations are made.
a contrarian structure, I trade with the market and also slightly against the market at the same time, just enough to scrape off earnings by counter-friction.
so far this is working out pretty good without putting my trades in blatant jeopardy or exposing them to too great of risk.
It gives me ultra-control of my trades, more than just doing the straight system route, or trading strictly on my own market wits.
Ilcaa, I've seen your other posts in the improving trading skills thread, and there has been some great messages - especially Fut71.
I want to add that you seem to be honnest to yourself. It seems you have a good idea of where your problems stand. And that's what you need to overcome your psychological issues.
Just a few words on your trading system. From reading your posts, I haven't seen you once mentionning any problem with your trading system. Without disclosing it, can you elaborate on whether your system provide you an edge and how confident you feel about it, ie following it ?
If possible, it should have sound rules and exlude any form of discretionnary decision. You want to avoid involving your appreciation of the market or of your positon when in a trade until you get a better control of yourself.
If your immediate analysis/appreciation of what's happening is needed either to get in or out of a trade, then stop trading now. Go back to redesign your system and make it 100% mechanical. You'll work on the psychology issues after. That's the best advice I could give you.
Now assuming you are ready to trade (and I skip the "enough capitalisation" and "scared money" steps wich are as important).....
Once again, remove all daily, weekly, monthly goals and thake what the market gives you.
Money goals are mental barriers that will just keep you into the "failure feeling" trap when you won't reach them and will impact you greatly.
The same goals, when reached, will make you hesitate to take another trade and miss the big winners that pay for the loosers.
I'll suggest one simple exercise. Take all the trades that your system gives and watched yourself.
Watch yourself when you get in, while in the trade and when you get out. And while you wait too. Be Honnest. How did you get in ? did you hesitate ? did you trigger too soon ? or too late ? did you chicken out ? did you stay too long ? How did you do compared to what the system said ? Answer to these questions for each trade. Write it down, keep a journal whatever suits you.
Fear, greed, anger, whatever you are feeling you must know them. Know when they kick in and why. And how they influence your perception of the market actions. You must know your weaknesses and learn how to not listen to these little voices.
Your Objectivity is the only goal.
Then you should get confidence in yourself and in your system.
Then money should come.
Again, just my 2 cents.
Separate names with a comma.