Parameters I imagine may be affecting stress: - Knowledge level/methodology: - Bet size - Account size / personal net worth, i.e., how much does the money you're risking mean to you - Importance of your results, i.e., do you need to profit in trading or would you be completely fine if not - Trading style/time frame, i.e., scalping would be more stressful than position trading If you have a good methodology, ample market experience, don't overleverage and don't really need the money - your stress levels should be close to zero. Of course, there's certain personalities that wouldn't be okay with trading regardless of these parameters. Personally, I still experience stress in trading, but it's not something which bothers me. I could trade 1 MES instead of 1-5 ES and effectively reduce stress to zero, but then the returns would be too paltry for it to be worth it. I was much more stressed in the past and would literally get cold hands and feet when the bell rang. Not any longer, but I would be lying if I said I didn't experience any stress. As my account grows I expect my stress to diminish even further.
It is a fact that stress is the greatest cause of business failure in trading. It is best to avoid trading if you have stress or any kind of psychological imbalance because we tend to see things in a negative way when we are under stress or depressed. Even if you experience losses, it is better to close your system and stop trading for a time. Stopping when you are stressed can damage your trading capital, good decisions cannot be made in a state of stress, so avoid trading in such a state of mind.
The concept of stress in trading is foreign to me, even 21 years ago when I started it was exciting not stressful. If you have rules and process it's fun. I genuinely love it.
Right... so I no longer take big stops, doing the death of a thousand cuts thing on red days instead : o
Daily P&L is what matters, IMO. I've slowly learned that it's better to give a trade room to breathe and even scale in/out instead of taking almost certain losses using too small stops (which quickly add up). But that's also instrument dependent, I suppose. Some instruments are more suited for using smaller stops. Generally, index futures which I trade are not
Thx ddog! For once I'm booking early profits today and stopping trading at 11 a.m. thanks to your nudge to follow my rules. Much appreciated. I turned off my main monitor and I'm downstairs now typing this on my cell phone to avoid temptation to trade.
Great points. The strategy that I found most profitable is to use a blend of both hard and trailing stops with a ladder of 4-6 trades, spaced out .3-.4 My best exits are always after something's run up in my favor and then I tighten up the trailing stop manually within $0.20 of the inside. Trailing stops are challenging because they frequently get stopped out. But they also work occasionally as well, which is helpful when you do as many trades as I do, which is often 40-120 trades daily with small 200 or 300 share trade positions