I know completely what you're going through. I still haven't found a way to beat this demon and I tell you it's an expensive one! Once it occurred to me that this could basically be a tantrum that a child throws when it gets frustrated with something. It could also be an inability to be compassionate towards self. I believe it also has something to do with self-punishment for bad performance. Let me guess - you never got any praise for great performance and only punishment for bad performance from your parents. My guess is that you are also very competitive and you totally despise losing. There were some very appealing responses. Please, keep the ideas coming.
I think a daily loss limit should work. You need a point where you walk away from the computer and don't come back until you're calm. One thing that I am experimenting with is taking a 20 to 60 minutes break to clear my head when I start feeling the urge.
If there is one large defect I carried with me into this career, it's the statement above. I've always been a perfectionist (another trader's defect, though not as bad) and very competitive. As soon as I eliminated this personality defect as a trader, I welcomed a loss as a gain: I'm out of this trade before it becomes a big loss, and I have the money to trade another day. Once I was able to do that, suddenly I didn't have many losses any more.
2 things that can help, not in order. 1. Discipline. Set a rule to NOT trade after a loss for 1 month. If you can't follow this rule you are not serious about trading. You are using trading to satisfy some other ego needs that you might have. 2. Play with some math about expectation. You should probably use about 60 trades to evaluate yourself. Few trades do not matter at all. Loosing few trades and getting upset about it means that you have no idea about the expectation of your trading system.
NoDoji, you made a great point here. You have completely turned around the perception of losses as something bad that one subconsciously needs punishment for. Once you do that then several losses in a row should no longer produce such a huge amount of frustration to cause this revenge trading onslaught. Another thing that's worth examining is how do you feel when you miss a large move after a few losses? (I believe someone already mentioned something similar in one of the previous posts).
Most traders do not have the patience to trade and really think that scalping for a few ticks or even a point will do the trick. On the contrary, you will be more successful if you have a longer time frame. And yes it will require more than a $5k account. The vast majority of day traders lose, while the vast majority of long-term traders win. Why? They don't let "noise" dictated their trading I would suggest if you are capable of doing it to open two accounts of the same size. One for day trading and one for holding positions over night. You will be surprised at the end of the 12 month that your ROI on the long term will do much better than the day trading account. Of course, you will get a "million" traders telling you the opposite. But if you must day trade, because you have fire ants in your testicles, I would suggest that you do the 2-1 contract. Enter 2 and liquidate one when you see profits and bring the other one at entry point (break even) if you get stopped out. Most of the time you will, like 8-10 times, HOWEVER the other two you will see that you can easily hang on for a good $$ amount day trading. How much, that all depends on the instrument you are trading. Again there will be another "gazillion" "traders" that will tell you the 2-1 approach sucks...and that is because they enter on the wrong time. When I enter my initial objective (covering cost) is 8-10 times. I get stopped out a lot, but do well on the other one or two. It is that 1-2 trade that does not look back and I am on it. If you are having difficulties in finding a method to trade, PM
I am in an unusually direct mood this evening Sir so what I am about to say is not meant to be mean â but it will sound that way So with all due respect to you Sir 1.) You donât know anything â if you did - you would do it â you would live it â it would be the very essence of who you are as a trader 2.)You lack clear / concise vision with respect to your trading Sir â Trading is only about making money â period⦠Everything else we do, think, or know â should support that â period 3.) You are also conflicted â on one hand you say youâre looking for "encouragement" (1st sentenance) but in the next sentence you say you are âvery committedâ FWIW Sir â My advice â Step back and reassess everything (reaffirm you are committed) Write a trading plan (to give you clear direction) Use a journal and figure out what you really know - and to help you conquer your demons I have fought a butt load of my own demons and won â so now I am who I am, I know what I know I trade the way I trade I trade to make money Figure out the differences between your stance and mine Sir â only then you will have figured out your hurtles and conquered your demons Good Luck Redneck
If you cannot clearly define your edge, you don't have one. Don't trade if you don't have an edge. As a previous post stated, write a business plan and find a system, backtest it, try it out small, after a large enough sample of small trades slowly size up. Your whole problem is solved with a trading system. You should read up on probability and randomness.
Have you actually had a serious conversation with a gambler who ends up losing his entire fortune and then some? He (or she) usually starts out small. But as the losses start to amount, his frustration urges him to make stupid choices. Instead of simply walking away from the table, his already screwed up head tells him to bet all-in. His rationale is that if he wins, he will get his money back. Of course, he never thinks about the other outcome and he walks out of the casino a poorer man. But don't worry, it's never long before he shows up again, usually the following week, to seek his revenge only to lose it all yet again. Now, here's a trait of a professional big-time gambler. He is one who is constantly evolving, adapting, and changing as circumstances dictate. Even while evaluating opportunities, he also weighs risks and rewards because he knows that even the best gambler will have a losing day. Sometimes a string of losing days. Although he's self-confident, he's disciplined enough to know when to quit. He allows the environment control him and not vice versa. Winning is not always a score. Likewise, losing is not always a defeat. It's HOW you win or lose that matters. You might have scored a few bucks. But is that attributed to true skill or a mere dumb luck? If you made a horrible entry but somehow made a small fortune, there's nothing to be proud about. Well, unless you're a noob who can't differentiate between the two. Even if you end up losing money, had you lost properly in a controlled manner it should be seen in a positive light. Remember, just as not all gamblers were created equal not all traders are the same. In whose shoe would you like to mold your own image? You obviously lack discipline (as well some basic premises of trading such as money and risk management). Until these issue are resolved, success will be hard to come by.
I'll share my story since I'm finally feeling better about my trading. I've been trading for over 5 and a half years now. I was always consistent, no big drawdowns. No stress. But then at the beginning of last year, I started making great money, taking more risk. Generally entering with 5k positions. Then I did horribly from May til January of this year. I had two months where I lost $20k. I trade with emotions, I revenge trade, I hold trades because of denial that I was wrong, I trade twice as big today to make up for the loss of yesterday. I tried everything-taking breaks, writing trading plans, exercising, anything I thought would get my focus back. Yet, I'd be good for 2 hours and the 10 minutes ruins my whole day/week/month. About a month ago, my account was low from me taking money out and I had a bad day. Bad enough that I broke my keyboard over my knee (which feels great by the way). I called my mentor, told him I quit and I couldn't do it anymore and started applying for jobs (which I'm not qualified for anything because I've been daytrading for 5 and a half years). I was pretty broken. Trading can do that and at any stage of the game. The next day, my mentor called me and we talked through a plan. Just saying, I'm going to try harder this time isn't going to break bad habits. You have to make real, tangible changes. For me, it was putting in a daily stop out, which I put really tight at first. I also looked at my trading and saw that most of my biggest losers were in the earnings stocks of the day (so where my biggest winners which is while it took me so long to give them up). Assent has a feature where you can put in a not tradable list, so I took away that temptation of quick riches and excitement every day. I also cut out making basket trades across an entire sector. I put my shares way down. I've been trading 500 share lot max per position for the past month and am just about to raise it up slowly, but if I have a losing day where I lose my head, I will lower my shares because you need AT LEAST one day to get your head right. You also have to be accountable. Writing a journal did nothing for me personally, if I trade poorly, I need to feel that shame by telling someone else about it. I think it really helps to have someone to talk things through, whether it be another trader, a wife, or posting on this message board. In the end, I'm back on track. If you know trading like you say, you should always be able to make money. I've had 17 out of 18 green days since I made the change and am back to paying my portion of the bills. They say it takes a month to create new habits. If you know what kind of trades you lose big money in, just get them off your screen. Its not worth the stress even if you make money in them a good percent of the time. I can say that once you start good trading habits, they are just as addictive as bad trading can be. Right now I'd rather make just $300 trading well with no stress than making $500 and going through the wringer every day. I sleep a lot better Stick with it, trading isn't that hard, you just have to find what makes you money and just stick to that for a while. Get it under control now, you can conquer the world later.