survival

Discussion in 'Psychology' started by Lady Trader, Aug 13, 2008.

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  1. hi all..
    this is my first thread n m not yet acquainted with the site but i'll b highly obliged if i get some responses..
    So here goes...
    I've been trading for a prop firm for the past 2 yrs n 2 months and as expected i've been through a rough ride...
    Though in this short journey of discovering myself as a trader i did make a bit of money... i was the talk of my entire firm n had consistently made money from aug'o7 to jun'08 (with my fair share of slumps in between)
    but recently i m just not making money as in i m constantly taking losses...
    I've started doubting myself as a trader because i m making quite a few mistakes regularly...
    I mean i know we need to keep our stop loss intact and i cannot fidget with that one Golden Rule but something just goes buzzz or blank inside me when i m unable to hit my stoploss the first time... If i dont hit it the first time i normally book my loss only when its too late.
    I m primarily an intra day trader but my strategy gives me high profits and high losses...
    but i would be much much better off without those big losses...
    I know its lack of discipline and believe me i want ti change it I hate myself for being weak but i still just keep repeating it...
    Now I've come to a point whr my survival in the firm is at stake...
    Any advice is most welcome...
     
  2. Hi, Lady. Welcome to the site.

    We've all been through slumps. Without knowledge of your methodology, it's hard to troubleshoot the issues precisely, but here's what I do to recover:

    When I'm in a slump the first thing I do is pare down my lot sizes. No more 2,000+ share lots! I'll reduce my trades to 200 - 700 shares until I:

    a) figure out what I was doing wrong, or

    b) regain my consistency.

    You'll make less money for awhile, however you'll avoid getting crushed when you're wrong. I'll also stop trading the high priced, wide spread 'crazies' for awhile and return to cheaper, thicker stocks.

    It also helps to take a day or two off, go to the beach, relax and start fresh with a new perspective.

    This is what works for me. Speedy recovery. ;-)

    -Prof.
     
  3. thanks so much prof...
    thats what i have done... reduced my clip to 1...i trade eurodollar futures so cant b selective in shares but ya m trying to play safe n defensive
    but u know how it is in prop firms...leaves r also an issue...
    thanks a lot
     
  4. How to deal with slumps:

    1) Reduce size. If the slump persists, reduce size even more, if necessary going down to 1 lots.

    2) Only take the most high probability setups, your favourite ones that you can rely on the most. Don't take marginal trades.

    3) Place a stop in the market as soon as you have a position on, and leave it there. This avoids the problem of freezing up if you have a mental stop.

    4) If you're unsure on the trade, sell half. If it goes against you more and you are still nervous, sell another half. Your position is then 1/4 of normal size and shouldn't hurt you too much or give you much stress.

    5) Read some good trading books e.g. "Reminiscences of a Stock Operator", "Market Wizards" to get some inspiration and good trading advice.

    6) If you do all this and still find it hard, take a break for a week or two, go on holiday and take your mind off things, then come back recharged.

    Ty Cobb was asked why he never had slumps, he said whenever he felt one coming on, he'd stop going for big hits and just try to make contact with the ball. So just aim your sights lower and try to get some simple consistency, rather than trying too hard for a rapid recovery. Get back to the basics and just concentrate on doing them well.

    All traders have slumps so this is nothing to worry about. The one thing you must not do is revenge trading, doing more size to try to make back your losses. Forget your losses, they are gone now - start afresh, as if you were just beginning.
     
  5. ammo

    ammo

    sounds like you could use #2 on cuttens post and then take a few small profits,it'll adjust your brain gears back to the winning side
     
  6. ammo

    ammo

    brilliant statement
     
  7. sg20

    sg20

    When you froze up, naturally you are unsure of the market directions, what you can do is to wait until the trend displays some recognizable patterns then you can be sure to enter. The euro is very trendy.
     
  8. Keep a journal as a means to root out self-sabotage.
     
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