Hello... Been trading for 2 years. Lucky at the beginning, dumb afterwards. Sideways for a year and then in August and September 2 (two) big relative losses, one in SNAP on August 10 for $1k , where I got rug pulled and didnt want to accept my stop loss and one in September in NIO. After that I stopped trading live, went back to paper trading. But even there, my discipline is non existent. Overtrading a lot, oversizing a lot, position sizing is flawed. It is not my winners that are causing my problems, but what I do with my losers. And when I see red, I get over aggressive, trading subpar signals, instead of winding down. No clue how and if it is fixable. Paper trading hasnt helped. I dont want to lose my money, but I don't know if this is even achievable. Anyone experienced the same?thanks
Hey, yes, everyone goes through this, with ups and downs. There's two choices : either you give up & leave this craft, or, you overcome those personal discipline issues. Anything in between, will be stained with red color, and looong saaad days. What helped me tho, was a simple conversation with myself (and i keep repeating it, but only because it worked), - ,,Either you stop doing stupid shit & stick to your word, or it's game over. That's it'. It's that simple'' And here's the catch, - those things that once were such a ,,big'' psychological challenges, now, you don't even think about em. It's like, - naaaghh. I know where it leads. Nope. Thanks, but no. It's all about perspective. If you want to win in the long term, eventually you have to realize that it is as important part as the real account. Ok. Here's a very simple challenge for you : (it's paper money after all ) Don't touch the real account, until, you haven't tripled your sim account and the profits has to come at least from 20 different positions and at least from 100 trades. There can be more & i would suggest 5x those numbers, but the lowest bar has been set. A very simple task to meet 2022 with. Ok. 1 AM. Zzz. Good luck.
I solved all these problems. It doesn't take discipline (discipline is hard). I don't have to think about these things anymore. Overtrading Cause: I REALLY WANT TO BE RIGHT BECAUSE I WAS WRONG LAST TIME. Fix: You're not always going to be right. Don't lose too much being wrong. Don't double down on being wrong. Position sizing Cause: You make a great trade and wish you had more on. You oversize the next trade and oops, you're wrong. Fix: Start with a small position and aggressively add as it goes your way When I see red I get overaggressive, trade subpar signals, instead of winding down Cause: You have not yet internalized that sometimes you will be red. Fix: Internalize that you will sometimes be red Every trade looks like this (for me) Every trade sort of looks like this for me: - Signal - Entry + Stop + Target - Some period of time where it isn't clear whether it's going to hit the stop or the target first - It becomes clear whether it's going to hit the stop or target - If it becomes clear it's going to hit the target, add aggressively on pullbacks - If it hits a stop, well I risked a very small amount relative to my wins so I don't really care - It is possible that I add and it hits the stop. Doesn't happen often enough for it to be a problem. Maybe 1 out of 10 stop outs if that. So the numbers work. How to use paper trading to help you I usually trade in two sessions: morning between 8:30-11 am and 2pm-4pm. I start out my day simulating trading random previous opens. When the real open comes around, I just turn off the simulator and I'm already warmed up and my screens look exactly the same. When my first session of trading finishes, I usually go and have lunch. Between the end of lunch and 2pm, I am usually sim trading previous 2-4pm sessions. How paper/sim trading doesn't help If you do not have a strategy that works, paper trading does not help. Paper trading helps to fine tune a strategy, gets you exposure to a variety of conditions you may only see a handful of times a year (can be good, or bad, you need to properly weight these incidences.) What you should (probably) do Since it sounds like you don't have a real strategy and you trade stocks, I suggest you take a look at https://www.reddit.com/r/RealDayTrading/ The main guys there use what they call a "relative strength" approach. Not RSI. What they do is try to find stocks that are strong against SPY (on a bull day) and weak against SPY (on a down day) and day trade those for an expected value of 10-15c at a time. 10 times a day gives you a dollar or so. Why did I write this I don't know, it's probably useless tbh.
Start an Error Log pencil and paper, nothing fancy. Do something dumb? jot down a brief name for that dumb ass move holmes. If you do it again, write it down again. Don't get torqued about it. Yet. Rinse. Repeat. After a week you'll have a menagerie of egregious behavior. Review and get dead serious about tackling the baddest of the bad. One by one you'll get a handle on wtf's goin down besides your account. Get back to money asap. https://www.elitetrader.com/et/thre...solid-trading-plan.340340/page-4#post-5031706
The only time a loss is a personal failing is when you don't follow your plan. If you followed your set-up, entry, stop, position sizing and exit rules, you have made no errors, its just that maybe in 40% of your trades the market will take the less probable direction. We're not in a personal game, its not you against the market, its not your broker against you.
Take next few years discovering what works in trading then make a Trading Plan then back test it till it is acceptable to your personality.
One practical approach is to look at stocks at a higher level. For example, REIT - Industrial is trending up. PLYM, TRNO, PLD, EGP, REXR, DRE, FR are trending up. When a group moves, it's a lot stronger than a single stock moves.