ADX_Trader: I came from swingtrading stocks from all over the world to intraday trading index futures. At first I thought that I can use my concepts of trading also in the short time frame.. that was a big mistake. My swingtrading strategy was built up on price action and volume and basic technical analysis - support and resistance. I had 23'000 Stocks I scanned every night to try to identify some stocks that are about to make a big move. I did well with that and I was able to trade asian, german, french, Italian, swiss and us markets. In other words out of 10 trades I hat 2 winners with a high return. The first thing in Index trading was to discover that this kind of concept doesn't work for me. So I started to look for certain price patterns (not a systematical approach) with a high probability. The next important thing for me was to set a profit target. And I only allowed very few position not to get liquidated on the profit target. If a certain pattern appeared I only sell half of the position and hold the rest to see further. The profit targets are regularly only 5 to 10 points. On special occasion only 3 points. That was the big improvement in my trading... most of the time I gave back the small winners... which ended in a loss... and this always made me angry and I started to loose control... then I ended up making up to 10 trades per minute because I didn't know what I want. The profit target gives me a more constant good feeling because the most important factor that destroyed my trading was when I had to give back my gains to the market. Now I only give back 2 to 4 points... most of the time and this keeps me much more calm. The negative part is that I sometimes miss a 30 point move because I sell with a 8 point gain. But I can live with that... I tell me that others also have to make money and that my goal in trading is to take a little out of the market.. not all! And besides that loosing something that you have had (profit points) has much more impact on the emotions than see what you have missed. At least for myself. hope that helps...
I remember back in the 90's Anthony Robbins was "hot" with his firewalking stuff as a way to overcome fear....in fact, many corporations sponsored their executives to take the course. http://www.firewalks.com/FWSeminars.html Walk on Hot Coals "Well I lost my shirt in a card game, In which I never had a chance, Well I lost my shirt in a card game, Which I never had a chance. The deck was marked, The game was rigged, You could not tell at a glance. Well I lost my job at the weekend, And I was back out on the streets, Well I lost my job at the weekend, I was back out on the streets, Found a way to get a dollar, But I spent it on the roulette wheel. Walk on hot coals, Sleep on a bed of nails, Walk on thin ice, Skate on razor blades, Got my little girl beside me, No matter what else fails...yea. Well I spent it all down at the racetrack, All the way my horse led the field, Spent it all down at the racetrack, All the way home my horse led the field, But it was a hoax, the mare was doped, A length to win she fell down on her knees. Gonna throw away my lucky penny, My rabbits foot and gypsy ring, Throw away my lucky penny, My rabbits foot and gypsy ring, Not gonna gamble on my baby, On this loosing streak I might not win . Well I walk on hot coals, Sleep on a bed of nails, Walk on thin ice, Skate on razor blades, Got my little girl beside me, No matter what else fails. Well I walk on hot coals, Sleep on a bed of nails, Walk on thin ice, Skate on razor blades, Got my little girl beside me, No matter what else fails." -------------Rory Gallagher-------------
Green is better than Red -- always remember this and you will do just fine. If you find you consistently lose money, you are doing just as good as someone who consistently makes it, so just do everything totally the opposite of how you would normally do it. Trading is all psychological to me. I could never understand when I first started trading stocks a long time ago why I would cut profits quickly and let losses mount. As soon as I convinced myself that losses were profits and profits were losses, I started doing better. I just reversed my mentality and said, "woah, I've got a profit ... maybe it will go back to break-even?!?!?!?!" ... Suddenly I was doing much better. "Oh, I've got a loss!! Cool! Let's grab it now!" aphie
How can you do the opposite of an emotion like fear or greed??? It just doesnt work that way in real life...accepting a loss is something workable...but doing the opposite IMO doesnt work..
ElCubano, Everyone has a different strategy on how to conquer their worst fears and inhibitions. Sometimes when I get really worried about something (i.e. date, job interview, trading, etc), I constantly have to remind myself, "hey, it's only life -- don't get too stressed out about it." I went on a lot of "holy grail" quests when I first got serious about the markets. I would try and find out what "magic system" would be impervious to loss and reap huge profits. It took me until around 23 until I realized that there is a "holy grail" afterall, but no individual will find it in a chat room or message board. The amount of time someone spends "looking" for a system is a waste until that person realizes that the only system worth using is the one that YOU develop yourself given all your unique parameters as a human being. The markets are *NOT* evil or mean -- they are actually very forgiving of a bad entry. Take a look at any chart and look at the noise in trading and you will see that a random entry can usually be profitable at some point within a minimum stop-loss range. The reason markets become hard is because a person's pyschology will force them to constantly switch and bail, pull-out when they should stick it through, etc. I also remember starting with all these indicators, advanced analysis and yada yada ... I am now down to volume, price and a moving average -- and multiple time-frames (which is the most important piece of TA you can use). Soon I will dive into the ES futures and tear this ATM machine apart and milk it for everything I can ... and you can, too. aphie
Conquering your fear and doing the opposite are two different things...I agree with most of your post; but doing the opposite is not the answer...how do you know what the opposite is??? going long instead of short isnt the opposite...there is still the countless ways you can exit....that is what I am saying...
I found the following book to be very helpful with my personal trading psychology: "The Inner Game of Trading" by Robert Koppel Good luck.
ADX_Trader, you might be trading a style that is incompatible with your personality. Write down a list of your strengths and weaknesses as a trader and see if they are compatible with the trading style you are trying to implement. How can you change your trading rules to still be profitable, but also be more aligned with your trading personality? The way I figure it, there are two ways to go about it. Either alter your style to fit your personality, or alter your personality to fit your style. Ideally you would probably want to do a little of both and meet halfway. In my experience, it is easier to alter the system. Most people tweak their system to make the most money, when they should be tweaking it to fit their personality. EDIT: I realize this is a semi-tangent. I think your fear of loss definitely needs to be overcome, but I also think the above advice would be helpful once you do that.