Lots of great ideas here. I agree with a lot said. A big development for me was learning how to review properly, examine my system, psychology and implementation of that system. You are learning both at the screen and staring at your statement. 1) Know your system Track all the statistics your prop report tells you, or you are ignoring your report card, and your homework assignments. Everyone will tell you to be process-driven not results-driven and the difference will start to show in these numbers first before your P&L. The numbers don't lie about your trader profile, and are invaluable to isolating your issues. Is your W/L under 2? You are not lettin em run my man. 2) Know your psychology Understand your individual makeup, what suits you, and what mistakes you are given to. Don't repeat the mistakes. You'll have to keep track of the ones you're making, and try to understand what keep making that happen. Remember, losses aren't just a business expense to a Trader, they are a very real learning opportunity THAT YOU PAY FOR to develop your system, psychology and sense of the market (especially for the beginning trader). Stopped out according to the program? Good trade. Lesson not learned, history repeating itself? that is wasted money. Here's a list of my possible mistakes that I'm tracking (so I won't repeat them): Holding on to a Loser Adding to a Loser TOO MUCH SIZE Chasing Large Spread Too Volatile for my style (including ETFs) Trading during Announcements Revenge Trading Churning (not doing commission cost/benefit) Trading on P&L MUST Keep Original Stop Trading with 1 HOUR Left - I'm terrible at the close Ignored Gut Should have sold SOME not All Impatient. 1 Min Vision - noise on Charts Poor Entries - Ignoring the range Hit PT and Took None DIDNT Stop at Daily PT Of course I'll still get emotional. And with so many possible I'm still repeating mistakes but now I'm accountable and it's happening less and less. All this is assuming you have a profitable, backtested paper-traded system to begin with, most of your mistakes will be psychological and related to the rules of your system. It's all rules based. This is why computers are so good at doing this, and taking over the exchanges quickly. You gotta be like a computer. I have a sticky note: NO DECISIONS, the flowchart is there and you make no real decisions when in the heat of battle like a computer following the rules (setups that qualify perfectly, where's your stop, you gotta have an exit somewhere - you either stick to the plan or you don't). You want to have the same challenges as the algos, deal with psychogical influence in your calibration and preparations but not in the execution of your game plan. Both algo and discretionary traders have to develop and continually tune their systems, when you are doing that with live money you are taking on added risk and losses. Discretionary traders need to beware and use small size or demo accounts when trying to expand their opportunity set because even if you find a place to backtest it, the standard of software available to the retail community is not as robust. Say you're chart reading. Where do you go to backtest a chart pattern? That's tough, but crude info is out there. Getting a system with an edge is not that hard, but running it like an Iceman and watching yourself get shook out constantly in the beginning is.
You can only force yourself to persist with multiple trades IF you know you are a good trader. If that is the case, you have the confidence to know, that overall, you will come out on top. However, in your case, you seem to have the fear of giving back what you made. That equates to lack of confidence in your trading ability. You have to decide weather this is due to you not being good enough to protect your gains or is your strategy not equipped to prevent your profits from being taken away. You will have to decide this. However, if your gains are consistently positive, get rid of your P/L from you monitor and mind, and concentrate on the trade. It will work out just fine. Good luck my friend
Most of what I trade today is automation but I still try to do discretionary trades. My discretionary trading has always been inconsistent in the past. The most significant barrier I have had and I still have is learning why I am really taking a discretionary trade. Too many discretionary trades for me over the years in hind sight have been spontaneous or impulsive. These trades were later rationalized away after the fact whether they made profits or losses. The reasons for these trades were easy to justify with excuses of what I did or didnââ¬â¢t do or I just blamed the markets. So several years ago I changed and began to write down BEFORE a discretionary swing trade analysis of why I had to take a trade and what my expectations were. I also wrote in my log what I had to do during the trade to manage it. I could now do this since I had the time to write as a retiree. Implementing this BEFORE method was pure hell. I used to love the spontaneity of trading. I found writing BEFORE a trade drove me nuts because I often talked myself out trades when the trade did not seem to exactly match my plan. Then from this I saw the mechanics of my set ups did not follow through the way I had written about. It was an eye opener. So... I was forced to make changes to my plan with this BEFORE method. The rules got more complex or changed. With spontaneous trades I had just trailed the stop; but the BEFORE method revealed that I was not showing consistent results when I trailed the stop. Soââ¬Â¦I switched to fixed targets that changed the way I did trades. It was like being in a revolving door for awhile with changes to set ups and testing them. But a pattern emerged about what does and what does not work. It was ââ¬Åthis is what I planned beforeââ¬Â and ââ¬Åthis is what does and does not work after.ââ¬Â So in these last few years my discretionary swing trading has been mildly consistently profitable. Yes, I have had a lot of bumps along this in the road and have a long way to go. But my conclusion as to why I am moving in the right direction is simple. I now believe that a big part of it is because the BEFORE method now makes me own my trades and forces me to see how I caused the problem; where prior to that the trade was just part of what happen in the market.
when I missed a setup, it seems to trigger me into doing impulsive trading. in one way, my subconcious is condemn myself to let a well thought trade go away, in another way, it seems to me"if I do not take my setup, I end up losing opportunity". so I found sometimes i still made those naive mistakes: broken my rules, did not follow proper trading procedure, jumped into a missed trade(for exaample, I plan to buy support, but it rallied off, obviously it already at the resistance, I jumped in without any thought) those kind of mistakes are very naive, in hindsight. when I made a very naive mistake or broke my rules, it triggers me to do nothing. my subconcious may remind me "oh, do not make naive mistakes again", try to avoid naive mistakes. Do nothing of course creates "misss opportunity", just shit, go back to the first circle. "do nothing" creates "do lot", "do lot" creates "do nothing". sometimes I still traped myself into this cycle. i can see someday i did nothing, someday I did lots of trades. just like weight loss, I want weight loss, so I need diet, but at the mean time, after diet, I feel i want to eat more, so the binge. after the binge, i felt i did something wrong, need punish myself, so the diet, and this time diet harder, then next time binge even more. just holy shit in trading, I still noticed myself to do discretionary trading too. in one time, I trade very small size, but it is a very good trade, so next time, i trade a very large size, but this time I am wrong; so back and forth...
For some reason I remember I saw this one not long ago: http://www.youtube.com/watch?v=k9QXY80OxS0&feature=related
Every time I "improve" a system in this manner, I end up also hurting good trades, to the point where one wonders if the thing has become a Rube Goldberg machine. It is nearly impossible to do correctly. What I have found is that if you have an edge, the best thing to do is instead of cutting trades taken by the simplest core of your system, is to just have a max loss where you turn off for the day. This is the only thing that has been, over the long term, that sort of works. Of course, the real best thing is to have many systems running at once that somehow are able to naturally counteract the weakness of all of them together.
Staying awake in front of the computer screens. I found out that it's hard to make money I am falling asleep behind the wheel.