When you Hot, your Hot...

Discussion in 'Trading' started by Nicodemus, Oct 24, 2001.

  1. And when your not, your not. I have noticed that almost every time I have an exceptional day, the following day stinks. I know it can't be the market, so there must be a psychological root to it. Does anybody else have this problem? Has anybody had it and cured it?
  2. Nope. I do very well just about every day. But my IQ is exceptional.
  3. volume has a lot to do with trading its easy to make money on heavy volume days then when the volume dies out you are looking for follow trough that is not there
  4. My biggest losses almost always occur after a great win streak. I've read this in numerous other places, including the market wizards books. I know for me it's because I become overconfident and put on too large a position size.

    A tenet of good trading is to increase your position size when you're winning. So it's obviously important to lick this problem. I think just being vigilant about your rules, especially when you're winning, is crucial. Maybe writing them out and reviewing them every morning.
  5. I'd have to agree with Lescor on this . One difficult thing to do is start everyday fresh and seperate from the last.

    When I'm hot sometimes I think I can make trades happen, but nobody can do that....you gotta let the trades come to you.

    Easier said than done.
  6. Hey Nicodemus, I don't know if you had read the above mentioned book, but it is a must read (at least 4 times per year, lol) for all traders. I recall the interview with Marty Schwartz, he said that his greatest problem was his big losing streaks were immediately followed by big winning streaks. He mentioned some tips on what he has tried to solve this problem.
    Good Luck
  7. I meant to say that his biggest winning streaks were immediately followed by his biggest losing streaks..sorry LOL:) :) :)
  8. I agree completely. My equity curve looks the same in every time frame. I have a good streak of 5 weeks or so of solid wins, then i start taking larger positions, my profits zoom up and i do amazing, then i start to trade poorly, and i have period of 2 weeks where i basically break even, but with huge up and huge down days and lots of account volatility, then i have one final unreal trade that makes like 20% for my account, after that, I usually don't have a winning day for like 2 weeks, and I loose about 2/3 of what I made on that one great day before I start trading rationally again.
  9. when i was a kid playing video games.. i used to play and play until i would achieve a really great score.. then, the next time i played.. if anything went wrong i would immediately hit reset.. because if i couldnt beat my last score, the game didnt interest me.. so, instead of playing the game because it was fun, i was playing because i wanted a high score.. i became careless and would eventually quit trying to beat my old score and move on to another game.. then, a few weeks later.. i would play the game again and immediately be able to perform well.. the game was fun again..

    as a trader ive watched myself go through this same cycle.. someone once said that a trader should trade to trade well, not to make money.. its like trying to interest a crack addict in the intrinsic value of work, rather than just the next rock that it provides..

    in my opinion of traders that ive met.. most fall into two categories.. either they are in recovery/rehab or they are in denial.. because it only takes one drink of ambitious recklessness to send us on a binge that could wipe out a weeks or months profits.. what is it that they say in AA..? one day (without alcohol) at a time.. and thats how i am trying to discipline myself to trade.. one disciplined trade at a time.. im not there yet, but im going longer and longer between self-destruct phases.. hopefully one day soon, ill get it right..

  10. gordo



    That's a good analogy. Elder makes a point similar to that in "Trading for A Living." I've found out the hard way in my trading that if I start to focus on the money, I begin to make indulge in self sabatoging behavior. My best trading occurs when I simply focus on making good trades, or trading well. I 've also had to train myself to listen to that innervoice that tells me to stop when I find that I hit the enter order too many times with negative results, ( that's often when I'm chasing the market). Then I get to the sidelines and reassess. Same with if I've had a good winning streak, I'm often not as objective about the markets and need a breather.
    #10     Oct 26, 2001