Here is the answer to your problems: 1) Why do I get in trade early? You are thinking more of making money, then how to protect money. AkA Greed. 2) How do I solve this? Think about risk before you think about profits. For example, Lets say you are going to WAR with an army in a castle with a moat. A. Storm the castle yourself and reap all the rewards because you didn't pay for any mercenries. - More profit, More Risk. B. Pay merceneries to storm the castle, Then you waltz in after its stormed, but you have to pay 1/2 to your merceneries, but you lose no men. - Less profit, Less damage to your men. Which would you choose? 3) Continuing the fight inside the castle is much more successful then fighting outside the castle. Traders ask me, Why don't you enter @ $10.00 , you would have profited $5.00 Instead you entered @ $12.50 , you only profited $2.50 The reason is, Once you have conquered your enemy, its smooth sailing, So less risk to enter @ $12.50 , High % of being correct @ $12.50 If you want to conquer your enemy yourself, its a riskier, but you gain more. Low % of being correct @ $10.00 But higher profits. You need to judge if you want to take the heat and take less profit but live another day to make more trades. Or do you want to take the heat, take MAX profits, but have a chance to die that day. Note/Learn/Indicate when the castle has been stormed. Then enter. Never before, If you care about your capital. Risk before profits.
Why can't I stick to my plan? Because of two main reasons, the system is not yet validated and normal psychology reaction. First, if a system was not yet validated how could one can trust or stick to it. Second, nobody want to lose and ridiculously the more one hates to lose one will lose more. One will tempt to do everything to avoid lose including not obey the plan. In order to validate, a system needs to be rigorously tested. A system can be tested using fake money and once it is validated to be profitable in the long run then chances are great to stick to the plan. The rest is the psychology side but this could be automatically improved since having a solid profitable system is already a good start. A system could be tested using realtime data, not past data. You need to get exposure in realtime in order to train your psychology as well and many other reasons for using realtime tick such as to make sure your system is currently working or not working and train your reaction face to realtime environment such as news, etc. Obviously, there's a net advantage using real money to build and test a system since one can achieve both parts at the same time but it's too expensive. For the cost reason, let start to build the first part (system) and the second part (psychology) will come with time. A validated system is a system that will work for the long run. It doesn't matter a system lose on a single trade since you know in the long term that system will win. It's about probability the same way as the 6/49 lottery, the owner (government) doesn't care if lose on a single draw, in the long run they will make big money. Nobody can build a system that will win every single trade. If one attempt to do so then one will come back to the initial state which is at the question mentioned above.
============== Cicsman Didnt get much out of Mark Douglas either ; Dr.VanTharp is more helpful. Sounds like your plan needs some more research; if you knew the probabilities wre against you ''early'', you wouldnt do it. Dont have an ''early'' personality either , some do profitably; personality does factor in for sure, as thunderdog hinted. Still like to post market probabilities/trend; even though if had shorted early [with weekly down trend , which was down early today,] probably would have gotten slaughtered. Also figured quick polar bears made some money today; it can be hard ,but fun business, well researched plan helps more. Even when not executed as well as we would prefer, still ; The plans of the diligent-,,,,,Solomon, trader king
It seems the possibility that you do not have faith in your plan (so you override it) has been done almost to death. I think that this could be one reason but it wasn't mine. Mine was poor impulse control and I would take "better" trades than the plan offered - I still do sometimes. You could look at Brett Steenbarger's site and try to use some of the articles to help http://www.brettsteenbarger.com/articles.htm or you may find that a simple tactic like forcing yourself to write out the: - current context - trade trigger - entry point - exit strategies before you can enter the trade (and use something like bracket trader to do stoplimit entries if needed so u dont have to watch the gap close or not close) or place that essential stop order after you fill. I mean right before ... not half an hour before
Don't know if Mark Douglas' Trading in the Zone has been brought up. But this book helped me change my thinking about trading and really did help me, might be an option if not already explored.
Just wondering why everyone keeps mentioning Douglas' Trading in the Zone. I found it EXTREMELY trite, repetitive, and basically, a total bore and of very little value if one is looking for a concrete perspective on anything. His book, The Disciplined Trader, on the other hand is what got me passionate about trading.
I parsed my comments in color below. Trader666, you will place all of the above in this post and attachment into the same place you have put a lot of stuff from a lot of people. Feel free to continue along your path. Obviously what I post is not for you in any way. You are doing drills are being who you are. You will succeeed in your goals. I am a different kind of person than you are and you have as a primary effort, and first of all, to salm my comments, so your thing. My primary goal is to pass on to others what was given to me and to do it in a manner that was impressed upon me as I accepted what was given to me. Don't worry about not understanding anything I post. I retreived this to get the attachment to stick but it is apparently not possible. See next post.
More often than not... Discipline problems are related to something occurring in our personal lives and has nothing to do with trading itself. If you try all the trading related suggestions and the problem still persist... You may want to spend more time analyzing to determine what in your personal life is causing you trading problems (self sabotage) and then resolve it or start fixing the problem prior to putting on the next trade. Mark (a.k.a. NihabaAshi) Japanese Candlestick term