Why plans don't work

Discussion in 'Psychology' started by ttrader, Jul 23, 2003.

  1. gnome

    gnome

    If you now doubt it will work, it's because it has been breakng down recently? Maybe your concept of the plan was flawed all along.

    To be successful, you must do ONLY 2 things:
    A. Take risks that have a favorable probability of outcome.
    B. Exercise stop discipline.

    For (A), you'll need some mentoring or experience so that you know why you should be betting on "xyz setup". (Are the setups you're using now have a high probability of working out, or 50-50. Do you KNOW, and if so, how do you know?) For (B), you must force yourself to cut off losers. Too many mistakes here and you're a gonner.

    Example: Let's say, your trigger is "3-5 upside cross" and your stop is "2 tics below the last bar low", or "2 ticks below the last swing low", or "2 points", or "2%"... whatever you want. Over time you will learn how to define setups which are worth risking capital upon. And NOBODY is good enough to get away with not using stops.

    Accept that no matter how disciplined you are, it's still possible to wipe out. (I like to think that only really bad luck would get me. If I'm going down, I want it to be like being nibbled to death by ducks.) So, be diligent about understanding the setups you take.

    That's it. Pick your setups, and always use a stop.
     
    #11     Jul 24, 2003
  2. ttrader

    ttrader


    Alternatively, You can also do ONLY 2 things:

    A. Take risks that hae a favourable probability of outcome.
    B. Don't take loosers, that is do time management. Wait till step
    (A) is possible.


    ttrader
     
    #12     Jul 24, 2003
  3. I'd feel comfortable enough to start trading with real money after 200 paper trades.
     
    #13     Jul 24, 2003
  4. Doubt is a problem that most traders suffer from, even when they have something good. Every trade, - will it work this time?

    That is what effects the perfect execution and causes one to screw up the plan no matter how good the plan is. Trying to edit out the losers and only take the winners is one of the biggest problems. It's hard psychologically to take a loser, and then another and another and go through the plan's draw down before getting to the winners again.

    Confidence is fickle.:)

    Best

    Natalie
     
    #14     Jul 24, 2003
  5. RAMOUTAR

    RAMOUTAR

    Success with a plan is a tangible reality.

    Doubt that it will no longer work is an intangible and unproven belief.

    Bet on the tangible reality.
     
    #15     Jul 24, 2003
  6. ttrader

    ttrader

    What the f... is a 'tangible reality ?'


    ttrader
     
    #16     Jul 25, 2003
  7. sempai

    sempai

    it's a reality you can feel, man :cool:
     
    #17     Jul 25, 2003
  8. Plans don't work because people don't make them work.

    People who do make the plans work are rare and priceless...

    Best

    Natalie
     
    #18     Jul 25, 2003
  9. Oh, thank you ...
     
    #19     Jul 25, 2003
  10. huangks

    huangks

    have a plan for the time you doubt your plan :D
     
    #20     Jul 25, 2003