Personal trading weaknesses and how to cure them ?

[alanb41252]

I have been trading for some time now and with help from various sources ( including a 2 day 121 session with Nas ), I have developed my own methodology / system which seems to work a good percentage of the time. My system is unique to me and I like to think it gives me my own little personal edge.

I have identified my strengths and weaknesses in a trading context and I have concluded without doubt that my greatest weakness by far is my alarming tendency to grab profits before a move is even half over. I do this time and time again despite resolving not to.

I do adopt the method of selling half, moving my stop to entry level and running with the other half. However I never hold on long enough and miss out on the big moves.

I think this is something to do with an obsession to take something off the table every time which is ok - but I always end up kicking myself when the move continues and I miss out. This happens day in, day out and I really want to cure myself of this annoying trait.

If anyone can offer any remedies I would be most grateful.

 

[moneyfool]

I found I suffered the same when monitoring charts in 1 minute periods as I was reacting to the 'noise'. However, things improved if, after taking a position, I used a 5 minute or even 15 minute charts. 1 minute chart for entry, 5 or 15 minute for judging the exit.

Trust this helps.

 

[alanb41252]

I use 5 minute charts to enter. Maybe I will use 15 minute charts to monitor the trade - see if it makes any difference anyway.
I am really p****d off because I am missing out on a pile of money here due to this.

 

[oatman]

You're probably subconsciously afraid of losing, so reducing your opening position may take the pressure off and allow you to be more relaxed.ie you may see the market as points instead of ££$$.

 

[alanb41252]

I'm not really afraid of losing but I hate to give money away.

This is entirely a psychological problem which I need to work on I guess.

Or maybe I just need to work on my exit rules and stick to them rigidly. This works with entry so why not exit ??

 

[Newtron Bomb]

There are no weakness's in trading just lack of knowledge on how to use a particular tool.

The only tool people dont learn how to use is their brain.

Master this and you will be an absolute genius like me.

Happy trading
Newtron Bomb

 

[moneyfool]

Depending on what you are trading, indices or shares, you may want to calculate the average range for the day so you can see the potential range after the market opens. I use the average of the past three days, from the high to low, to give an approx idea of the remaining move for today. This appears to work with indices such as the Dow, I have not tried it with shares.

 

[oatman]

If it's not fear of losing then maybe lack of confidence. You've already said that more often than not the market carries on in your direction after you squared up.
Therefore you must convince yourself that your analysis is correct.

 

[ChartMan]

Ok . Just try this. Reduce your buy quantity in relation the the value of the stock I guess if you have been trained by Naz, then you're trading US stocks at, I guess 1000 lots. Maybe a switch to 500 lots and see if the frighteners are still pulling you out.... Clearly something is making you twitchy in your sub concious..... Is it the $$$ that you may lose? Perhaps bank 2/3 rds and let the rest run.... and move that back to 1/2 later....
I don't think there is a single correct solution. You'll have to try a few ideas and see how you react....

 

[bonsai]

alan,I know you didnt agree with him but oatman may have been right ?
follow the market, not the money.

worth a try surely ?.

then if you can get in the habit, it might stick ?

 

[alanb41252]

Oatman, I think you're near to the mark.

I think it probably is lack of confidence and a refusal to believe that I might just have hit on a winning system.

It does work time and time again and if I wasn't trigger happy with the mouse then I would be making handsome profits almost every day.

Maybe I should do the entry and hand over to my wife - who knows nothing about trading - to complete the exit with rigid instructions.

It might just work.

 

[Newtron Bomb]

I'm not really afraid of losing but I hate to give money away.

This is entirely a psychological problem which I need to work on I guess.

Or maybe I just need to work on my exit rules and stick to them rigidly. This works with entry so why not exit ??

I'll be a bit more constructive.

Try sticking to your strategy rigidly to help with this reduce your lot size.

Fear Greed and hope may be you problem here in one form or another

As oatman said you need to have faith in your own ability

HTH
Newtron Bomb

 

[neil]

I'll be a bit more constructive.

Try sticking to your strategy rigidly to help with this reduce your lot size.

Fear Greed and hope may be you problem here in one form or another

As oatman said you need to have faith in your own ability

HTH
Newtron Bomb

or....save up a bigger investing pot and practice whilst saving.
Thus, subconciously, you have built up a comfort zone where a series of losses will not take you out of the long term game.

 

[alanb41252]

I don't have a problem with the size of trading pot. It's pretty big as it is.

I am just a sore loser and hate to countenance losing at all.

 

[alanb41252]

I am taking up Tai Chi classes. Maybe that will help me to develop some patience.

Failing that a Shrink might help me to curb my money-grabbing attitude !!

 

[BBB]

I agree with all of this. However, I think your dislike of 'handing your money to others', is quite a healthy disposition!

If you take care of the losses, the profits will take care of themselves.

 

[Newtron Bomb]

alanb41252

Form your writings i would say your problem may be fear of a variety of things.

in this case maybe when you have a winning position you are fearful that it will turn into a loss and take whats on on offer breaking your strat rules.

A example of how you could overrule this would be to stop tinkering with your trades. Put in writing what you will do when certain conditions happen
eg when in profit by x reduce stop loss
when in profit by xx move to break even
when in profit by xxx raise your stop profit by a proportional amount.

You can easily set alerts to tell you if your stop loss has been hit or to move your next stop loss/profit level. until then you are not interested in what the market does.set your self time to reassess your analysis then go for a long lunch, play golf switch the monitor off and read a book etc etc.

The above conditions are general and just an example you can easily insert your condition into the equation be it time price chart pattern or set up.

The point is that only you know why you are doing things in a certain way and the reason is you are not asking your self why. I said above that the only tool people dont lean how to use is their mind

Start thinking for yourself

stop asking "how do i do this?"

ask yourself "what do i need to do to get the result i want?"

see beyond the problem

Happy trading
Newtron Bomb

 

[alanb41252]

Thanks for all the very helpful replies - and yes Newtron Bomb I agree with your views and analysis. I need to think about this some more.

 

[sidinuk]

The way I cope is by comparing my actual results at the end of the day to the results my system theoretically produced for that day. My objective is to get as close to the theoretical result as possible with my actual trading.

You say you have a system that works in the long run so the individual losing trades are all part of that system. If your theoretical system loses $500 in one particular day and your actual trading result is a lose of $500 then congratulate yourself you matched your own system results,. If on another day your actual trading makes $2000 but when you check your system results you find it made $3000 then kick yourself because you failed on that day and actually lost $1000, even though you made money. Find out why you didn't match the system results and don't do that again!

Look at the variances between actual and theory that way you shouldn't be concentrating on the absolute levels, just the differences. Hopefully in the end those differences will just be a bit of slippage.

So basically just try to get your actual results as close as possible to your system results. It's surprising how good you feel when you can trade exactly to plan even though it might produce a loser!

 

[alanb41252]

Sidinuk thanks.
Your approach makes a lot of sense