Woe is me...

[wasp]

I just don't know how to do it....

Took 4 trades today on various markets, the 2 I closed out at a small profit zoomed away and away. The other 2, which I thought would go well, reversed and ended with small losses.

All 4 were precisely to plan yet whenever I stop a profit becoming a loss, it continues and then vica versa it pulls back to nothing.

The conflicting 'don't let a profit become a loss' and 'let your winners run...' are running just behind 'sods law' at the moment.

Is it just me or am I not alone in this annoying predicament?

 

[Pippppin]

Wasp

It sounds to me as though you got half of your strategy right, and the other half wrong. The two small losses sound fine - the trades did not perform as you expected, and you exited accordingly.

However, regarding the other two trades, it could well be that your FEAR of your two small profitable trades becoming loss making trades led you to exit the market prematurely. If you had let your profits run, and taken your two small losses, you would have had a very profitable day.

You need to devise a strategy for when to exit profitable trades, such that even if your loss making trades outnumber your profitable trades, you are still making money. I agree it is not easy, but there are many strategies which have been documented

 

[wasp]

I do think my problem lies in my fear. I took a great long yesterday morning and watched 50 become 20 pips on cable, then when I shorted, I took 20 after it pulled back some then watched it drop another 40.

I am very strict and my entries are wonderful, I can start the day great but as soon as the first trades go bad, I'm hopeless for the rest of the day.... need to decipher a much better exit strategy I think.

On one hand I don't want to let a winner become a loss, then when I do, I should have let my winners run!

 

[Charlton]

wasp

Took 4 trades today on various markets, the 2 I closed out at a small profit zoomed away and away

How did you close them - manually or with pre-defined stop losses ? You said that you had a good entry strategy, but it seems only good in terms of the general direction of the market. You seem to be entering with no clear indication of where you expect cable to go

I do think my problem lies in my fear. I took a great long yesterday morning and watched 50 become 20 pips on cable, then when I shorted, I took 20 after it pulled back some then watched it drop another 40.

Again it seems that you have not analysed further than the general direction of the pair. I agree with Pippppin in this respect.

Whilst you are working on this, does your broker allow trailing stops on forex ? Ib for example allow it although they do not recommend it.

Charlton

 

[wasp]

wasp

How did you close them - manually or with pre-defined stop losses ? You said that you had a good entry strategy, but it seems only good in terms of the general direction of the market. You seem to be entering with no clear indication of where you expect cable to go

Again it seems that you have not analysed further than the general direction of the pair. I agree with Pippppin in this respect.

Whilst you are working on this, does your broker allow trailing stops on forex ? Ib for example allow it although they do not recommend it.

Charlton

Hi Charlton,

I closed then manually as I didn't wish to see a profit become a loss. As for direction, I only view where I think the market will go by what It does at various pivot and support/resistance levels. I don't like to predict the future, only act on what I see.

I did think cable/euro would go north and the FTSE south but after watching two trades become nothing, I just didn't want to see the same happen again, and instead of allowing the trades to pan out as per plan, I panicked and jumped ship.

Fear is the key I think. I need to learn to detatch myself from my trades and let them produce what they produce. I know now that had I would have had a lovely day if only I'd just applied discipline.

Like IB, I'm not a fan of trailing stops. They would have worked out worse on cable today than my own results.

 

[Charlton]

Thanks for sharing this with us

Wasp

Thank you for your honesty. I'm sure that there are many who will benefit from your sharing of some of the psychological issues traders face.

You have clearly identified the issues logically, but need to conqueur the emotional side. Over the years there have been many discussions on the importance of the emotional aspects of trading. Indeed I have just started a new thread along these lines on the psychology forum, starting with a discussion of personas.and your comment about detachment is an aspect of working with personas.

I sincerely hope that you will be able to successfully work through these issues in the coming weeks.

Charlton

 

[TheBramble]

I closed then manually as I didn't wish to see a profit become a loss.

Don't close them unless they meet your exit pre-defined criteria - either profit target (momentum decline, S/R, Fib move - whatever) or your stop loss: Initial or trailing.

Make your exits as sweet and emotionally detached as your entries.

Just do it for the next 10 trades and blame all the losses on me. See if that helps.

 

[thepoliteone]

Wasp, in Trading In The Zone, the exercise on the last chapter helps teach you how to trade mechanically as it were...hope that might help?

-TPO.

 

[North_Face]

Wasp,

I have 2 things that I tell myself everyday.

1. I do not have to trade today. The market will always be here.
2. Never look back in a wishful manner as it can easily distort current and future judgements.

It has become ingrained in my thought process. Even on days where I have nothing going on with the markets and am away from the computer I still find my conscience repeating this at some point throughout the day.

The first rule is to keep myself from taking marginal trades. Trades that are pretty close to meeting my criteria, but not quite. Also, just to keep me from placing a trade just so I can 'have something on'. There will always be bull markets. There will always be hot stocks that are bring innovative new products to market. There will always be new companies that are begging to blow away earnings that the street does not follow yet.

The second rule is how I keep myself (as best I can) from reacting to the results from previous trades. Whether I got out too early, or not early enough, in my most recent trades has absolutely no bearing on how my current postions are going to act. It does not matter what any one trade does individually. Collectively, they become your account equity curve and that is where you can start to see patterns in order to determine if you are profiting as you should be.

NF

 

[wasp]

Wasp

Thank you for your honesty. I'm sure that there are many who will benefit from your sharing of some of the psychological issues traders face.

You have clearly identified the issues logically, but need to conqueur the emotional side. Over the years there have been many discussions on the importance of the emotional aspects of trading. Indeed I have just started a new thread along these lines on the psychology forum, starting with a discussion of personas.and your comment about detachment is an aspect of working with personas.

I sincerely hope that you will be able to successfully work through these issues in the coming weeks.

Charlton

Don't close them unless they meet your exit pre-defined criteria - either profit target (momentum decline, S/R, Fib move - whatever) or your stop loss: Initial or trailing.

Make your exits as sweet and emotionally detached as your entries.

Just do it for the next 10 trades and blame all the losses on me. See if that helps.

Wasp, in Trading In The Zone, the exercise on the last chapter helps teach you how to trade mechanically as it were...hope that might help?

-TPO.

Wasp,

I have 2 things that I tell myself everyday.

1. I do not have to trade today. The market will always be here.
2. Never look back in a wishful manner as it can easily distort current and future judgements.

It has become ingrained in my thought process. Even on days where I have nothing going on with the markets and am away from the computer I still find my conscience repeating this at some point throughout the day.

The first rule is to keep myself from taking marginal trades. Trades that are pretty close to meeting my criteria, but not quite. Also, just to keep me from placing a trade just so I can 'have something on'. There will always be bull markets. There will always be hot stocks that are bring innovative new products to market. There will always be new companies that are begging to blow away earnings that the street does not follow yet.

The second rule is how I keep myself (as best I can) from reacting to the results from previous trades. Whether I got out too early, or not early enough, in my most recent trades has absolutely no bearing on how my current postions are going to act. It does not matter what any one trade does individually. Collectively, they become your account equity curve and that is where you can start to see patterns in order to determine if you are profiting as you should be.

NF

Thanks everyone,

I'm taking the day off today to take a breather and then over the weekend take a look at me and try to decide the best state of mind to be disciplined.

After the first couple of trades in a day go into profit and reverse to nothing, or I take a profit for no good reason and it continues away it just messes with my head.

I think the best solution is next week I shall trade the plan, only the plan and nothing but the plan so help me... (fill in religious stereotype here)... Win or lose, breakeven or miss out, I know there will be wonderous trades in there that will end up making me profitable at the end of the week. I shall reduce my lot size and just trade the plan precisely, only way I can really be sure if it does work.

If it all goes wrong, yes, its definately all your fault theBramble!

 

[TheBramble]

If it all goes wrong, yes, its definately all your fault theBramble!

Fine. So now you can just relax and trade your plan. An assumption has been made that your plan is a profitable one.

No amount of detached and objective execution is going to turn a bummer into a star!

 

[wasp]

Fine. So now you can just relax and trade your plan. An assumption has been made that your plan is a profitable one.

No amount of detached and objective execution is going to turn a bummer into a star!

I know it is a profitable one as when demo trading it, nil problemo, put money on the line and it goes like a line of sunbathing topless women!

 

[turtle trader]

Hi Wasp

What I found helpful when experiencing similar problems, was to split my trades in 2, setting a profit tgt for the first half and then managing the 2nd half according to my original plan. It has not only sorted out the psychological problems I had (OK maybe not all of them, but definitely some of the trading ones!), but has also improved my profit factor and bottom line.

Once the 1st tgt has been hit, you can almost feel the pressure being taken away - move your stop to b/e on the 2nd half, then put your feet up & watch the trade evolve knowing that the worst case scenario is still a winning trade.

I hope it's of some use

Simon

 

[TheBramble]

I know it is a profitable one as when demo trading it, nil problemo, put money on the line and it goes like a line of sunbathing topless women!

What, brown?

 

[wasp]

tits up.

 

[TheBramble]

What if they're tanning their backs...?

And while on top of this subject...

Have you noticed how trends also manifest themselves with groups of sun-bathers?

 

[wasp]

Hmmm,

Just made 200 pips trading cable and euro on the demo.

2 spot on entries when I woke up. Both pulled back to breakeven-ish after +20 odd then up up and away. Had I been trading real money, I would have taken both at breakeven. After pulling back through the tokyo highs and dropping 10 down from there, that would have given me a signal to exit. Had the figure held, then no exit. That coupled with the combined +50 pips vanishing before my eyes.

In hindsight and whilst in demoing the breaks above the highs and the upper trendline would have said re-enter but, I don't think the confidence would have been there....

Major re-think time....

 

[wasp]

cunning plans arer here again

In order to protect from losses or loss of profits I have been looking at intermediatary S/R levels to place stops behind so I relax. A sort of trailing stop as you will.

This obviously has not been working too well so after looking back a bit (leave the extensive tests for weekend fun!), the only reliable yet still helpful levels seem to be the previous days high and/or low. All the other levels seem to un-reliable.

I'm probably the last to realise all this but hey, can't change the past, only the future!

 

[TheBramble]

I'm taking the day off today to take a breather and then over the weekend take a look at me and try to decide the best state of mind to be disciplined.
..

{my emphasis}

Hmmm,

Just made 200 pips trading cable and euro on the demo.

Erm...I thought you were taking the day off? This isn't discipline wasp - this is a whim of iron....

Bad wasp. Naughty wasp.

 

[wasp]

{my emphasis}



Erm...I thought you were taking the day off? This isn't discipline wasp - this is a whim of iron....

Bad wasp. Naughty wasp.

In my defense honour, it was only demo trading.