Ready, Set, Cancel,

[eldad 10]

Hi

 

Did you ever prepared a trade everything was ready and then a minute or so before you place your order something happen and you cancel the trade, how did you feel? Did you ever notice any pattern that rise afterwards?

 

Today I had a trade ready , I got the setup and I was ready to pull the trigger but then the stock paused and didn’t went lower, so I couldn’t take the trade (according to my system) and stayed watching the stock and now what?

 

So I took the trade anyway even though it didn’t fit my plan and I got stop and I am always grateful to be stopped when I divert from my plan, this is the safest way to remember to stick to one plan,

 

I am reading now days “The power of Habit: why we do what we do in life and business” the main idea there is that habits have a very specific routine you may say, First you get a cue something that rise the urge of the habit , then you will perform the habit, and last the rewards you get from the habit, today with the light of this understanding I saw in a new way this repeating problem of canceling a trade, you need to understand even if most of the time I won’t take a trade against my system most chances latter on I will take a trade that I shouldn’t,

 

So what really happen? Well I got ready for a trade the body the mind was full of tension, like an animal getting ready to attack it's prey but hey Houston we got a problem and we need to cancel but the habit of a trade give an adrenaline rush you got excited by the trade, you are in a position you feel it so the Reward is pure emotional and you didn't get!!!

 

So like any junkie without being aware of it you are seeking your reward you doing everything you can to get your adrenaline fix, so you run into B- or worse trades, you don’t respect yours system or worse you get so frustrated with yourself or with the trading system for all day long, just because you didn't get your reward, now if you are competitive person, most chance you are if you are in this field, you can’t just accept it.

 

What to do? I have a rule that if I placed orders and the stock left without me I will close the system for 5 minutes and will ask was it my fault or normal play, what I can take to the next trade, but I never understood that my mind was preparing for excitement and he will still look for it,

 

In the book the way he teach how to break a habit is by creating a different action where the unwanted action was, what kind of action I need to place in order to break the chain of bad decisions and search for thrill instead of solid work, I am still without an answer, I will look for one but for start I will rise it so I will be fully aware of the search and I will take 5 minutes to see a part of a standup show , I believe smiling and relaxing might just do the work,

 

Wish you all the best,

 

Make the odds in your favor DayTrad.

 

Eldad Nahmany

[jpennybags 11]

"The Power of Habit" is an interesting read... for what my opinion is worth....

 

I think though, that you are spending too much time in questioning. A quote from the book concerning Tony Dungy and athlete's:

 

“Champions don’t do extraordinary things,” Tony Dungy would explain. “They do ordinary things, but they do them without thinking, too fast for the other team to react. They follow the habits they’ve learned.”

 

Mr. Dungy goes on to explain his struggles in getting his team to believe and not question the method that he was trying to teach. They went through a good deal of frustration during the season, until the players started to believe in the concept. Once they stopped questioning, they started taking effective action that placed them in the right place at the right time to make the plays that needed to be.

 

This to me was one of the more powerful chapters in the book as it pertains to trading.

[MightyMouse 12]

Hi

 

Today I had a trade ready , I got the setup and I was ready to pull the trigger but then the stock paused and didn’t went lower, so I couldn’t take the trade (according to my system) and stayed watching the stock and now what?

 

What to do? I have a rule that if I placed orders and the stock left without me I will close the system for 5 minutes and will ask was it my fault or normal play, what I can take to the next trade, but I never understood that my mind was preparing for excitement and he will still look for it,

 

 

Eldad Nahmany

 

First: what ever happens in the market is never your fault. What happens to your account is always your fault.

 

Second: instead of trying to figure out and fix your brain, you may want to change your entry method so that you are always in the stock when it is going in the right direction. I do not know exactly how you are trying to enter a trade, but it seems to me like you might be trying to enter using surgically precise entries, and missing out on a lot of trades that could have made you money if your order were not as low. If you change the entry method of your system, you will have to take more losses. More losses does not mean bigger losses. Big losses translate into being afraid to be wrong. Trading is not about being right or wrong. It is only about making money. If you can still make money at the end of the day week month, etc, does it matter if the loss rate is higher?

[eldad 10]

Hi,

 

MightMouse: you are absolutely right, i do have a problem with my entries, i switched to a pure mechanical system so i can practice it and i can test it and above all check if it was emotional trade or not, this leaves me out of trades and this in turn leaves me frustrated most of the time, i am still looking for the middle ground between pure mechanic and discretionary trades, i will check if i am just too afraid to except loss might be , thanks

 

Pennybags: this is what i am trying to do in my mechanical system to do without thinking, the problem in trading that you can't shut down your brain while you still wait for a new trade so I do think and emotions rise, thanks

[jpennybags 11]

eldad...

 

During a week of trading (30 to 40 trades) I may only see 4 to 5 perfect entries. By "perfect" I mean the entries that I wanted. Often times I must wait for a 2nd entry to develop. If the reasons for the 1st entry are still intact, then the 2nd entry often provides an even better read on the current price action. The momentum behind the first move is a strong indicator of what is to follow, and because of this, the 2nd entry is often the least risky of the two; the market has tipped it's hand (so to speak).

 

During this time I'm not just waiting for a 2nd entry, I'm assessing the move, and forming new "what / if" scenarios. My emotional / mental intensity remains high... I don't shut things down just because I've missed the entry that I wanted.

 

I would not suppose that I could offer up any advice to you, without watching you trade, and understanding what you are trying to accomplish. Just understand that "perfect" entries are rare, and what is more common in trading is the need to deal with the "not so perfect".

 

edit: In reading through your posts, and in reading between the lines, it seems there is some advice that I would offer you. What I would express to you, is that you need to learn to think more constructively. Fear and emotions will always be with you...to try to suppress emotions is a losing cause. Suppression often leads to an even greater awareness of the emotion that you are trying to control. What it requires is a change in mental focus. There is a book authored by Gary Dayton: "Trade Mindfully: Achieve Your Optimum Trading Performance with Mindfulness and Cutting Edge Psychology".

 

I've become a convert over the years to eastern psychology... take it for what it's worth, but it has helped me in adjusting my thought process. I think it's a good thing, and worth the effort to understand.

Edited October 27, 2015 by jpennybags

[engulf 10]

I have always felt that it gets down to "do I trust my trade plan, or not" I strive to take me and my emotions out of the trade. The more I have been able to pull that off, the more successful I have been.