Trading plan - self psychology

[james_gsx 16]

So I have been writing my trading plan for a while now, basically going over all of my strategies and exactly how I play them and my few exceptions. I was almost finished and about to type it all up when I realized I was missing something I think could be very important, my own self psychology.

 

For the last few days I have basically been staring at a blank piece of paper with a title at the top that says Trading Plan - Psychology. I can't seem to get it started, and I don't know how to start. I finally just started writing down some of my emotions that I have noticed before in different trades. For example I always feel uneasy with a quick scalp trade, yet in a pivot or gap play I am very calm.

 

But other than that, I'm not really sure what to put down here. I'm hoping some of you guys could help guide me and add some suggestions. I was thinking maybe I could write down some emotional rules, for example the other day my best friends dad died and I took the rest of the day off because of it.I knew I would make bad decisions. But what are some other things I could look at?

 

Thanks a lot.

[wrbtrader 10]

  james_gsx said:

So I have been writing my trading plan for a while now, basically going over all of my strategies and exactly how I play them and my few exceptions. I was almost finished and about to type it all up when I realized I was missing something I think could be very important, my own self psychology.

 

For the last few days I have basically been staring at a blank piece of paper with a title at the top that says Trading Plan - Psychology. I can't seem to get it started, and I don't know how to start. I finally just started writing down some of my emotions that I have noticed before in different trades. For example I always feel uneasy with a quick scalp trade, yet in a pivot or gap play I am very calm.

 

But other than that, I'm not really sure what to put down here. I'm hoping some of you guys could help guide me and add some suggestions. I was thinking maybe I could write down some emotional rules, for example the other day my best friends dad died and I took the rest of the day off because of it.I knew I would make bad decisions. But what are some other things I could look at?

 

Thanks a lot.

 

The trader psychology aspect of my trading plan involves a software called Camtasia Studio.

 

http://www.techsmith.com

 

I record (screen video and audio) my trading day from entry to exit, from the first time I log on to when I log off.

 

This documents every day how I interacted with the markets and how other things in my life impacted my trading.

 

With that critical information, I can easily see things that have impact on my trading results that have absolutely nothing to do with my pattern signals.

 

For example, yesterday I traded with fear the entire trading day because I was having major ISP problems (their doing upgrades to their system).

 

Playing back my recording I can hear the frustration in my voice, anger and see that after I logged on to my system, I spent so much time trying to find a work around solution that my mouse movements on my screen shows that I wasn't prepared to trade when the market open.

 

My point, we all act differently to particular situations, Further, our reactions or interactions with the markets and our trading environment (at home or office) will repeat itself.

 

Thus, the best trading plan involving the psychological aspects of trading really can not be developed until after several problematic situations and if we don't document these problems...

 

It's too difficult to see how our personalities (who we are as a person) interacts with the markets.

 

Note: Make sure you have a powerful enough system to use Camtasia because their system requirements do not take into account that traders will be using it to record things like realtime graphs, broker platform, spreadsheets et cetera.

 

Also, I have no affiliation with Techsmith and I'm just a happy user of their program.

 

Mark

(a.k.a. NihabaAshi) Japanese Candlestick term

[brownsfan019 17]

I agree with Mark - Camtasia and/or SnagIt are great tools for your trading business. Using Camtasia as Mark does is a great idea and I use SnagIt to capture chart images and annotate them. You could then add those annotated charts into your Camtasia recording later if you wanted as well.

 

SnagIt: http://www.techsmith.com/snagit.asp

Camtasia: http://www.techsmith.com/camtasia.asp

 

Note - if you purchase both at the same time, you can save some money - http://www.techsmith.com/purchase/default.asp

 

** I also have no affiliation with techsmith, just a very happy user as well **

[torero 10]

Adding to the above, I occasionally use a webcam to record and watch myself for any cues of behavior changes that may reflect my mental and emotional state (a mirror is good too but having a view of yourself on screen keeps IN YOUR FACE). It helped me catch occasional habits that showed signs of distraction or nervousness. Hope that helps. Writing emotional stuff might be not enough, you need more visual and audio cues to point them out.

 

One other thing I use that became very effective problems of taking profits or getting out too early is the use of stopwatch or timer, either clock or computer timer (google gadgets). I think we get in a trade and watch and wait, it seems like hours have gone by. When I set the clock with an alarm with an objective to start with 5 mins holding the trade, then move to 6-7-8, etc. until my reality of time is in sync with my mind's concept of time. This is one of the few ideas to merge reality with our perception of reality.

[torero 10]

A quick question to Mark, you leave on audio recording on your video right? Do you talk yourself through the process of prepration and setups? Right now, I only have the audio off but trying to find a more effective way of using audio in it. Thanks.

[darthtrader 10]

wow both those are fantastic ideas. i especially like the Camtasia idea. I could completely see just talking about what your doing in the trade instead of trying to write out a journal entry while the trade is going on.

 

how fast is a fast system to have Camtasia running on?

[james_gsx 16]

Wow guys, thanks a lot. That looks really interesting and I will have to give it a try. Thanks for the input!

[brownsfan019 17]

  darthtradar said:

how fast is a fast system to have Camtasia running on?

 

Minimum requirements: http://www.techsmith.com/camtasia/systemreq.asp

 

Obviously the more the better.

 

You can get a 30 day trial, so test it out and see if your machine can handle it.

 

Could make for a neat TL Members' Video Log Area...

[Guest cooter]

It's also an excellent tool to not only improve your trading discipline, but to document any discrepancies or anomaly that you may need documentation for later on.

[torero 10]

  brownsfan019 said:

Minimum requirements: http://www.techsmith.com/camtasia/systemreq.asp

 

Obviously the more the better.

 

You can get a 30 day trial, so test it out and see if your machine can handle it.

 

Could make for a neat TL Members' Video Log Area...

 

We mentioned this to James before and he mentioned there is little server space since video files are huge.

[Guest cooter]

  torero said:

We mentioned this to James before and he mentioned there is little server space since video files are huge.

 

That's why many sites use "YouTube" or "GoogleVideo" now instead of their own server storage.

 

In addition to saving bandwidth and storage space, you get the added benefit of international exposure on both sites, plus Google as well.

[torero 10]

Excellent idea! It'll be a problem searching for them unless we have to put some TL tags on them so we can easily find them.

[Soultrader 12]

With camstudio, you can save the files as .swf which makes the sizes signficantly smaller. You can then use the attachment to upload it directly or use the megaupload box to store in in a 3rd party server. Obviously storing on our server means it will never disappear.

 

I do encourage traders to take advantage of techsmith products as they are extremely useful for trading. And also, post them here! Recording visually and receiving feedback I think is one of the fastest learning methods. Visual learning by far beats reading.

 

Maybe I will create a seperate file storing feature where members can upload any type of file. This way, traders can post away their videos in their posts.

[wrbtrader 10]

  torero said:

A quick question to Mark, you leave on audio recording on your video right? Do you talk yourself through the process of prepration and setups? Right now, I only have the audio off but trying to find a more effective way of using audio in it. Thanks.

 

Hi torero,

 

Yes, most of the time I leave my audio recording on except for Monday's and Friday's because the kids are not at day care. :rolleyes:

 

As a at home based retail trader with my home office next to the kids play room...I do more typing in a chat room on Monday's and Friday's to compensate for the lack of info due to the audio being turned off.

 

I store all my daily trading recordings (video and audio) on DVD's that go back a few years worth of info.

 

Thus, after one week of recordings that's stored on my computer...I transfer them to DVD to keep.

 

Mark

(a.k.a. NihabaAshi) Japanese Candlestick term

[james_gsx 16]

Today would have been nice for the pit audio. When I saw the huge sell off first take off I was pretty much lost and just had to go with what was on my screen. I really had no idea what was going on, who was selling, any of that. I was pretty much in the dark and I hated it.

[torero 10]

Very interesting Mark. I've only started a few months ago and I can see some improvement, but don't have a clear idea on what to look for when watching the video. Maybe the audio will help tremendously. I assume you self-talk into the mike from start to finish right? Please provide any info as I think this is the right way to improve. Thanks.

[lrushing 10]

Identify each emotion - postivie or negative that will have a dramatic impact on your daily trading activity. Associate with each emotion, a set of action steps you will take and adhere to once the emotion is identified. Combine your emotions and action steps with your trade execution to assist you with developing new habits while eliminating old or bad ones.

 

For example, if you find that after a losing trade or series of bad trades, you get anxious to get back in the market, i.e., revengeful, set a rule to change and reduce your position size to indirectly assist you in risk management and protecting your capital. Another example, might be to pre-determine how much of your profits you are will to continue to risk in the market after reaching a daily target, hence helping address the emotion of "greed".

[walterw 10]

  lrushing said:

Another example, might be to pre-determine how much of your profits you are will to continue to risk in the market after reaching a daily target, hence helping address the emotion of "greed".

 

 

Super topic Irushing... you see we had some discussions here in terms of calling a day after making a daily target.... I persoanlly do so, and normally If I keep trading I will start giving back my gains.... so I normally call the day when I make my daily target...

 

I think greed normally is as bad as fear... so putting a number to my greed has helped me a lot... also when the month finishes its also nice to see all numbers as expected...

 

Irushing : do you use daily targets ? cheers Walter.

[lrushing 10]

For swing trading stratgies, I use 65 minute charts, daily charts, and weekly charts in a multiple timeframe approach.

[walterw 10]

  lrushing said:

For swing trading stratgies, I use 65 minute charts, daily charts, and weekly charts in a multiple timeframe approach.

 

I mean daily $ targets...