Talk the Talk but Not Walk the Walk

[captjoe 10]

My biggest obstacle is being able to follow my trading plan from start to finish. I've obtained quite a bit of knowledge over the years and still profitable but nothing great. I still see much room for improvement. Is there a turning point that my fellow traders go through for example a large draw down? Complete loss of equity in a trading account or maybe a positive change in the way one prepares for their day of trading that has made a difference substantially in their ability to control their emotions and execute their plan.

Thank You in advance for your comments.

:crap:

[evolved trader 10]

welcome to the club, check out the Edge Vs. Mentality thread.

 

You may find some solutions there.

 

Best of luck!

[UKTraderGirl 10]

My biggest obstacle is being able to follow my trading plan from start to finish. I've obtained quite a bit of knowledge over the years and still profitable but nothing great. I still see much room for improvement. Is there a turning point that my fellow traders go through for example a large draw down? Complete loss of equity in a trading account or maybe a positive change in the way one prepares for their day of trading that has made a difference substantially in their ability to control their emotions and execute their plan.

Thank You in advance for your comments.

:crap:

 

 

The trick is in coming to a turning point without having to go through the pain of a huge drawdown or loss of capital entirely. The fact that you are aware and know there are problems is a good start. Don't ignore it- figure out a way to do something about it instead. Drawdowns will happen, sometimes big ones, even if you are following a winning strategy perfectly- so you certainly don't want to increase the odds of this happening even more than they already are.

 

The points you mention really do all boil down to discipline. You have to work really really hard at keeping your finger away from the mouse when it shouldn't be there! If you want to try out other strategies or ways of trading why not open a demo account and have a play around there instead? Stick notes all over your computer "I will only take trades following my exact strategy"- or other messages- do whatever it takes to ensure you stick to your rules.

 

The above is especially important if you are going through a bit of a rough phase with your system. If you can't stick with it in good times, it's going to get even harder in times when it might not be performing quite so well. (incidentally, if the system stops performing so well scale down your trades until the market conditions adapt to suit the system better).

 

"Come into my trading room" by Dr Alexander Elder is a good book which discusses trading psychology in some detail and may help you.

 

Do you document all of your trades? Keep a spreadsheet as well as a diary. Perhaps print out charts of every trade you take, marking on the charts your entries and why you took that trade. "i took the trade because the moving average lines crossed and my system says to enter", or "i took this trade because the chart looked good". Doing this you can see exactly how much of a problem you have on your hands, become acutely aware of it and have a little bit of accountability to yourself for your actions. The problem with trading is that no one sees what we do-- we can have a sneaky trade here and there and no one will notice. Don't do it! Take every trade as though you need to explain yourself to everyone here.

 

Umm.. i'm going on a bit now, i'll stop. Hope this has helped anyway.

[Minis Trader 10]

Great post UKTraderGirl, I agree with where she is going.

 

For me it was keeping excelent detailed records of every trade. I test all of my systems on paper first before ever putting 1 penny of my hard earned money into the trade. I do some testing as backtesting to make sure the strategy has merrit but for the most part I like to do forward testing with either a demo account or a small actual account.

 

I also used camtasia to video my trades and went back and listened to them at the end of the day. Talk about a wake up call, I would be looking over a trade and say "Why did I take this trade, it went against every rule I have". This was a great learning aid.

 

The one thing that was a big one for me was every time I was getting ready to take a trade I would pretend that my mentor was standing behind me watching my every move. He was watching closely every thing I did. So I made sure to ask myself "Would he do this trade". If not I would ask "why" and if so "why". I forced myself to review each detail of rthe trade I wanted to take.

 

The most important thing is to never give up.

[zdo 20]

re "The trick is in coming to a turning point without having to go through the pain of a huge drawdown or loss of capital entirely."

An alternative attitude is "The trick is in coming to a turning point no matter how many times you have to blow up entirely."

Make your mistakes faster and faster. If you are truly embodying total commitment, you can not possibly make them fast enough.

[Head2k 10]

re "The trick is in coming to a turning point without having to go through the pain of a huge drawdown or loss of capital entirely."

An alternative attitude is "The trick is in coming to a turning point no matter how many times you have to blow up entirely."

Make your mistakes faster and faster. If you are truly embodying total commitment, you can not possibly make them fast enough.

Couldn't paper trading serve this purpose to a large extent?

[UKTraderGirl 10]

Couldn't paper trading serve this purpose to a large extent?

 

 

Not really.

 

Nothing is quite like the real thing with trading. No matter how much you imagine it is like real money, when you actually trade with real money the psychology is quite different- and psychology is at least 50% if not more of what trading is about.

 

Paper trading has its place for sure- and i would never recommend jumping in without trying it out first and using it to hone a strategy. You can vastly underestimate the effect that even a small drawdown can have on you. A 10% drawdown most of us feel is not much and we can easily deal with it- experience it for the first time in your live account after having 5 losing trades in a row (very possible with nearly every system) and it certainly effects you differently.

 

Note i'm not saying, go throw thousands into the markets at random! Rather, placing a small amount into a trading account and considering it your 'training' fee is what i'm trying to get at.

[UKTraderGirl 10]

I just re-read some of the previous posts.

 

I want to make it clear i'm not suggesting someone go out and blow up lots of accounts until they make it- and do it fast. My post wasn't in agreement with that.

 

The best things come to those with patience and perseverance. This is not the same as getting through a lot of accounts. It means learning to apply very strict money management so you don't have to blow up lots of times! Risking 2% of an account would take 50 losses in a row to blowup- if you manage to do that i suggest stopping trading and taking a serious look at your strategy- and doing the opposite of the signals it generates!

[SwingTradinJay 10]

I've come near blowing up, it was a great experience.

 

Drawdowns-Try taking 20 to the chin, one after the other.

 

My turning point was a boom and bust period for 6 straight months. I made and lost a lot of money and my blood pressure was soaring. Eventually it led me to my "ah-ha" moment and now after all the struggle, I've found a swing trading method that works.

[rigel 10]

I've come near blowing up, it was a great experience.

 

Drawdowns-Try taking 20 to the chin, one after the other.

 

My turning point was a boom and bust period for 6 straight months. I made and lost a lot of money and my blood pressure was soaring. Eventually it led me to my "ah-ha" moment and now after all the struggle, I've found a swing trading method that works.[/QUOT

 

 

Good for you , have been through that myself, guess most traders have to go through a rough period before the light at the end of the tunnel.

[rigel 10]

Would have thought you require first total confidence in your method and then discipline to stick to the rules of engagement of the method.