Canceling My Success

[evolved trader 10]

Alright guys, need some help here please!

 

I have a block and I was wondering what suggestion you all have to overcoming this. Last week I decided I was going to set a dollar figure target of $400 a day for the next 30 days straight. That’s extremely feasible to do and 95% of the time my edge generates this and more within the first 20 minutes of the day.

 

So now its Thursday, every day up to today I had the same results. I clearly understand and see the market, understand and see my edge, clearly have a detailed plan written out....then place the trade. So I pull the trigger, then within seconds of just about getting a fill...... I cancel the order. I’ve done this 4 days in a row and every trade hits my price target. I’m having a serious unconscious block based out of fear.

 

The good news is that I’m now placing trades comfortably in line with my edge....the bad news is I’m cancelling them before I get filled! Is this just a retarded post because isn’t it as simple as... “Don’t cancel the trade!?”. The strange thing is that sometimes I don’t even remember actually thinking about cancelling the trade after I have already clicked the mouse to cancel it.

 

I’m getting closer guys; I’m happy with my system (edge) and understanding of market behaviour, just need to let the damn trade get filled! :doh:

 

Any suggestions, tips, help, thoughts would be greatly appreciated. Maybe I’m looking for encouragement!

 

Thanks,

Ryan:)

[Head2k 10]

I think it is great that you overcame the first obstacle and you are placing trades in accordance with your plan. That is a great achievement. I can't really help you with the current obstacle, since I am not an experienced trader nor psychologist. Just wanted to congratulate you to your success, that you are getting somewhere.

I think you should be proud that you progress, you overcame the first challange and now you need to focus on the second one. Maybe, for the beginning, you could make such a daily goal, without regard to any monetary gains, just to really execute at least your fist trade in a day. And maybe trade just one contract to ease the pressure.

[brownsfan019 17]

Ryan,

 

We've all been there at some point, but I have a few questions that may help to see if this is an execution issue or a real fear factor:

 

How much are you risking per trade in comparison to your account size?

How much is in the account total?

Can you afford to lose all of it and not have your life change?

What are you trading?

Do you have any backtesting and/or paper trading to support your analysis?

You may see where I am going w/ this, but humor me.

[Bearbull 10]

The root cause is fear of loss, very understandable, for it has been ingrained in us from childhood, it is associated with being wrong, failure etc.

You have confidence in your edge but this subconscious fear of loss is much stronger, no need to get depressed over it, we all started that way, personally I hate to lose. I am sure everybody does and it is the desire not to lose that gets in the way letting the entry order get filled (presume that is what you are talking about).

However if you have determined a logical stop, then your risk is limited to that sum.

 

The only way to overcoming is this repetition - way of desensitizing oneself to the stress

ie. let the trade get filled even if there are consecutive losses.

Very similar to how we have all become desensitized to scary movies, initially Dracula, Omen, Exorcist use to give us nightmares;)

[evolved trader 10]

Head2k

 

Thanks for the support. I do feel that is a huge success in itself. Also, begin able to clearly understand the sector I trade is a major success. I used to place my attention only on the system and not the monetary gains. Possibly a good idea to go back to, thanks!

 

Brownsfan019

 

It’s nice to know I’m not alone. Alright, see where you’re going and you right. The part that stood out for me the most was this....Cancelling the trade because of being afraid to lose money and have to go back to a different lifestyle, job, ect. That’s really the unfounded fear. I’ve been trading full time from home for almost 6 months and the past couple months have been rough, mentally...and now I’m seeing the effects in my account size. This is something I have to overcome to get back on track trading successfully. Everything else is good, sector; back testing, risk control, ect.

Thanks for bringing this up. I suppose it’s as simple as executing the trade and sitting on my hands....

 

Bearbull

 

However if you have determined a logical stop, then your risk is limited to that sum.

 

That is so true. Right now I’m using very minimal leverage and my risk is @ 5%so my actual dollar amount of risk is fairly small. Basically what I’m hearing is to keep placing the trades and let them get filled over and over again. Keep following up with a stop and limit order then let the trade work. Practice this over and over and over again trading live.

 

The funny thing is that almost all the trades I feel fear about placing....are the successful ones. The ones that are comfortable usually end up being losers.

 

Alright, so for Friday I’ll enter the trade on time and follow through with a fill. I’ll let you guys know how it goes and how I felt! Thanks! I needed to hear some positive feedback.

 

Ryan:)

[sdoma 10]

If you are trading your plan and you are OK with the size of the position, take your hands off the mouse. Sit on them if you have to. Set your stop and take profit and let the trade go.

[BlowFish 10]

Can you paper trade pretty flawlessly without feeling extreme emotions?

 

Reason I ask is that of the fears that BB mentions, and the many relatives they have, I think it is often more complex than financial loss. I know it was (and sometimes is) in my case. If you still have execution errors when in sim then it is probably more complex than straightforward financial loss. Having said that it could be worry about future loss and/or failure etc.

 

Identifying and coming to terms with demons is likely to be an ongoing process however in the short term you might be able to force yourself through it. Maybe try Douglas' exercise (can't remember if it is in the 1st or second book).

 

Another thing that occurs to me is to place your order, get straight up and walk to anther room...get a drink or something force yourself to. Just break the circle somehow.

Edited December 4, 2008 by BlowFish

[evolved trader 10]

Sdoma

 

Yeah, I think simply taking my hand off the mouse will be effective. I’ll apply that simple strategy Friday.

 

BlowFish

 

Yeah, I’m totally good with simulation mode. But thinking about it now I haven’t traded simulation for over 6 months. I have had some incredible consistent success for 4 months straight, then had a mindset shift and have been struggling with executing trades based out of fear. You’re right; I am breaking the circle now. I’ll do these then, take my hand off the mouse and get away from the computer.

 

Identifying and coming to terms with demons is likely to be an ongoing process however in the short term you might be able to force yourself through it. Maybe try Douglas' exercise (can't remember if it is in the 1st or second book).

 

Does anyone know what process Blowfish is specifically talking about? I do have Douglas’ second book if it’s in there.

 

Thanks guys for the help and advice.

Ryan:)

[BlowFish 10]

I have a feeling it's in the first. Kinda busy now but if no one chips in I'll add a bit more later.

[Kiwi 16]

et I don't know for sure what's causing it but here is a suggestion.

 

 

Download the Audacity (free) voice recorder or grab a tape recorder or dictaphone.

 

Place your order as before. Switch the recorder on.

Sit on your hands (yeah, physically, and stay there).

Describe (out loud so you hear yourself) what you are thinking and feeling.

Remember to breath slowly.

Keep talking.

 

Later analyse what you said. Over time you will figure out what the issues are. But in the mean time describing it and naming your emotions will reduce them and their effect.

 

Personally I'd change my target. Aim to take X trades that meet your criteria each day. Add a further aim to manage each one by your clearly written rules. Let the cash take care of itself (I don't believe you ever have to focus on cash --- just have good process goals that will ultimately give it to you).

[zdo 20]

great suggestion kiwi

thanks.

[Kiwi 16]

The other thing you might try is to tackle fear head on. Figure it out. Dispute it. Work out what the worst that can happen is and try to accept it as ok. Then work out what is likely to happen and accept that too.

 

Before you start the day say:

 

I choose not to fear losing money; and I accept that losing money is a part of the trading business.

 

Say it over and over. Visualize doing it. Breath and relax. If you feel discomfort try to figure out why and persuade the discomfort that there is a better rational way of looking after your own best interests. Then go back to saying it again.

 

Also accept the fear of losing the maximum amount you've allocated before you stop trading for the day. Finally try to learn to love your losers (yeah, love them, those cuddly little suckers).

 

I choose to love my losing system trades because you can't have a profitable trading business without losers. I love my losers and each one is just a down payment on futures profits.

 

 

I don't think you have to love "off system losers", just the system compliant losers.

Thoughts.

[evolved trader 10]

Kiwi,

 

Awesome advice. Thank you very much.

 

I've already got my mike infront of me might now. I've practiced a few trades already on paper and noticed hesitation and lack of confidence in my voice. Cant wait to give it a go tomorrow live.

 

Thanks for all the great input.

 

Ryan

[OAC 10]

Here is an exercise for you:

Take a hundred dollor bill, light a match to it and say: "It is only money"

 

:o

[That One Guy 10]

Yeah, I’m totally good with simulation mode. But thinking about it now I haven’t traded simulation for over 6 months. I have had some incredible consistent success for 4 months straight, then had a mindset shift and have been struggling with executing trades based out of fear. You’re right; I am breaking the circle now. I’ll do these then, take my hand off the mouse and get away from the computer.

 

 

 

I read an article on Bret Steenbarger's blog a while back. This part stood out to me and what it seems like you are going through.

 

In a subsequent communication, the trader revealed to me, "Each of these bigger losses occured after a period of very good trading. I didn't feel cocky, but my actions were. I cannot increase my relative risk tolerance after a period of success." This is a very good observation. The problem pattern is NOT triggered by a losing trade. It is triggered by success! After a winning period, our trader becomes emotionally attached to winning: he wants to eradicate losses. This has him resisting taking normal losses at his stop points and instead averaging down to minimize the loss. It's not that he's trying for a home run trade: he doesn't want to stop winning.

 

I don't know if this is the issue you are experiencing , but it seems similar. Instead of you taking big losses like the trader did in the article, you are simply not taking trades at all or hesitating.

 

Here is the full article if you want to check it out.

 

http://traderfeed.blogspot.com/2008/06/from-problem-patterns-to-solutions.html

[BlowFish 10]

Here is an exercise for you:

Take a hundred dollor bill, light a match to it and say: "It is only money"

 

:o

 

better still send it to me PO box ......

[stanlyd 10]

maybe this sounds crazy but sometimes when I have the same issue(exiting before I should), I do pushups.

So I take the trade, I hit the deck and start doing pushups to keep my mind from it. I am still working on this.

 

I found it to be helpful.

[ckait 10]

2 cents worth, sim trading is not the same as real trading. it is a good tool to help you learn a platform, but cant help with the real emotion of loosing your hard earned $. You must become comfortable placing the trade even if this means you loose over and over again. Eventually the fear will subside if you have a reasonable reason for making a trade and an effective way to manage the trade once you are in it.

[evolved trader 10]

Oac

 

Yeah, good idea. Think I’d rather give it away and make someone’s day...

 

TOG

 

Awesome! I’ll read over the article tonight. Thanks for the input and advice.

 

Stanlyd

 

I’m going to give that a shot too. I’ve heard running on the spot or doing push-ups like you do helps to get away from the screen. I’ll probably give placing the trade and exiting the room an shot. And no it’s not crazy, I read once Bret Steenbarger hops on the trend mill while letting his profits run.

 

Ckait

 

Exactly! That’s why I don’t sim trade anymore. I can sim trade till I’m blue in the face and successfully trading everything but that doesn’t mean much to me. It just proves me edge works. It doesn’t mean I’m successfully applying my edge. Thanks for the encouragement. I have overcome this in the past, but it seems to have crept back. It’s a process, I’ll get it right.

 

I’m going to apply everything you guys have suggested. I’ll report back Friday and let you know how it goes!

 

Thanks again,

Ryan:)

[brownsfan019 17]

Ryan,

My suggestion is that you continue to paper trade until you KNOW your system makes money. Based on your responses here, sounds like you are lacking faith in your system which then creates fear of loss and being wrong which then causes that immediate cancellation; ESPECIALLY if you've already lost money.

 

Getting into trading and doing it the 'first' time is easy. But once you get your teeth kicked in, your immediate response is to go defensive and try to prevent that from happening again. It's taught to us as little children - touch that hot stove and you will get burnt. Do it once to learn to never do it again. Losing money is kinda the same feeling - lose once and you never want to do that again.

 

IMO the only real way around this (and I've been where you are) is to believe in your system. You have to believe w/o hesitation that you can make money. That's easier said than done b/c not only do you have to believe, but you have to put those other emotions aside. This is very difficult and will not be solved over night or from a self help book.

 

My suggestions at this point would be to:

 

1) Paper trade and do your best to convince yourself it's real.

 

2) Backtest as much as possible, even if by hand.

 

3) If you want to see how it runs in real-time with a close to life feel, try using something like

Collective2

to run it. It won't replace real money trading, but you can at least get an unbiased view of it and you might even make some money on subscriptions too!

 

4) If you really want a critique, post here what your system is and let some persons that know nothing about you or the system try to trade it or dissect it. For all you know you might be right there, but one small tweak can push you over the edge. But you may never get there yourself.

 

I realize there's the 'I don't want to share my grail system' (I am this way) but if it can't make you any money, mind as well see if anyone else can make money at it and then hopefully you can learn from them and/or get that confidence that you need. If someone was making good money daily using your ideas, that might be the swift kick in the butt that you need!

[BlowFish 10]

2 cents worth, sim trading is not the same as real trading.

 

Just to be clear the reason I enquired about sim trading (I did not suggest it) was to determine if the fear is simply of financial loss. Clearly if you can not execute faultlessly on sim (many can not) then it is not simply fear of financial loss as there is no money at risk on sim.

 

In my case for example the strongest demon I need to keep at bay is fear of failure. There are others but 'loss' is fairly low on the list.

[walterw 10]

If the technical system its not Sound ( containing good RRR in it ) then this frustration and fear will always be there... we as professional traders MUST understand that first of all, technicall issues have to be totally resolved previoulsy to setting the psichological area... unfortunately it is a futil task to program your psicology on trading if the technique its no good...

 

The firts question to answer is : are there good and bad techniques ? better and worst ones ?.... I personally beleive that a good technique is the one where the intrinsic technique has a good RRR and you feel confortable with it... there is a great deal of good techniques that have a good RRR embeded into it... just find the one that suits your personallity, but it MUST have a good RRR... that way you will have always a positive final result, small stops vs large profits ( real or potencial )(chimp thing )....

 

 

The second question, (once you resolved your technical issue ) its the one Brown previously commented.. how much money in relation to your economy ?...

 

And third and final, as previously comented, you MUST make your psicological framework previously to trading where fear and greed must be placed on the right place... no instinctive reactions can be allowed on your trading... as you are buying and sellling risk permanently, we humans react in front of risk and want to avoid it... well, be my guest this bussiness its about NOT AVOIDING risk when you take a trade, BUT YES controlling risk thru a sound RRR embeded into your technical strategy... you can hear all the buda, mind programing tapes, mental hipnosis just in vain if your RISK its NOT CONTROLLED.... how can you controll it ? well, with a good RRR embeded into whatever your technical aproach is....

 

There is no better or worst technical aproaches, Chimp stuf, Candles, VSA, VMA, Delta trading, Pivotology... etc they all are good, what can vary its how you manage your RRR on any of this aproaches... thats the key... then programing your mind its the next step ( I recomend Mark Douglass book for that ) and finally... the most important maybe crucial factor... ENJOY TRADING really enjoy it ¡¡¡ have a positive thinking about it, amuse your self on this wonderfull world... its so beautifull... if its not, if it is a problem, a tragedy, maybe you may want to rethink if it is for you...

 

So recaping :

 

1_ Good sound technique with good RRR

 

2_ Dont trade more money than you can afford to loose

 

3_ Set your mind with Mark Douglass

 

4_ Enjoy it ¡¡ change your negative actitude

 

5_ $$$$$ like chimp stuff..

 

 

that was my chimpastic 2 cents... cheers Walter.

[BlowFish 10]

I've missed your posts Walter, hope to see more of you

[zdo 20]

The other thing you might try is to tackle fear head on. Figure it out. Dispute it. Work out what the worst that can happen is and try to accept it as ok. Then work out what is likely to happen and accept that too.

 

Before you start the day say:

 

I choose not to fear losing money; and I accept that losing money is a part of the trading business.

 

Say it over and over. Visualize doing it. Breath and relax. If you feel discomfort try to figure out why and persuade the discomfort that there is a better rational way of looking after your own best interests. Then go back to saying it again.

 

Also accept the fear of losing the maximum amount you've allocated before you stop trading for the day. Finally try to learn to love your losers (yeah, love them, those cuddly little suckers).

 

I choose to love my losing system trades because you can't have a profitable trading business without losers. I love my losers and each one is just a down payment on futures profits.

 

 

I don't think you have to love "off system losers", just the system compliant losers.

Thoughts.

 

Almost as soon as I thank you I now have to disagree with you. IMO, in the long term simple affirmations are a detriment. At best they are a waste of time. I know that flies in the face of all the common knowledge on the planet but...

[Bearbull 10]

Excellent Post Walter, spot on.

Without a consistently profitable strategy all the mental discipline in the world is not going to help. Think this has been debated in Mentality v/s Edge thread a number of times.