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SRspider

I Used to Blame Myself

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I used to blame myself for losers. That would cause a chain reaction of emotions that would lead to some real bad behavior, such as revenge trading, breaking rules, and deviating from the plan. Until I decided and realized that the losers weren't my fault at all, then things started to change.

 

Here is what happened. I realized that as long as I had a plan and the trade I took was part of the setups in my plan then, if I won or lost, it really didn't matter. I had already won, since I followed my plan. Once I figured this out and really believed it, I sat down and really wrote out a plan with some real specific entry rules and setups and how I was going to manage my trades. I did this from the 7 years of experience day trading and the many books , cd's courses, etc that I had purchased over the years.

 

I took a handful of setups and I decided that win or lose I was going to follow the plan and stick with it for at least one month and then evaluate the results after that. After one month of trading I looked at my results and had a net loss for the month. But I felt like a winner because I stuck to it, and never blamed myself for a single loss.

 

The next step. Where to put the blame? I put the blame on the setups I was using. Some were resulting in some real nice trades and others were not. I kept the good ones. The bad ones , I analyzed and thought to myself how can i make these better. So I tweaked the ones that I could and discarded the rest that I didn't like. After another month of trading i was net positive for the month and went through the whole process again.

 

Now after a few months of this routine I have a about 15 setups that i really like and the results have been amazing.

 

Once I stopped blaming myself I stopped creating all those negative emotions and actions that were leading to the path of destruction. I became creative , positive and everything turned around. I took a long hard look at any setup that was under performing and tried to improve it or discard it.

 

The reason I am posting this is because I know that there are a lot of traders out there that are going to some serious emotional roller coasters while trading and I think that what I have discovered will really help people get one step closer to achieving their goals.

 

But there is more, because , it was not easy to stick to the plan for a month. I used some knowledge I gained about myself to do this. I will post that in a later post. I would like to see what others think about what I have written.

 

SRspider

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I would like to see what others think about what I have written.

SRspider

 

I believe you have written a very informative post, great job. In these few paragraphs many key elements to successful trading jump out at me.

Emotions, have certainly pushed me along my trading career, sometimes not so gracefully. Persistence, 7 years is a long time in most anyone's opinion, and the many books , cd's courses, etc shows me you sure kept your eye on the prize. Discipline, "It was not easy to stick to the plan for a month," anyone who's tried it knows this is a great truth, and don't think I'm negating fact that you had a plan to follow in the first place, most don't, IMO. Replication, Having "handful of setups" that you could replicate trade after trade and then evaluate the results takes a lot of study, backtesting and screen time, again great post SRspider.

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.......................................

 

Now after a few months of this routine I have a about 15 setups that i really like and the results have been amazing.

..........................................

SRspider

 

15 setups ... how on earth can you cope with 15, and what do you trade that seems to require such a number.

 

good for you.

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Great post ... these problems are shared by most traders, I am certain. In fact, I would venture to say most professions have similar problems! For me staying focused, disciplined, and methodical is the hardest thing. There are just too too many distractions being online with live data and access to information and education at our fingertips! I would venture to say traders who charted with paper\pencil might have a slight edge ;)

 

Maybe its time to setup a desk without a computer for the setup work ...

 

MMS

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I trade oil, gold, the euro,and sometimes but not much the es. I have 15 setups, but mostly I concentrate on maybe 4-5 key ones that setup usually everyday. The others don't form all that often. Thanks for the reply.

SRspider

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$ , Thank you for the positive remarks.

 

Market Scientist,

Yes with all that information it is difficult. But what you must do is, take that information when the market is CLOSED and then do your work then. Choose your setups, develop your plan, really detail out the information. Example. The setups need specific criteria for entering and also exiting. Also you need to determine how much size you are going to trade. What markets are you going trade. These are just some of the questions that need to be addressed BEFORE you trade, not DURING. Once you have that you must, must, follow your plan and just take the setups, don't worry about winning or losing. Just focus on taking those setups you defined. Now the result of what happens you must constantly monitor, what setups you took and how they worked out. Can you change the setup to make it better or should you just throw it away and look for others. You do need to give them sometime. 1 week is not enough, you might have to observe the results over 4-6 weeks to really know.

 

Start with only 2 or 3 , whatever you feel comfortable with. Treat them like they work for you, if they do something wrong try and work with them to make them better , if they are not performing and there is no hope for improvement, you must let them go.

 

I hope this makes sense.

SRspider

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But what you must do is, take that information when the market is CLOSED and then do your work then. Choose your setups, develop your plan, really detail out the information........ These are just some of the questions that need to be addressed BEFORE you trade, not DURING. .

 

good advice.....often I kick myself for doing too much on the fly, when the best thoughts are usually done after the market, such as - "" given we are in a bear market, today was strong, rallying toward resistance, tomorrow if it opens strong and there is no real follow through I will short at these levels.""

Often when rushed I have had a tendency to suddenly get bullish thinking its a buy buy buy, when I have not done the homework.....impulse buying at its best, usually turns out to be the worst.

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[quote name=SRspider;119000I realized that as long as I had a plan and the trade I took was part of the setups in my plan then' date=' if I won or lost, it really didn't matter. I had already won, since I followed my plan.

SRspider[/quote]

exactly. I've told this to many traders who are struggling. The other side of that coin is, when they make money on a trade, but they violated their rules, that is not success. I'm reminded of 'If' by Rudyard Kipling, and the line:

"If you can meet with Triumph and Disaster

And treat those two impostors just the same;"

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biko,

absolutely correct. What matters here is that you follow the plan. Because only by following the plan , can you make it better and more statistically in your favor. By adjusting what needs to be adjusted, if need be. Otherwise, those trades that were taken by not following the rules, will be very difficult to reproduce as you may not know why you took the trade, other than "I felt it was gonna go up" . And most people do not have the intuition to trade successfully that way, not in the beginning years at least.

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Today was a good example of what I am talking about as far as my experience. On my first trade , which was a valid setup, I got stopped out , without having a chance to move my stop , so the stop out was a full one. In the past i would have quickly re-entered the market trying to get back what I lost. This time I put my emotions in check, continued to analyze the market and shortly there after another setup occurred which hit two of three targets. It put me back close to break even for the day. Patiently waiting for the next setup, which took quite a while to appear, I did nothing. Once it happened I took that as well and was able to get back into the black for the day. Everything based on my trading plan. I did feel some negativity about the stop loss early, but I was aware of the feeling and did not allow it to cause me to break my trading plan guidelines. All the while reminding myself that its more important to follow the plan than not to follow the plan, win or lose.

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A note of sticking to your plan. A while ago I read a book by T Harv Eker, where he talks about this concept that really made sense to me. Basically he states that your beliefs lead to thoughts, and those thoughts lead to feelings, and those feelings lead to actions, which in turn lead to results. When trying to follow your plan, you must absolutely believe that following your plan is the only way to properly evaluate it. You must believe that one trade alone will not determine whether your plan is good or bad. That one or two or three weeks will not be enough. With this belief in mind your thoughts about losing trades will be more positive and you will be able to use the losers in a creative manner to either adjust the setup or toss it. Without this belief you will fall into the trap of , emotional trading once you have one or a few losing trades, throwing the whole plan out the window, and finding yourself asking what happened at the end of the day.

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@MadMarketScientist ...ahuh ahuh ahuh you're happy if im looser.ok watch and see. huhuhu please teach me to be like them

 

Sorry no, I am not happy you are losing money - I was was happy you liked the post by your statement ... "i really really love this post."

 

MMS

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