What do you do to stop overtrading / manage trades? | Psychology and Money Management

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What do you do to stop overtrading / manage trades?

  #55 (permalink)

Trading Experience: Intermediate
Platform: TradeStation
Broker/Data: TradeStation
Favorite Futures: Futures
Posts: 7 since Mar 2012
Thanks: 0 given, 12 received

Consider Algorithmic/Automated

I like the idea of programming and automating multiple strategies, so the computer enters trades instantaneously when and only when the predetermined conditions occur. Similarly, there are predetermined exit instructions for each strategy which I admit I occasionally (but not often) override, for example if there are unanticipated extraordinary gains that I want to lock in while the market is at a strong resistance level which I expect it will fail to exceed. There are some products on the market which are reasonably priced and can assist you in designing your own strategies. Using such a program, you can incorporate a neural net into the entry conditions for your automated strategies. The neural net will often strongly limit the likelihood of an entry into the market in such a way that the chance of a favorable outcome is significantly increased. This can certainly help to avoid the over-trading issue. Since the computer will determine and execute the entries, you can trade multiple markets at once - only a small percentage of strategies are likely to actually enter a trade on any given day, but the chance of success and an entry into a favorably moving market may be better than you will achieve by closely trying to follow and react to price movement of only one or two markets. Alternatively, you can program your own strategies with entry filters that you create, usually from higher (longer) time frames than the time frame on which you are trading. The computer is much faster than the human being and it never gets distracted, loses concentration, or reacts emotionally , etc.

Last edited by TraderDoc2; July 26th, 2019 at 11:08 AM.
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