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requesting advice on how to repair my psychology
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requesting advice on how to repair my psychology

  #1 (permalink)
Elite Member
Williamsburg, VA
 
Futures Experience: Beginner
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requesting advice on how to repair my psychology

I'm in Law School, but don't really want to be a lawyer. Its a nice back-up plan in case trading doesn't work out. I've been focusing more on trading that Law School, and made some great strides in improving my trading. I looked at the opportunity that Top Step Trader presented and went for it. I didn't apply for a 2L summer internship because I figured I should jump at this opportunity without a rope or a safety net.

I spent my first combine doing pretty well, I was consistently making $300 or so dollars a day and moving that number up consistently and incrementally. I had what I'll call a technical error. Instead of using OCO to make trades so my stops were automatic, I manually placing the stops. That worked fine until I pulled an order and forgot to pull my stop with it. Price had a big move and moved me passed my daily loss limit. Note self, that wasn't really an error in trading, it was an error in execution. I'll make sure that it doesn't happen again. I learned how to use the OCO function on the T4 platform.

The next combine I did even better, I consistently made over $800 a day, I had a couple of days where I eclipsed $1000 and even had a high water mark over $2700 hundred. I was $1500 dollars over my required total. I thought to myself, that I don't just want to do this an exercise, If I make more that double what they want in 10 days they'll fund me with no reservations. I lost about $950 that day, but I was still up more than I needed to. Prudence demanded that I just trade a 1 contract lot, but I don't like her telling me what to do. I traded the next day in a similar vein, and I lost $1020 dollars which violated one of the requirement for my combine. The silver lining is that I didn't break my keyboard.

Several Combines later I didn't have a winning day. I called my mentor and he talked me down, he changed the way I had been trading and brought me back to basics. I also contacted TopStepTrader and this isn't a plug for them, but they were absolutely helpful. I was ready to pay for the coaching and psychology sessions and Erin who is their support person told me that she could arrange a short session with Mr. John Hoagland to walk me through some things, and if that didn't work then, I could pay for coaching. John was understanding and insightful and reminded me of a lot of things I already know. I really feel like I turned a corner.

On this last combine, I have been mindful of risk management and my entries. I've been trading fairly mechanically. Something is still missing. I've been keeping a cognitive journal and the issue I seem to have is that when I get to or near my goal I get cocky or lazy, or greed trys to drive me over the finish line. I was up over $3000 on Friday morning having traded 7 days and hitting a high water mark of $1440 net. I figured I would have a nice easy time of reaching the finish. I was down that day, and down on Monday, Tuesday and down again today, losing an average of $600 dollars. So I haven't had draw down, but I'm pretty much back to where I started.

This morning was strange. I wrote down exactly what I believe had the highest probability of happening. I traded 2 contracts I was comfortable with my risk, planning on adding to the position on a pullback. I entered long and after price moved against me a little, but not to my stop, I believe I was wrong, so I moved my stop up to minimize the loss. I had a couple of other trades that seemed to make sense as well, but failed. I'm analyzing the situation and my original assessment was absolutely correct. It was a 40 tick mover, that I really wish I had have stayed in.

The silver lining right now is that I'm not emotionally troubled by the missed opportunity or P/L statement right now, like I was a couple of weeks ago. I have also realized that the missing element is my confidence, my swagger, my mojo etc. My intuitive brain is talking my rational brain into bad situations and out of good situations. I'm relatively new trader, I've really only been doing this for about 2 years. I figure I understand the principles of trading if I was able to make over $5000 in less than 10 days on purpose. I do believe that there is an element of luck involved in all positive outcomes, but that aside, I was making good entries, managing my losses well and selecting pretty good targets.

I'm trying to figure out how to get my swagger back, and how to trust myself again. Incidentally, after the $600 loss today, I switched to simulator after taking a break and am up over $1000.

So issues are how do you or I and anyone that is a trader, get passed a horrible losing streak, and I think I've done that once already; and how does a trader manage themselves when it comes to meeting goals and maintaing focus once they do meet the goals. I'm tired I tripping at the finish line. Any advice would be helpful....

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  #2 (permalink)
Quick Summary
Quick Summary Post

I am a trader looking for advice on how to recover after a losing streak, and most importantly how to stay focused once I've arrived at or near a P/L goal.....

 
  #3 (permalink)
Trading Apprentice
Canada
 
Futures Experience: Advanced
Platform: Ensign Soft
Favorite Futures: Russell 2000 and ES
 
Posts: 25 since Jun 2013
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ok


what I am trying to figure out after a losing streak:

is it me or the system?

usually you did spend a lot of sessions trying to get your system to work properly and you did figure out the best entry/exit rules and money management to make it a winner.

usual culprit: you

if you did everything by the book, go on it will work.

but if you did not follow all the rules then identify what you did wrong.

Where did your discipline failed.

and after a losing trade small very small. Or don't trade at all> for every $100 you lost, stay away from trading for a day. $600 then 6 days no trading.

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  #4 (permalink)
Trading Apprentice
Canada
 
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journal

the idea of a journal is excellent but NOT on a public forum.
why? cause you will want to impress the crowd and it will add additional stress and mistakes and losses you do not need. I know I can't. Maybe you are different. But after reading quite a few public journal, it is not something for everybody.

But I think you should share your journal with one person, so that person can put you back on track whenever you are depressed or euphoric.

As well review each trading day. Plot where you entered the trade and where you exited on whatever chart you are using. See if you did follow the rules of your system.

As well plot your profits and to see them grow, calculate on average how much you are making.

Once in a while ask your broker to send you part of your profits so you can realize it is for real and go spoil yourself.

Personally I like the idea of daily/weekly/monthly goal to gain consistency.

You concentrate hard, do everything by the book but only for a short(or shorter) period of time.
Many days I am done @ 10:15 AM eastern time.
I have to tell you I cannot count how many times I lost my early morning profit and fighting to break even THEN make profit is exhausting.

Say your target is $100 daily / $500 weekly.
If by an exceptional circumpstance you make that $500 in the first day(strong directional mouvement and traling stop-loss) you are done for the week. A rested trader is a winning trader.

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  #5 (permalink)
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I'm sorry to say this but you do know that this TST combine thing is not necessarily designed to make you a better trader, but rather create an arbitrary set of rules that are easier for you to fail at so that the business has a positive profit margin right? It's the closest thing to leaving a claw crane machine in an arcade - $1/100 yen to play 1 game, for the chance at a plushie sense of a achievement.

I'm fine with their business, since it's a mutual agreement between them and their clientele. But I hate to see it taking away the bright future that you have ahead of you: My firm's lawyers charge anywhere between $400 to $1200 per hour, which is several times more than 3 years of TST Combine will teach you how to make. They've helped incorporate startups in medical technology and raise $7M in seed funding, which is more meaningful than staring at colorful charts with 12 separate monitors. That's not to dissuade everyone from trading, but there are better ways to get into this field.

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  #6 (permalink)
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Thanks for the insight from all of you. Artemiso, not every lawyer, in fact most lawyers don't go into the venture capital, private equity realm. The ones that do are the property of their firm. They are tools to be used 60 hours a week on a good week and 70+ on bad weeks. I have 17 years of military experience, a MBA, and in a year, a JD. I could easily go the route of Private Equity or VC and be a considerable value add. I'm not passionate about it and to be frank how much of the $400 - $1200 an hour is actually going to the 1st year associate? Pretty much none of it, because the current trend in the industry is for Firms to discount the value of any work contributed to 1st year associates. You don't get rich as a lawyer unless your good and unless you have your name on the wall. I'd rather focus my energy on improving myself and being a better trader and entrepreneur. I didn't pay for an education from TST, I've been trading on my own for a little while now, just figured it would be better to do it with someone else's money.

Bloop I appreciate everything you said. I fully admit to being the culprit. I think part of the trouble with being a retail guy or at least away from a desk is you don't have someone there to bounce idea off of or commiserate with on bad day. I will get better about taking notes and keeping a journal. I think part of my problem is focus, toward the end. I pay attention to detail early on and then less so, when I get close to the finish. Part of consistency is doing the same thing at the beginning as you do at the end. The military uses checklists for that including the after action evaluation. I have be inconsistent with my use of the Checklist, taking mental note instead. I'm going to review my larger trade plan tonight, and fine tune written checklist.

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  #7 (permalink)
Market Wizard
Sarasota FL
 
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FWIW, I also had a good discussion with John Hoagland, and I found him to be very helpful. I think they understand trading from a certain perspective (they emphasize loss control, keeping in the game and consistent, modest profits), and they can help. So that resource is there for you and I think it is worthwhile.

Also, just my two cents, but you said:


Black Wolf View Post
I'm trying to figure out how to get my swagger back, and how to trust myself again. Incidentally, after the $600 loss today, I switched to simulator after taking a break and am up over $1000.

In other words, once it didn't matter so much, you traded just fine. So maybe if you just do what you know will work if you are consistent over time -- without worrying about individual outcomes -- you will find that, actually, it really does work over time. Exulting over a great performance, or obsessing over a bad one, can send you spiralling out of control.

Maybe your mojo will come back too, with your confidence.

Just some thoughts, hope some of it makes sense and helps.

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  #8 (permalink)
Trading Apprentice
Canada
 
Futures Experience: Advanced
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Posts: 25 since Jun 2013
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concentration

Mr Wolf, it is very hard to concentrate for the whole trading day. I can't.
Maybe it can be done once in a while but 5 days a week form opening to closing bell , no likely.


You have to be healthy, rested, calm and have nothing else on your mind(at least minimum negative thoughts).

if you're sick, did not sleep well, are excited and got in a fight with the loved one all at the same time, you'd be very lucky to get a profitable day if you were to trade all day.

When you mentioned: I think part of my problem is focus, toward the end
Well you recognize that you have a limit and now just don't exceed it.
And thanks you are normal! Concentration is fading that is normal.

Check list is great but if your attention is not there it is going to cost you.

Another solution is a private chat where everybody trade all the same instrument the exact same way.
Limit 3 or 4 individual.
I participated to such a room and it is very motivating and what's nice the other guys keep you on track.
It is a fantastic experience but very difficult to find a group of people willing to do that.

And Dude you are on the right track!

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  #9 (permalink)
Elite Member
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Platform: thinkorswim
Broker/Data: TD Ameritrade
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Black Wolf View Post
Thanks for the insight from all of you. Artemiso, not every lawyer, in fact most lawyers don't go into the venture capital, private equity realm. The ones that do are the property of their firm. They are tools to be used 60 hours a week on a good week and 70+ on bad weeks. I have 17 years of military experience, a MBA, and in a year, a JD. I could easily go the route of Private Equity or VC and be a considerable value add. I'm not passionate about it and to be frank how much of the $400 - $1200 an hour is actually going to the 1st year associate? Pretty much none of it, because the current trend in the industry is for Firms to discount the value of any work contributed to 1st year associates. You don't get rich as a lawyer unless your good and unless you have your name on the wall. I'd rather focus my energy on improving myself and being a better trader and entrepreneur.

I don't see your argument here. True, the $400-$1200/h figure is for a partner at a large firm, not an associate. But first year work is always going to be miserable. The same can be said of first year analysts and associates at investment banks and prop trading firms. Yet first year associates will always be better paid and have better quality-of-living than first year retail speculators. I rarely make such generalizations unless I have strong evidence for the claim.


Quoting 
I didn't pay for an education from TST, I've been trading on my own for a little while now, just figured it would be better to do it with someone else's money.

TST is a game simulation, from what I see, that charges you a nonrefundable deposit for each time you fail. This is a claw crane machine - yes, you get to trade someone else's money (win a soft toy) if you pass (catch the toy), but the arcade/house/firm always wins. I don't think it's fair to pay money for such a game. Moreover, the rules don't make you a better trader - they mostly suggest that you take large sigma exposure at the start, and if you get lucky, taper off your position to pass the game. It's the optimal strategy to win the game; I don't think it involves skill. I doubt I'd pass it either.

The problem is that the people who run TST are not incentivized to make you a better trader with the terms that they're giving you. If they actually had a clause that they paid you $2,000 if you followed the rules that they wrote down for you for 4 attempts, but you still failed, then they would actually make it a decent training program.

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  #10 (permalink)
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Black Wolf View Post
Thanks for the insight from all of you. Artemiso, not every lawyer, in fact most lawyers don't go into the venture capital, private equity realm. The ones that do are the property of their firm. They are tools to be used 60 hours a week on a good week and 70+ on bad weeks. I have 17 years of military experience, a MBA, and in a year, a JD. I could easily go the route of Private Equity or VC and be a considerable value add. I'm not passionate about it and to be frank how much of the $400 - $1200 an hour is actually going to the 1st year associate? Pretty much none of it, because the current trend in the industry is for Firms to discount the value of any work contributed to 1st year associates. You don't get rich as a lawyer unless your good and unless you have your name on the wall. I'd rather focus my energy on improving myself and being a better trader and entrepreneur. I didn't pay for an education from TST, I've been trading on my own for a little while now, just figured it would be better to do it with someone else's money.

Bloop I appreciate everything you said. I fully admit to being the culprit. I think part of the trouble with being a retail guy or at least away from a desk is you don't have someone there to bounce idea off of or commiserate with on bad day. I will get better about taking notes and keeping a journal. I think part of my problem is focus, toward the end. I pay attention to detail early on and then less so, when I get close to the finish. Part of consistency is doing the same thing at the beginning as you do at the end. The military uses checklists for that including the after action evaluation. I have be inconsistent with my use of the Checklist, taking mental note instead. I'm going to review my larger trade plan tonight, and fine tune written checklist.


Trading is just a game about transferring wealth between market participants (zero sum game) and from traders to the retail industry (brokers, educators, software vendors). It is very similar to gambling. It is true that it is an intellectual and psychological challenge and contributes to building or rebuilding your personality. I consider it a good way to spend one's time, once you are retired, have some money to play with and already lost interest in your profession and other activities.

The good thing about trading is that it does not harm society. Your are not contributing to society, but you are not taking away something either.

If we look at lawyers, this is different. Some of them are executing useful work that is beneficial to the society, they contribute and are rewarded. However, during recent decades lawyers have made abuse of their powers, and mainly filled their own pockets. As with bankers this is due to an agency problem, since nobody has controlled what they are doing. Collectively you can now consider them as parasites that feed on the selfishness of society and the complex rules they have designed to make a living.

The army produces safety. Do they? The war in Iraq may have been an honourable enterprise for those who were forced to participate. But the explanations given to the public to justify the invasion were mostly fake. No, the army does not produce safety. The existence of armys is mainly due to a prisoners dilemma, as the logic of game theory drives the military to make decisions that are far from the optimum. Nash equilibria do not lead to an optimum allocation of resources, the existence of invisible hand is just a fairy tale, as feedback loops are not suited to rule complex systems.

So here is your choice:

Trading -> game to transfer wealth, neutral value, spend your time in front of a screen
Lawyer -> danger of living the life of a parasite, as actions of lawyers mostly cancel out
Military -> collective wealth destruction, due to lack of negociation with their enemies (prisoner's dilemma)

What about working as a gamekeeper? In terms of fitness, quality of life and for your conscience it might be a better choice.


Last edited by Fat Tails; June 14th, 2013 at 07:49 PM.
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