I recently have been having huge breakthroughs in my chart reading capabilities. For the past few weeks I have been hitting 70% accuracy in my trades. I am debating when how long to wait before I trade with real money. I'm thinking a minimum of two weeks.
The thing is the past 3 times I have tried trading with real money I have lost... and now I am fearful I will lose again. Its hard for me to get past that. Does anyone have any tips on how to psychologically make myself believe I can do it with real money?
Why are you fearful of losing? We all must lose and your 70% accuracy on sim is good, but it also means 30% losers, right? And sometimes we can lose many times in a row just due to pure chance. Whatever we think about our edge and its great entries, most will succumb to simple chance.
The first step to overcome this fear is to trade small enough that you don't feel the pain. Al Brooks calls it the "I don't care" level. For the Emini that may mean one contract only, and possibly 1-2 point scalps only (with 1 point stops say). But a 1 point stop is very tight for the ES so you need to wait on high probability scalps only. (I assume you have learnt this already from your sim trading.)
Could say lots more on the psychology and money/risk management side but others will chime in with such valuable stuff. For now, trade like you don't care about the trade's monetary end result, accept losses, and go from there. If you are too scared to trade 1 ES contract, find another market that is cheap enough.
Last edited by RichardHK; November 12th, 2013 at 01:55 AM.
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I think this depends on the underlying reason why you're able to do so well. If it's indeed a reason that can 'stand the test of time' and not be invalidated by a change in the markets, you may be on to something
Well guys, I had a very high win percentage on my paper trades for the past 6 months. 84% of my days were winners.
Last week I started with real money. The first two days were great and I had returns as expected. Then on the third day I got nervous halfway through the day as I was losing. Normally I would make a comeback but for some reason the feeling of trading with real money was much different. I lost everything I made that day and more. And then the day after that I was not in the state of mind to trade so I paper traded. Then this monday I traded and lost even more (using a different strategy).
Today in paper trading I lost again, although yesterday (tuesday) I gained.
The month of march in general was bad. More losers than I had in the past and I felt like I lost my edge. Is this a common thing for traders? Have I lost my original spark with the markets?
I think that often, trying to make a losing day a winning day is a good way to lose more.
Something is not working well if you are hitting more losses than usual. Maybe today's market action is not what your method handles well. Or maybe something is a little off with you, psychologically or physically. Whatever it is, it may be good to stop and come back another day.
You could try something like this: have a rule that says, "If I lose more than x amount (not a real large amount), then I stop trading for the day. Or: "If I have x losing trades in a row (perhaps 3), I stop trading for the day."
Or maybe you just go for a walk to clear your head. But trying to make back losses will tempt you to make risky or just flat bad trades, at a time when things aren't working too well anyway.