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Unable to follow my rules and result is string of losses. How to break this habbit ?


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Unable to follow my rules and result is string of losses. How to break this habbit ?

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  #1 (permalink)
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When I was new to trading and in learning phase, I came across many diff strategies based on break outs, failures, candlesticks, indicators etc and almost tried all. Very soon I realized dt in order to be successful, I need to just stick wid 1-2 of the strategies.. follow them religiously. If there are trades based on them, take it else be patience.

Now, the methods (1-2 dt I trade) have been well back tested and I know they have positive expectancy and wil give me profit over a period (ie..all months profitable in last 2 years of back testing and continues to be on paper)

Here are my problems that keep haunting me on and off :

1. In my mind, I know I have to trade ONLY the methods A and B. Any other set ups that I see, I will ignore. But this doesn't happen everyday. Very often, I end up trading other methods unconsciously and realize only at EOD with deep hole in my ledger. How to get out of this mental practice ?

2. I understand that all trades can't be winners and we have to let go when some trades end up on losses. But unfortunately, the moment I see my ledger small red in the morning, my entire focus goes on to try to cover those losses. During this period, my entire focus gets lost. I forget dt I have to follow my rules and methods but I end up taking trade left right and center based on the next set up I see. needless to say I end up over trading on the day and the losses eat up probably the last 2-3 days profits as well. What is wrong with me.. I tell myself everyday that "I will not do this today". Some days goes fine with this mantra but most of days.. my over trading and trying to cover losses over take me. How can I control myself and be disciplined with my rules and trades ?

Just to add... when I see losses..I unconciously switch down to lower time frame and try to take (basically make up) a set up so that I can take a trade.. make it profitable and cover the losses... aahh (facepalm)

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  #3 (permalink)
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Sim trade until you can trade like "Spock" ... emotionless and disciplined.. track your trades and why you took them..usually patterns will appear to help you to "stick with what works" ...
Patience is critical to being a disciplined and profitable trader..
Let the market come to you, don't chase it, or try to "make up" a setup just for the action or to get money back..
Trading is a job, treat it with the respect that it deserves...or it will punish you..

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Start a journal.
Post your trades in real time giving the reason for the trade and the planned exits.
You'll be surprised how being accountable to a bunch of strangers will change your behavior.

"The days when I keep my gratitude higher than my expectations, I have really good days" RW Hubbard
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Brett Steenbarger's blog is hands down the best trading psychology blog and there is a lot of things related to your problems. Start reading this if you haven't already: Three Top Reasons Why Traders Fail to Trade Their Plans and this Why 90% of the Mental Game is Your Trading

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  #7 (permalink)
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Thank you very much guys ! Appreciate the responses !

Over this weekend, I have been going through a loads of articles and youtube videos and have noted down some really nice things. Gotta work on them over the next few days/weeks.

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manishchan View Post
Here are my problems that keep haunting me on and off :

1. In my mind, I know I have to trade ONLY the methods A and B. Any other set ups that I see, I will ignore. But this doesn't happen everyday. Very often, I end up trading other methods unconsciously and realize only at EOD with deep hole in my ledger. How to get out of this mental practice ?

2. I understand that all trades can't be winners and we have to let go when some trades end up on losses. But unfortunately, the moment I see my ledger small red in the morning, my entire focus goes on to try to cover those losses. During this period, my entire focus gets lost. I forget dt I have to follow my rules and methods but I end up taking trade left right and center based on the next set up I see. needless to say I end up over trading on the day and the losses eat up probably the last 2-3 days profits as well. What is wrong with me.. I tell myself everyday that "I will not do this today". Some days goes fine with this mantra but most of days.. my over trading and trying to cover losses over take me. How can I control myself and be disciplined with my rules and trades ?
(

How long have you had this trading plan and how much have you traded it in SIM or live?

Wolf

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  #9 (permalink)
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Traderwolf View Post
How long have you had this trading plan and how much have you traded it in SIM or live?

Wolf

Hv been trying to trade this particular method since the last 3-4 months. 1 month of paper trading wid it but then I started live coz paper trading doesn't help me much. The real scenario comes in when we hv to the real money in the play.

Yes..I am playing with smaller contract size for now.. but profitwise, its like I move 2 steps forward and 1 backward.. sometimes 1 forward and 2 back.

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manishchan View Post
Hv been trying to trade this particular method since the last 3-4 months. 1 month of paper trading wid it but then I started live coz paper trading doesn't help me much. The real scenario comes in when we hv to the real money in the play.

Yes..I am playing with smaller contract size for now.. but profitwise, its like I move 2 steps forward and 1 backward.. sometimes 1 forward and 2 back.


Couple more questions .. How did you do in SIM? Did you follow your plan every day? Did you make consistent money? Did you demonstrate 2 main things:

1. The plan has an edge?
2. You can see the setups(edges) and trade the plan at the hard right edge at market speed?

Wolf

PS.. Only asking these question to see how much time and effort you have put into your trading plan and SIM testing it.. Many do not spend enough time in that phase of trading IMO.... Only you know the answer to that.

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  #12 (permalink)
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Traderwolf View Post
Couple more questions .. How did you do in SIM? Did you follow your plan every day? Did you make consistent money? Did you demonstrate 2 main things:

1. The plan has an edge?
2. You can see the setups(edges) and trade the plan at the hard right edge at market speed?

Wolf

The plan definitely has an edge and it's executable at the market speed. Yes, I did do well in the SIM. I'm just unable to do it only when it comes to putting the real money expecting to have similar profit as in SIM.

Well.. here is one more thing that I know but unable to pass though. The set up has about 65-70% success rate which is quite good. It's just dt during the other 30-35% I will have to take the small losses... I'm unable to accept these losses if they come in letz say continuous 3-4 days. After 1-2 days of loss I give up my control over mind and end up over trading..trying to recover the losses. End result.... big hole in the 3-4 days and then have to work my way up for the entire month just to cover them.

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  #13 (permalink)
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tturner86 View Post
Do you make your bed in the morning?

Haha.. dtz how my day starts. All well planned.. keep reminding myself to follow the rules.. re-look at the methods.. remind myself to take only the trades dt the set up indicates and skip the rest.

Prob is.... when the realm of real time trading takes over when mind is focus on to take the trade and be profitable, I forget I even own a bed

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manishchan View Post
Haha.. dtz how my day starts. All well planned.. keep reminding myself to follow the rules.. re-look at the methods.. remind myself to take only the trades dt the set up indicates and skip the rest.

Prob is.... when the realm of real time trading takes over when mind is focus on to take the trade and be profitable, I forget I even own a bed

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Go to what @sptrader said in post 4..



Until your subconscious mind can accept your plan as having an edge and your ability to trade it in a SIM account, you stand no chance of trading live. Our EGO's have a way of BS'ing us even when we are in SIM and we all like to get fast results.

Go back to SIM and be a student of your plan, its edge, and how you trade it and document what is going on looking for continuous improvement.. It is very hard work to do that properly.. Maybe you have done it.. Do it again until you can double a small account with small risk..

Good luck

Wolf

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Many good ideas here. Here are a couple of others:

- When you start to have losses, stop trading. A good idea is to decide in advance how many losses in a row you will accept. Many people like to use 3. So if that's the rule, then after 3 losses in a row you stop for the day, or stop for an hour, or take a walk, or do some other action other than continuing to trade. That will stop the attempts to "make it back" when you have a string of losses. "Making it back" does not work, by the way. It does lead to bad trades and emptied accounts. It's a gambler's impulse, not a workable trading idea.

- Decide on a definite maximum loss amount you will accept for the day. ($250? 200? -- doesn't matter what the amount is, so long as it's an amount you can accept and it's not too large.) When that daily loss limit is hit, stop trading for the day. This will also break the cycle of throwing the rules overboard and trading frantically to "make it back."

Of course, these are rules too, and if you can't (actually, if you won't) follow them, they will not help you. You should decide that these are simply unbreakable, and the only thing you can do when they are hit is to stop right then.

Now, the alternative is simply that you will blow your account up, if you're trading live, which you probably shouldn't be, and then you won't have a problem with rules after that.... That may not be your best solution, though.

Good luck with this. People do find it hard, but you need to get a handle on it.

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manishchan View Post
Just to add... when I see losses..I unconciously switch down to lower time frame and try to take (basically make up) a set up so that I can take a trade.. make it profitable and cover the losses... aahh (facepalm)

This is not unconscious, rather a bias and direct attempt to recover losses.
Smaller time frames are out of context when it comes to taking trades and add deep
methodical pressure when are used as the only source of reference.
Look at all time frames when taking a trade, is very important, and will cause you not to over trade.
Context is everything.

Lastly, you mentioned you traded this system for 4 months or less, I think you should look at long term track records of successful traders to realize that some go 3-6 months (or more) without the system making them money.
On this forum many are sent to back to "Sim" whenever they lose discipline, just to repeat the cycle again when you come back. My suggestion is different, every method you trade backtest it going back 5 years, 1000 trades, etc and use a platform that gives you possibley better accurate results like MultiCharts. This will cause you to see with your own eyes as to validity of the method longer term. It would be hard to believe that you would use a method that is a loser despite the fact that it can have periodic winners. I am sorry but 4 months whether paper traded or real life just not reflect any positive or negative. I wish you well.

Matt

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deaddog View Post
Start a journal.
Post your trades in real time giving the reason for the trade and the planned exits.
You'll be surprised how being accountable to a bunch of strangers will change your behavior.

This is an extremely valuable suggestion. Start a trading journal here on futures.io (formerly BMT), and it's surprising how you will want to keep to your rules, and how you will be able to see where things went wrong, either with your technical execution or psychologically, when you try to explain it to someone else, publicly.

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manishchan View Post
Haha.. dtz how my day starts. All well planned.. keep reminding myself to follow the rules.. re-look at the methods.. remind myself to take only the trades dt the set up indicates and skip the rest.

Prob is.... when the realm of real time trading takes over when mind is focus on to take the trade and be profitable, I forget I even own a bed

Hi manishchan,

Couple of thoughts;

if you cant follow your plan then you dont believe in it. Not trying to be harsh.. its just one of the truths of trading. When you believe something is going to work you dont change it or deviate from the process.

Second point - Focusing on being profitable is one of the worst trading mistakes you can make. I know it sounds counter intuitive but the truth is profits are nothing more than the result of an action or in this case a trade.

Most traders look at a trade then ask how much they are going make or lose. They get a number stuck in their head and wont let go. This causes traders to hold on to trades too long or not long enough or even worse changing their plan up daily.

The better approach is to follow your plan and take the trade and exit of trade. After you get a couple of weeks worth of trades under your belt, then go back and review. If you have successful trades and overall is profitable then start tweaking the process to see if you can get more out of it.

Not worrying about how much profit you are going to make takes a huge weight off your shoulders. It allows a trader to focus on the plan (action) which at the end of the day will ultimately determine your profits(result).

Robert

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It looks like you are focused on the Profits and not on the Process.
This is a big NO!

Please, focus on the Process, not on the profits
I repeat, stop thinking about the money, and focus on the process!


Of course you have to be patient, and stay disciplined. Everybody will repeat that to you, in sports, arts, science, trading or others.

But how can you be patient and stay disciplined? how?
The how for me is by focusing on the process and forget about the money...
Then comes:

1. Patience
The key to everything is patience. You get the chicken by hatching the egg, not by smashing it.

Developing your trading plan will take time. Developing skills will take time.
Waiting for the right trade opportunities requires patience. Entering and exiting a trade at the right moment requires patience.

2. Discipline
It is a virtue, and it means doing the things you need to do to progress and get better….even if you don’t want do it.

This means preparing for each trading day or week with research and chart study.
If you’re a mechanical or automated trader, this means back testing systems and constantly trying different settings and strategies as the environment changes.


And of course, don’t forget about keeping a trade journal and reviewing every single day you trade.
Journaling is the one trading task that separates the wannabe traders from the real deal traders. Unfortunately, most newbies won’t do it.


Let me tell you this:
Trading concepts and techniques are simple and easy to learn. What’s hard to learn is how to be patient and disciplined to do the right things and make good trading decisions. Truthfully, it will be one of the most difficult endeavors you will ever take on!

To a newbie, sitting on the sidelines and watching the markets move while you wait for your best setups means you’re missing out on profits.

BUT This way of thinking leads to a failure of patience and discipline and causes some of the most notorious trading mistakes:
1. Impulse trades
2. Letting losers run too long
3. Cutting winners too quickly
4. Revenge trades

These actions will kill your account!


Remember that your job as a newbie is to learn how to make good trading decisions and SURVIVE!
The best thing you can do to stay patient and disciplined is to look at your career as a trader as a marathon and NOT a sprint.

This is not an overnight, get-rich-quick scheme.
This is a commitment to build skills that will allow you to profitably trade in any environment the market will throw at you at any time.


If you stay patient, maintain discipline, and commit to constant improvement, then your results today as a noob trader will probably be nothing compared to the results of the trader you will become after years grinding it out in the markets.


Another thing…

Always remember that opportunities for good trades occur ALMOST EVERY SINGLE DAY!
No need to rush into bad trades. They will only set you back from reaching your goals.

Stick to your best ideas and setups, and if they don’t come that session, just wait for the next.
Unless the world stops then there will always be opportunities around the corner.



Good luck and good trading!
Cheers
Fadi

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Fadi View Post
It looks like you are focused on the Profits and not on the Process.
This is a big NO!

Please, focus on the Process, not on the profits
I repeat, stop thinking about the money, and focus on the process!


Of course you have to be patient, and stay disciplined. Everybody will repeat that to you, in sports, arts, science, trading or others.

But how can you be patient and stay disciplined? how?
The how for me is by focusing on the process and forget about the money...
Then comes:

1. Patience
The key to everything is patience. You get the chicken by hatching the egg, not by smashing it.

Developing your trading plan will take time. Developing skills will take time.
Waiting for the right trade opportunities requires patience. Entering and exiting a trade at the right moment requires patience.

2. Discipline
It is a virtue, and it means doing the things you need to do to progress and get better….even if you don’t want do it.

This means preparing for each trading day or week with research and chart study.
If you’re a mechanical or automated trader, this means back testing systems and constantly trying different settings and strategies as the environment changes.


And of course, don’t forget about keeping a trade journal and reviewing every single day you trade.
Journaling is the one trading task that separates the wannabe traders from the real deal traders. Unfortunately, most newbies won’t do it.


Let me tell you this:
Trading concepts and techniques are simple and easy to learn. What’s hard to learn is how to be patient and disciplined to do the right things and make good trading decisions. Truthfully, it will be one of the most difficult endeavors you will ever take on!

To a newbie, sitting on the sidelines and watching the markets move while you wait for your best setups means you’re missing out on profits.

BUT This way of thinking leads to a failure of patience and discipline and causes some of the most notorious trading mistakes:
1. Impulse trades
2. Letting losers run too long
3. Cutting winners too quickly
4. Revenge trades

These actions will kill your account!


Remember that your job as a newbie is to learn how to make good trading decisions and SURVIVE!
The best thing you can do to stay patient and disciplined is to look at your career as a trader as a marathon and NOT a sprint.

This is not an overnight, get-rich-quick scheme.
This is a commitment to build skills that will allow you to profitably trade in any environment the market will throw at you at any time.


If you stay patient, maintain discipline, and commit to constant improvement, then your results today as a noob trader will probably be nothing compared to the results of the trader you will become after years grinding it out in the markets.


Another thing…

Always remember that opportunities for good trades occur ALMOST EVERY SINGLE DAY!
No need to rush into bad trades. They will only set you back from reaching your goals.

Stick to your best ideas and setups, and if they don’t come that session, just wait for the next.
Unless the world stops then there will always be opportunities around the corner.



Good luck and good trading!
Cheers
Fadi

hi, i think this post is fantastic and i agree 100%
i think you need to go sim, and journaling and we talk again in 3 month, 6 month, 1 yr, ,,,when you can say, i got it
one thing more, i recommend strongly do not scalp, and go for nice points, (i do not know what you are doing), and use big stop to let the market move

good luck

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  #22 (permalink)
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Fadi View Post
It looks like you are focused on the Profits and not on the Process.
This is a big NO!

Please, focus on the Process, not on the profits
I repeat, stop thinking about the money, and focus on the process!


Of course you have to be patient, and stay disciplined. Everybody will repeat that to you, in sports, arts, science, trading or others.

But how can you be patient and stay disciplined? how?
The how for me is by focusing on the process and forget about the money...
Then comes:

1. Patience
The key to everything is patience. You get the chicken by hatching the egg, not by smashing it.

Developing your trading plan will take time. Developing skills will take time.
Waiting for the right trade opportunities requires patience. Entering and exiting a trade at the right moment requires patience.

2. Discipline
It is a virtue, and it means doing the things you need to do to progress and get better….even if you don’t want do it.

This means preparing for each trading day or week with research and chart study.
If you’re a mechanical or automated trader, this means back testing systems and constantly trying different settings and strategies as the environment changes.


And of course, don’t forget about keeping a trade journal and reviewing every single day you trade.
Journaling is the one trading task that separates the wannabe traders from the real deal traders. Unfortunately, most newbies won’t do it.


Let me tell you this:
Trading concepts and techniques are simple and easy to learn. What’s hard to learn is how to be patient and disciplined to do the right things and make good trading decisions. Truthfully, it will be one of the most difficult endeavors you will ever take on!

To a newbie, sitting on the sidelines and watching the markets move while you wait for your best setups means you’re missing out on profits.

BUT This way of thinking leads to a failure of patience and discipline and causes some of the most notorious trading mistakes:
1. Impulse trades
2. Letting losers run too long
3. Cutting winners too quickly
4. Revenge trades

These actions will kill your account!


Remember that your job as a newbie is to learn how to make good trading decisions and SURVIVE!
The best thing you can do to stay patient and disciplined is to look at your career as a trader as a marathon and NOT a sprint.

This is not an overnight, get-rich-quick scheme.
This is a commitment to build skills that will allow you to profitably trade in any environment the market will throw at you at any time.


If you stay patient, maintain discipline, and commit to constant improvement, then your results today as a noob trader will probably be nothing compared to the results of the trader you will become after years grinding it out in the markets.


Another thing…

Always remember that opportunities for good trades occur ALMOST EVERY SINGLE DAY!
No need to rush into bad trades. They will only set you back from reaching your goals.

Stick to your best ideas and setups, and if they don’t come that session, just wait for the next.
Unless the world stops then there will always be opportunities around the corner.



Good luck and good trading!
Cheers
Fadi

Excellent post... Thanks Fadi !! I have read this like 10 times by now... took a print out and pinned it to my desk

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Hyderabad, India
 
 
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alejo View Post
hi, i think this post is fantastic and i agree 100%
i think you need to go sim, and journaling and we talk again in 3 month, 6 month, 1 yr, ,,,when you can say, i got it
one thing more, i recommend strongly do not scalp, and go for nice points, (i do not know what you are doing), and use big stop to let the market move

good luck

well said alejo. I was doing some analysis on the trades taken over the last 3 months and these 2 things came out pointing finger. "Took many Un-neccessary trades" and "Didn't skip the trades which had wider stops wit the fear of loosing out on profitable set up."

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  #24 (permalink)
Hyderabad, India
 
 
Posts: 9 since Oct 2014
Thanks: 36 given, 13 received

Greetings.. Everyone !

aite.. so hv been doing great.. just didn't get time to come back to this forum wid lil hectic schedule over last 2-3 weeks

Took some really nice trade in controlled way some decent profits over the last 2 weeks.

Registered for forex demo acc for some practice.. will try to post charts nd reasons for trades here

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goa india
 
 
Posts: 11 since Jun 2014
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manishchan View Post
Thank you very much guys ! Appreciate the responses !

Over this weekend, I have been going through a loads of articles and youtube videos and have noted down some really nice things. Gotta work on them over the next few days/weeks.

Sirji what were the things u noted , pls share with us.

thank you

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futures io Trading Community Psychology and Money Management > Unable to follow my rules and result is string of losses. How to break this habbit ?


Last Updated on November 28, 2014


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