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Not taking trades because the setups seem too obvious


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Not taking trades because the setups seem too obvious

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  #1 (permalink)
 markus3500 
Cleveland OH
 
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Every time I find and learn a detail or a way of looking at the market that helps me in my overall trading environment, over a given amount of time I start to feel that these setups seem too obvious and that everyone can see them. Because of that I stop taking the trades, I feel, well hell, I easily saw that coming and I am sure that others have too, so I talk myself out of the trade to avoid any traps. I use a combination of Cumulative Delta /Profiling, Midas and order flow which is obviously readily available to anyone. I am really good a reading CD charting thought which I know a lot people don't necessarily use. Sometimes I have to remind myself that I knew nothing of this years ago...

Anyone else go thru these frustrations? How have you overcome them?

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 xplorer 
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markus3500 View Post
Every time I find and learn a detail or a way of looking at the market that helps me in my overall trading environment, over a given amount of time I start to feel that these setups seem too obvious and that everyone can see them. Because of that I stop taking the trades, I feel, well hell, I easily saw that coming and I am sure that others have too, so I talk myself out of the trade to avoid any traps. I use a combination of Cumulative Delta /Profiling, Midas and order flow which is obviously readily available to anyone. I am really good a reading CD charting thought which I know a lot people don't necessarily use. Sometimes I have to remind myself that I knew nothing of this years ago...

Anyone else go thru these frustrations? How have you overcome them?

What happens after you don't take those obvious setups? Do they end up working or not, for the most part?

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 markus3500 
Cleveland OH
 
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xplorer View Post
What happens after you don't take those obvious setups? Do they end up working or not, for the most part?

For the most part they work out, which is why it makes this so frustrating. Not to mention the "why didnt I just take the trade according to plan" floating around in my head afterwards...

To me they seem obvious... they may not be. I trade alone with no circle at all....

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 ratfink 
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markus3500 View Post
Anyone else go thru these frustrations? How have you overcome them?

1) Yes, often. Born of years of being whipped both ways and now always looking for the tricksy bitch to do it again.

2) No, not yet, and won't until I fully accept the risk on each trade that presents itself within my system metrics.

Just keep digging away, like you say a few years ago we know nothing..

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 tpredictor 
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You need better way to qualify this. You might or might not be on to something. I mean if you quantify or at least qualify you could test. There is a cone of uncertainty after any trade is entered. So, you need some measure of confidence whatever you are doing can work in order to accept the uncertainty. And, yes you can be sure that the "bigs" are going to be trading against you and any technical method you can think of. It might help if you know why it should work, when it shouldn't, etc. They won't be trading against you personally, of course. But, they will be trading against price. Really, you have 2 adversaries: the HFT which will be trading against you and often on similar information but with superior advantage and then you have traders who will be trading against price and have a fundamental or informational advantage.

But, you can also suspect that any edge is already traded by at a minimum by other hedge funds. But, if you cannot qualify it then you probably should simplify and eliminate such thoughts as it will just be a distraction. Simple answer, if you can qualify it then track it and see how it works. If you cannot then you are just spinning your wheels so to speak: it is going to take you out of market centric focus. Also, that type of self-talk is unlikely to help. It is better to try to focus on the market. You can have an intuition or confidence certainly but it should be based on observable data.


markus3500 View Post
Every time I find and learn a detail or a way of looking at the market that helps me in my overall trading environment, over a given amount of time I start to feel that these setups seem too obvious and that everyone can see them. Because of that I stop taking the trades, I feel, well hell, I easily saw that coming and I am sure that others have too, so I talk myself out of the trade to avoid any traps. I use a combination of Cumulative Delta /Profiling, Midas and order flow which is obviously readily available to anyone. I am really good a reading CD charting thought which I know a lot people don't necessarily use. Sometimes I have to remind myself that I knew nothing of this years ago...

Anyone else go thru these frustrations? How have you overcome them?


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 Silver Dragon 
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markus3500 View Post
I start to feel that these setups seem too obvious and that everyone can see them. Because of that I stop taking the trades, I feel, well hell, I easily saw that coming and I am sure that others have too, so I talk myself out of the trade to avoid any traps. .

Anyone else go thru these frustrations? How have you overcome them?

You mentioned traps.. this is fear of being wrong or not wanting to make the commitment to take the trade. Basically you are afraid of losing today. You need to get past today and look to the future. I recently overcame this. I actually get to quote myself here. How often does that happen!?!


Silver Dragon View Post
One of the struggles most traders (including myself) is committing to a trade. The fear of being wrong over powers the will of clicking the submit button. When I started trading again, I made it a goal to overcome this. Remembering its all physiological I searched for a way to reprogram my brain. This is what I have come up with.

Schrödinger's cat - If you are into physics or watch the Big Bang Theory then you know what this is. Here is the Sheldon version - Schrödinger purposed an experiment of placing a cat in a box with a sealed vile a poison which would break open at random time. To an observer of the box, the cat can be thought of as alive and dead at the same time since you wont know for certain of the outcome utill the box is opened. So, a trade can be thought of in the same way; its both winning and losing at the same time. You wont know for certain of which until you take the trade!

I picked this one up from a book or a blog. I dont think about the trades I am making today but rather all the winning the trades I will be making in the future. This one works for me because the future has no set date. It could be next week, next month or next year. In any case, it releases the worry of making a bad trade today.

Robert


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 mmatlios 
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The reason is to do with your psychology. Have a look on the internet for Mind Muscles by Rich Freisen.

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 mmatlios 
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mmatlios View Post
The reason is to do with your psychology. Have a look on the internet for Mind Muscles by Rich Freisen.

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Also this book might help... https://read.amazon.com/kp/kshare?asin=B075Q49QPX&id=xekm-kalTImHVc7SYp5z3A

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 markus3500 
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I appreciate everyones input on this. I know this is a demon to be dealt with from within... reasons one gives themselves not sticking to the plan thats laid out for fear of failure. Just wanted to get it out there and see what others think...

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 xplorer 
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markus3500 View Post
For the most part they work out, which is why it makes this so frustrating. Not to mention the "why didnt I just take the trade according to plan" floating around in my head afterwards...

To me they seem obvious... they may not be. I trade alone with no circle at all....

One way to look at it: they may be obvious to you, but how many people trade with your exact chart settings? I.e. not everyone looks at the same timeframe, indicators, etc. and, even if they did, everyone looks at the same things with different eyes and targets. What might be an edge for you might be invisible to me and viceversa.

Also, if these setups work out for the most part it means, as you said, the issue is purely psychological. I think it's great, because that means you already identified what to work on.

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 mmatlios 
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markus3500 View Post
I appreciate everyones input on this. I know this is a demon to be dealt with from within... reasons one gives themselves not sticking to the plan thats laid out for fear of failure. Just wanted to get it out there and see what others think...

Spot on. Now you know what causes it. Try downsizing and trading micro lots to gain some confidence.

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 mmaker 
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I also think of it like this....

Think of yourself as the casino. Your particular system/setup that you have back tested has an edge, either by percentage or by payout. Since you have back tested it you know it works in the long run (in the future). On average it is going to pay you to play.

The very next trade does not matter. Your system is not built on what will happen in the very next trade. Your system is built on what will happen over a series of trades.

So why wouldn't you play that game? As long as you follow your rules/process - take the trades.

In the long run over the course of several trades your edge will show.

Take 10 trades and record the results.

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