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How does one deal with FOE (Fear of Entry)?
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How does one deal with FOE (Fear of Entry)?

  #11 (permalink)
Elite Member
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My take on fear and regret


johny1971 View Post
Has anyone else dealt with the fear of entering trades and experience the following ruminations? If so, how did you remove that fear?

Seriously, the way I deal with fear of entry is through automation. Even when I know instinctively that an entry may be 'bad', I let the system take it if the rules are in place. I use the system because my instinct is influenced by my beliefs, background, etc. In other words, my instinct is flawed.

I know some people will meditate or mentally rehearse how they will trade. I don't exactly meditate in a true sense, but I do mentally rehearse what I'm going to do. I know meditation works and so does mental rehearsal.

If my machine makes a mistake, it is because of a data issue, connection issue, volatility issue, or I have an error in my code. When something doesn't work, as happened yesterday (see: $400 Lesson and a New Couch, I just assess the problem and try not to repeat.

My partner keeps a little sticker on one of her monitors. It is simply a date to remind her. The date she didn't place a stop loss. I think you can imagine the rest.

If you practice enough, you eventually become numb to the fear of loss. It doesn't mean that I don't get angry or annoyed when a trade goes bad ("my stops/exit suck", "the amateurs are ruining everything", "the president's tweet cost me $nnn", "blah blah blah"). We are only 33% successful in our trading, but still profitable. We have endured losing streaks of 10+ trades, but have kept trading because we know our systems work over the long run (and good money management). It is a matter of accepting loss it as part of the process and working through the fear. Because the trade you don't take because of fear is the trade that makes your month/year.

I hope this helps.

~vmodus

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  #12 (permalink)
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johny1971 View Post
Has anyone else dealt with the fear of entering trades and experience the following ruminations? If so, how did you remove that fear?

I am trying to get to the next level of success and the obstacle in my way is the fear to enter trades. I will rely on personal patience and rules to get me through this obstacle. Why do I not enter trades? Fear of loss of things that are ego and money. I must let these things go to move through the obstacle. I will decide to enter trades. I will decide that the outcome does not reflect on me. I will decide to trust rules. I can control how I function. I can control my decisions and follow through on those decisions. Today I will watch market with rules in my head. I will wait for rules to highlight a set up. I will enter set ups. I will not evaluate myself or account. Trading is not about me.


I'm a discretionary trader, trading the ES as well.

After transitioning from sim to live I also experienced fear at the moment entry was to be made. It was mild at first, grew worse, then began subsiding. At its worst the fear caused me not to pull the trigger on some good trades. In those cases watching the trades play out, seeing the potential they had, realizing I forfeited that profit due to fear was, in itself, a part of curing my fear of a stop loss.

Additionally, I paid attention to weak areas in my trading plan that I was able to perceive after going live. For each of these I would go to replay and specifically work on improving/eliminating the revealed weakness.

I like trading the ES very much, though it is a demanding instrument. Patience and discipline are essential. Entries must be well planned and well timed. Stops have to be fairly tight. Trade management is extremely important (it's what helps us capture some larger moves, thus reducing the significance of typical stop losses). If you lack confidence in any of these key areas this will cause your fears to increase. As necessary take time to tighten up everything that needs tightening.

One exercise I did for a couple of days after having gone live (realizing I was experiencing too much fear) was to enter and manage trades only in my mind (probably 1 to 3 trades each day). My charts were live, but I entered no live orders. Instead I took the trades in my mind, noted the exact price of each entry, then managed them step by step to exit (if I was fortunate enough to have something to manage). I don't know why but something about that exercise helped me quite a bit. On the next day of live trading I was more relaxed. My fear was not gone, but was noticeably reduced.

You mention "ego" in relation to "fear of loss". Work on separating in your mind the wise use of a stop loss from any concept of "losing", or being a "loser". These are entirely unrelated things. The best traders in the world use stop losses effectively, unflinchingly and without any sense whatsoever of personal failure or regret. On the contrary, prudent stop losses are one of the most empowering tools there is for helping good traders make lots of money.

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  #13 (permalink)
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Inner Dialogue



Gedman View Post

You mention "ego" in relation to "fear of loss". Work on separating in your mind the wise use of a stop loss from any concept of "losing", or being a "loser". These are entirely unrelated things. The best traders in the world use stop losses effectively, unflinchingly and without any sense whatsoever of personal failure or regret. On the contrary, prudent stop losses are one of the most empowering tools there is for helping good traders make lots of money.



@Gedman - I am taking in what you wrote and it is helpful. I am a little stuck on this last bit. I am asking because inner dialogue is essential to managing emotions and I want to be sure I fully understand your thought. If stops are not to be associated with "losing" or being a "loser", what then would the replacement words be. As typing this, I considered the word "winner", but that seems vague and out of context to what you wrote about, i.e. it seems best to have inner dialogue that is actionable and, so, it gets results. I totally agree that stops are prudent and just the way business is conducted, but my feelings aren't seeming to embrace this as well unless I communicate it to them differently.

Thanks and, btw, your process seems familiar - identifying the issue and taking phantom trades in a live environment.

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  #14 (permalink)
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johny1971 View Post
@Gedman - I am taking in what you wrote and it is helpful. I am a little stuck on this last bit. I am asking because inner dialogue is essential to managing emotions and I want to be sure I fully understand your thought. If stops are not to be associated with "losing" or being a "loser", what then would the replacement words be. As typing this, I considered the word "winner", but that seems vague and out of context to what you wrote about, i.e. it seems best to have inner dialogue that is actionable and, so, it gets results. I totally agree that stops are prudent and just the way business is conducted, but my feelings aren't seeming to embrace this as well unless I communicate it to them differently.

Thanks and, btw, your process seems familiar - identifying the issue and taking phantom trades in a live environment.

If imprudent stops are used, or no stops at all, a trader may experience large losses, margin calls, or even a catastrophic loss. By using prudent stops (mine run in the 1.5 to 3 point range, depending on circumstances, with most around 2 points) a trader has a safety net, protection, the freedom to put on a position with a certainty that the trade will not harm him financially.

Perhaps another way to look at it would be to consider where we would be if we could not attach stops to our orders, but rather had to manually close out trades when they don't perform as expected. In this scenario we would face all kinds of (serious) risks that we do not have to even think about now, simply because we can and do place stops with our entry orders. From this perspective stops may legitimately be seen as one of our most important trading tools.

Not sure any of these will click, but perhaps something along the line of "safety", "protection", "capital preservation", "risk avoidance" or "risk limitation" and even "freedom". We have the freedom to put trades on at will because we are able to limit our risks to a non-painful level by using prudent stops.

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  #15 (permalink)
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Great advice

Mark Douglas basically says to not depend on ONE SINGLE TRADE, rather focus on the success of 20 trades. This is due to the fact that your EDGE will not work every time and that you should evaluate your EDGE with a SERIES OF TRADES to evaluate the effectiveness of the strategy.

As of March 2019, I am investigating Interactive Brokers "iBOT" technology for execution. It is a Voice Command interface that allows you to use a HEADSET to enter and exit trades ( gets rid of the time / shaking when uising a mouse).

I agree with the above advice about having confidence in your strategy, If you have tested your strategy out with sim trading, you will find it easier to trade.

Another tip : Switch to the mini DOW / mini SP since they are only 5$ per tick; wont freak you out as much when it is running against you.

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  #16 (permalink)
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chemfan76 View Post
Another tip : Switch to the mini DOW / mini SP since they are only 5$ per tick; wont freak you out as much when it is running against you.

Great point. I trade the Dow e-mini precisely for the reason you mentioned, as we bootstrap ourselves starting with a small account and one contract, then scale according to account size.

Now that the CME is rolling out micro-mini contracts in May, the barriers to entry for the 'lightly capitalized' traders is even lower.

~vmodus

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