What do you do to stop overtrading / manage trades?
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What do you do to stop overtrading / manage trades?

Psychology and Money Management

Created June 20th, 2019 by muis2
Updated today by kareem40
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What do you do to stop overtrading / manage trades?

  #11 (permalink)
Vancouver + Canada
Posts: 5 since May 2019
Thanks: 0 given, 4 received

Wernersabel View Post
Unfortunately this is where the hard work starts. I can recommend working on the mental skills. This is about finding triggers that lead to the things you see yourself "forced" to do. Finding them is not easy I can forward you some stuff I recently have been given, please let me know your e-mail. Getting a mental coach can also have a very positive on ones trading. But in the end it is only you who can change you. I have been told the mental stuff is where about 90% of retail trades fail so I guess all of us have to address that at some point in time.

What I would do is switching to SIM and do proper self evaluation on your trades. If you have an edge and you are able to execute that edge with the confidence needed you will succeed if you are willing to put in the hard work. If you do not have an edge you may want to attend that first.

very interesting topic and good luck for your journey.


mind if you send me a PM? It says I haven't been active enough in the forum to send PMs yet... - still very new to this forum :0

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  #12 (permalink)
Georgia USA
Trading Experience: Beginner
Platform: NT8
Broker/Data: Continuum
Favorite Futures: ES
JMoniker's Avatar
Posts: 25 since Jul 2018
Thanks: 47 given, 49 received

Take what my post says with a grain of salt as it is only what has improved my personal trading on days like the ones you mentioned. How I react on these days is a bit different.

Stop Placement: Let's say I am long and my stop is 3 points away. Am I willing to go short there at my stop if it gets triggered? If my answer is yes, then my stop is valid because if I am willing to go short there, that means my long bias gets invalidated there. To me, that is a good stop. But if my answer is no, then I am trading my P&L and my entry was too early and I simply cannot afford to scale in and play the whole zone. I don't enter on horizontal price levels such as "I will enter at $2960 and $2960 must hold with a 3 point stop!!!". For example, I will do 2950 - 2960. So long as it is within this ten point range, I am happy to stay long. If I am not willing to go SHORT at 2949, then that means I am STILL bullish, which then means my zone SHOULD have been 2940-2950 instead. This is how I avoid getting stopped out. The second is that especially with ES, there are giant shakeout candles ALL the time that don't have any follow through. You know, those candles that are as long as your finger that appear out of nowhere and then completely erase itself back down. I've seen too many of them and now when they appear I just giggle instead of having a heart attack. This again goes back to playing zones, not specific prices. A three point stop means nothing to anyone except me. It has nothing to do with anything. I go long if my stop is where I would go short, that's the simplest way I can put it. To summarize, if I can't afford the zone, then I can't play. Period. Watch your instrument. When ES goes vertical into resistance, with the momentum of the speed of sound, I've seen it get slapped back down at the speed of light just as viciously. It loves to move quickly and trap traders. Another tactic to is enter where your stop WOULD have been, given that your bias is still valid there. (i.e Wyckoff Spring). Price doesn't move in just one direction and price doesn't have to go up immediately just because I happened to go long. I always try to remember this.

String of Losers: Again, this is how I personally look at this so take it with a grain of salt. I only trade ES and here is what I know to be true for MYSELF about ES. It is always within a range. When it is trending, it is within a range. It's been inside a range for two years (daily chart). You'll find an infinite amount of ranges within ranges as you go down the time frames. What looks to be an uptrend is only retracing a prior leg up towards the top of yet another range. Knowing this, I tell myself very simply: buy low and sell high. Know the current range. Do not trade the MIDDLE of it. You may buy the bottom of it and sell the top of it. Stop taking trades that you KNOW have very little reward. You know those ones where you KNEW it wasn't gonna go very far? Every single trade can hurt, even the small losses. I stopped putting on little "playful trades" or "feeler" trades. This last bit might be a little controversial but I don't quit if I've had X number of losers in a row. If a setup is there I'm taking it. For me, if I have three losers in a row and I quit, this is extremely damaging emotionally. My anxiety is high, I can't sleep, and I feel terrible when I come back the next day. There's a fine line between revenge trading and going crazy trying to make your losses back but what I do is, I look at every trade separately. Those three trades I lost in a row, I learn what I need to, and move onto my next setup if there is one. There have been many days where I would lose three times in a row then make back all of it and more on the next trade. Again, ONLY IF a setup is there. As you read into Mark Douglas, you'll notice he's a huge advocate of taking EVERY setup you see, not just ones because you're in a good mood or feel particularly optimistic that day. If I'm getting chopped up on a choppy day, then I failed to realize it's a sideways chop day. Once I realize what it is though, I get back in. People can trade chop. People do. I said I wanna learn to trade it. Get back in when you get a grip on what's going on. Because I know you've had days where you quit and then watched it do exactly what you thought it would and then your soul shrivels up. Micro contracts are available so trade those if that will enable you to dust yourself off and get back in.

Itchy Finger: You'll get rid of this when you've lost enough money from taking "playful" or "feeler" trades. To me, this particular finger has not experienced the WRATH OF FIRE AND THE MOURNFUL WAIL OF DYING DREAMS and..sorry I got carried away. It'll fix itself in time. You don't have to let it teach you that lesson though. You can change that now.

In conclusion, I just really want to drive home this last bit. I don't have a job outside of trading anymore, it's my sole source of income. I have no family, wife, kids, etc. I have time to stare at my instrument all day, which is ES. It's all I did for two years as I busily went from being six figures before starting to trade to six nickels to rub together for warmth. You have to really know your instrument almost like it's a person. I refer to ES as "him" in my journal. I know his personality, his characteristics, his habits, and his moods. I spent 10 hours a day for two years getting to know him. There were days where my legs would get white splotches and my feet turned purple from sitting so long at my desk. My knees ache on rainy days and I still have weird discolorations on my legs. But say for example I pull up a chart of CL. All of my supposed "technical skills" I gained while pretty much getting diabetes go out the window. As I skim through the charts and varying time frames, I can see with my eyes that none of my setups would have worked. This is where I feel I have an edge, only in ES. I can't even trade NQ. Again, I just don't get it. The price action even though it's supposed to be so similar to ES, doesn't speak to me. The way NQ's candles print makes my head explode. But there are people who say the same about ES. So whatever instrument you're trading, get to know him really well and you'll be able to see when he's feeling flirty hunting for stops or algos are going up 10 points and then dropping ten points right after each other or he's breaking out.

P.S - For me, and maybe only me, my P&L actually got better when I stopped placing manual stops. Obviously I'm not going to let it run 50 points the other direction, but those tight little 3 point, 2 point stops were really chewing me up. I'll sign off with one of the most basic but earth shattering pieces of advice I ever got: "In a bull market, prices being rejected at resistance is not bearish. Support levels not holding is". Laugh if you want, this changed everything for me. Good luck!

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  #13 (permalink)
Bluffton, SC
Trading Experience: Intermediate
Platform: TOS
Favorite Futures: Equities, Treasuries, Gold
mtzimmer1's Avatar
Posts: 483 since Dec 2018
Thanks: 1,069 given, 1,039 received

I have stretches of time with great discipline to my trade plan, interspersed with bursts of emotion-driven trading. This is what I have been doing recently to address the problem:

-Review my trade plan every morning. (Reinforce my rules and principles.)
-Listen to background music that is interesting but not distracting. (Helps keep me away from boredom trading.)
-Taped a note reading ďadhere to your rulesĒ to my screen directly beneath my trading ladder.

So far it seems to be helping. I hope that at least one of these ideas holds value for you!

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  #14 (permalink)
Seattle WA
Trading Experience: Beginner
Platform: IB TWS, MC.NET, CQG
Broker/Data: InteractiveBrokers, Optimus/AMP
Favorite Futures: NQ
Posts: 125 since Jun 2017
Thanks: 23 given, 198 received

Things that have worked for me, a series of rules that somewhat built on top of each other, just in case..

1) Plan to only make ~3-4 trades a day. Ask yourself, is this one of the best setups. Keeps me from trading in tight channels when a case of FOMO kicks in. Sure, I miss some trades this way...

2) Not allowed to take any more trades if P&L is negative a specific amount.

3) Set profit and stop orders with entry, walk away for at least 30 minutes, but dammit I try to make it an hour. Canít trade if youíre not sitting at the screen, and if youíre only looking every hour, then you canít trade too much in the run of a day.

4) If Iíve exited 2 trades at market, cancelling the profit or stop, then close the platform for at least an hour. Iím not in the right mind frame for the day, and unwilling to accept the risk.

Of course, like everyone else, I donít always follow my own rules and typically regret it...

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  #15 (permalink)
Lisboa, Portugal
Trading Experience: Beginner
Platform: eToro, Plus500
Favorite Futures: Currency, Commodities, ETF
Posts: 9 since Feb 2018
Thanks: 26 given, 11 received

In my specific case, I found that:
- i need a strict plan for trading with specific hours, setups and position side;
- i need to set a max number of trades per day and week and keep to it. The less the better.
- It has been a journey of self-development towards discipline and I found out that I had to change other non-trading related behaviour in my daily life (such as ensuring good and enough sleep, nutrition and exercise) to be at my best and most rational when trading.
- I have also initially focused on a smaller number of instruments (for about 2 years) and then, slowly start to increase diversification
Hope it helps!

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  #16 (permalink)
Legendary Market Wizard
Portland, OR
Trading Experience: None
Massive l's Avatar
Posts: 1,905 since Mar 2011
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muis2 View Post
Can you clarify what you mean by program? Do you mean have pre-set Entry, SL, Targets before the day begins and only trade those?


Sure! I mean code your strategy so markers show up on your chart when to enter and when to exit and follow them. It helped me tremendously. I see the signal pop up I enter. I see the exit, I exit.

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  #17 (permalink)
Vancouver BC Canada
Posts: 4 since Jun 2015
Thanks: 6 given, 11 received

I also had an itchy trigger finger at one time. Here's what I did.

I compared entering a trade to driving a car. I'm a good driver. I don't take unnecessary risks that might get me into a bad situation, but at the same time I can act decisively in traffic. Why should the mindset for entering/managing a trade be any different?

I picture my loved ones in the back seat as I enter a trade. It keeps my mind in the correct "flow" and "state". That I am taking an action that must be done soberly and without hesitation at the correct time. If I miss my chance my only choice is to wait for the next legitimate opportunity.

Hope that helps.

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  #18 (permalink)
Trading Experience: Advanced
Platform: NinjaTrader
Broker/Data: NinjaTrader/Continuum, IB
Favorite Futures: ES
Posts: 64 since May 2012
Thanks: 91 given, 125 received

I would say:
- Meditate to stay calm, focussed and in the now.
- Make rules and focus on the process, specially focus on following your rules (learn from mistakes). Try to be a bit better everyday (that is make less mistakes, less violation of your rules).
- Trade smaller (less leveraged) so you can set a wider stop.

Good luck!

Last edited by Mich62; June 27th, 2019 at 10:45 AM. Reason: Typo
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  #19 (permalink)
Toronto Canada
Posts: 1 since Mar 2014
Thanks: 5 given, 1 received

It helps to have stalk zones according to a plan that has been proven to have a higher probability of success, on one key chart. The stalk zone need not be a well thought-out one, because it takes a lot of experience for that. They could be moving average cross-overs or even the benign MACD. This allows only one trade.
After you have taken it and closed it, just switch from Live to Sim or Paper trading and keep your itchy fingers busy, if you have to. But deliberately avoid doing it in the paper/sim too. Some platforms have an option to lock trading. Exercise this option. Switch back to live only when you see the market approaching the next stalk zone.
Always keep telling yourself that you are doing this to save your capital, and not to really make profits. The former is more important.
And as regards Stop losses, having clear stalk zones helps. Stops go clearly above the zone if you are selling; and below the zone if you are buying. Sometimes it helps to have a hard limit order stop than a trailing stop.

Hope this helps ...

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  #20 (permalink)
Bishop, CA
Trading Experience: Intermediate
Platform: NinjaTrader
Favorite Futures: ES, CL, ZB, GC
Posts: 1 since Jun 2018
Thanks: 0 given, 1 received

Mental Game of Poker

The Mental Game of Poker is a book I'd recommend for working on what poker players call tilt, I found it highly relevant for trading. For instance, I sometimes struggle with mounting frustration when I get a series of "bad beats", touch but no fill, one tick front runs etc. So in that book it'd be referred to as entitlement tilt, so b/c I feel like I called the price pivot but didn't get to capitalize on it I get frustrated. But in any game of variance this is to be expected, getting frustrated and then chasing price or taking invalid set-ups as a way to get what I deserved doesn't set me up mentally or emotionally for when the market variance plays in my favor. There are a whole bunch of common tilt issue he delves into, revenge tilt, fear of losing tilt etc.

My 2 cents, hope it helps.

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