Mike is absolutely right, here. Many of us probably created our own issues from early bad habits and become paralyzed by fear, even though we have proven our methods work (once we stop changing things every 5 seconds). Just remember, if you have a plan that's been successful over the course of 100 trades in SIM and you have a checklist of what you're looking for and write it down for every single trade, it will make life a lot easier and less stressful.
For me, I even have stuff like, Are you jumping in willy-nilly because you're afraid of missing out? YES NO.
Did you notice a divergence and ignored it? YES NO
A previous checklist I had that involved points for various trading behavior listed: Type of Trade: 10 points if it was the trade setup I'm supposed to be taking. "Just feel like trading, even though there's no reason" 0 points. "Just jump in any old place" 0 points. It's really hard to take a wrong trade if you force yourself to check-off stuff like this. Who wants to admit they don't have a reason or are jumping in any old place?
In another section of my check-sheet, it had a list of emotional triggers that occurred during the trade. I got 5 points if there were none. The triggers I listed were: Concerns over profitability for this particular trade, concerns over profitability for the day/week, excitement over anticipated profits, worry that I'm not a pro.
Under reason for exit: if my proper exit criteria occurred, I got 10 points. But, Panic was on the list too, and that was 0 points of course.
I'm just saying if you have a list with the bad behavior and the desired behavior in front of you, you have a better chance of choosing the right thing. Better, not absolute. Were there times that I chose "Panic" as my exit criteria? Yes, and I paid the price for that over and over by limiting my profit. But, thankfully, I acknowledged my downfall and made an attempt to correct it.
The following 5 users say Thank You to tmmaggi for this post:
Ok, I think a huge part of the mental stuff is self talk. This sounds hokey but in truth, we are what we say. If you have a lot of negative self talk, guess what, you are verbally programming yourself for more failure.
Instead of saying, "I am terrified to trade live", say, "I have a great entry system". (one thing here, if your system does not have an EXIT as well as entry signal, you dont have a trading system). "I have proven sim stats that tell me I have a winning system", etc. For every real negative, find a positive to take away from it. For instance, this last month I had a bunch of losers. Not good right? But the real take away was this, prior to August, I had terrible time pulling the trigger. I was gun shy. I partially overcame this in May but still it was really hard to go from sim in June and July to real money in August. But over the course of the month, I took 75 trades, many were small losers. But toward the end of the month, I discovered I no longer had the jack hammer heart beat or shaky hands when entering a trade. So the negative was the losers but the positive is this; I still have money in my account and I got over the gun shy part of my trading.
I think a lot of my losers were in fact due to being gun shy. I would enter trades late and because the stop that should have been placed at say 8 ticks away now had to be placed 18 ticks away I became really nervous and so because of that, I would put the stop somewhere that was within my comfort zone. Of course those got hit all the time because I was gun shy and entered late.
Now I've learned and am learning to be much faster on the entry and the stop goes in the right place and guess what, now the trade is comfortable and I can actually think about the trade as it progresses. This would not have been possible without all those little losers last month. I learned to be faster and I got over the jack hammer heart at the same time.
So spend time this week on the positive. Analyze the negative but with an eye toward what you can bring out of it that is positive. And really pat yourself on the back when you do something right.
One last thing, at some point, make a commitment to never trade sim again unless its to learn a new trade set up or develop an edge if you lose your current one. Otherwise you'll just go back to sim every time you get scared. @jagui wrote in my journal that sim only tests 5% of the system since the man behind the system is 95% of the system. Only real money tests 100% of the system.
Simplicity is the ultimate sophistication, Leonardo da Vinci
Most people chose unhappiness over uncertainty, Tim Ferris
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My risk tolerance is low and I trade within that: In the past, No I did not. In the past (starting out) I have traded with no Profit Targets or Stop Losses (lol). Looking back it was silly mistakes that I have learned from . . . But don't you guys ever take a trade and when it goes sout (whether it is 2 ticks or 200 ticks) you just think to yourself: "I don't believe I was wrong!"
I guess being a woman, I hate being wrong
Last edited by nillz123; September 14th, 2010 at 05:58 AM.