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Really afraid to trade?


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Really afraid to trade?

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  #1 (permalink)
 nillz123 
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OK. So I know there has been a thread about fear and greed . . . what advice would you give to someone who loves to trade but is deathly afraid to trade LIVE because of previous losses. How do you ever regain confidence from losses?

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 jagui 
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Reduce size, start small, do max 2 trades per day, until you rebuild confidence.
Understand that losing trades are part of the game, but LOSSES are not: you MUST always have some rules in place to avoid losses (that is, to preserve your capital, both financial and mental). If you have good rules, a loss will never happen.

Such rules would be as these:

  • stop for the day if you lose more than xxx
  • stop for the week if you lose more than yyy
  • stop for the month if you lose more than zzz

If you're really afraid, you can always live trade spot forex at 10 cents/pip.

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 TraderJesse 
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Hey nillz123:

To add to Jagui's comments,

1. Do you have a plan? If not, get one.

2. Can you constantly follow the rules of you plan and make money in SIM mode over a 1-3 month period?

3. If not, do not trade live and waste your financial and emotional capital. Continue in SIM strictly following your plan just as if it were real money.

4. Once consistently profitable in SIM, then move to live money and use small share or lot size per Jaqui suggests.

Good luck..

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 bukkan 
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nillz123 View Post
OK. So I know there has been a thread about fear and greed . . . what advice would you give to someone who loves to trade but is deathly afraid to trade LIVE because of previous losses. How do you ever regain confidence from losses?

first and foremost accept the fact that losses (stops) are part of the game. losses/stops are also part of the setup/strategy and not be treated as failure. most folks (incl. me) dont accept the fact until its too late. unless you realize and accept this simple truth dont trade live.

calculate your risk. trade only if you could afford the risk/loss.

reduce leverage/size until you regain enough confidence.

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 George 
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Normally one is scared because he/she is afraid of loosing its account (hence the show will be over)!

So if you're afraid to lose your money, this is exactly what will happen, YOU ARE going to lose them!
If that is the case, you're either trading scary money, or you've managed to lose many, many times!

I suggest two things:

1. Find a way to get rid of trading scary money! and...
2. Turn all your loses to what they really are. A huge treasure, meaning that you, apart from many, many traders, have faced loses and have got your hands dirty.
Stop being afraid of that, and face them as what they really are. Nothing else than experience, that ought to be putting you in the front row. Why?; you know how to lose!

and 3 (this is a bonus)....find yourself a system, that gives you more good entry's than bad entry's.

We all struggle to make tomorrow look like yesterday!
Get rid of your past and let the future unfold from the now.
Past performance is not indicative of future results.
/George
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  #7 (permalink)
 tmmaggi 
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TraderJesse View Post
Hey nillz123:

To add to Jagui's comments,

1. Do you have a plan? If not, get one.

2. Can you constantly follow the rules of you plan and make money in SIM mode over a 1-3 month period?

3. If not, do not trade live and waste your financial and emotional capital. Continue in SIM strictly following your plan just as if it were real money.

4. Once consistently profitable in SIM, then move to live money and use small share or lot size per Jaqui suggests.

Good luck..


I agree wholeheartedly with this post. You are undoubtedly low on emotional capital, since you referred to previous losses. IF you've got a plan and can follow your rules consistently and you're trading small (like one contract), but you're still afraid, consider a very small profit target for a short while. I realize this is going to be very unpopular advice, but I have found it very helpful to ease back into trading with a small target. While it's true that this small target (such as 2 ticks in the ES) is probably violating your rules if you're practicing with a larger target. In addition, your stop will certainly be a lot larger that your profit target if you're only going for a couple of ticks. However, I too, have been extremely fearful in the past, having been battered and bruised, just like you. Getting out quickly with a small profit has really helped me. Is this a long term solution? No. But, you'll be able to dip your toe back into trading waters and rebuild your confidence. Later, you'll be able to hold on a bit longer. For example, when you get 4 ticks in your favor, you can move your stop to +1 tick to at least not have another loser. Again, there are certainly a number of people who will think I am crazy.

Definitely follow the advice of George, Jagui, and TraderJesse. If you've done all those things, try a small target.

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  #8 (permalink)
 jagui 
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tmmaggi View Post
IF you've got a plan and can follow your rules consistently and you're trading small (like one contract), but you're still afraid, consider a very small profit target for a short while. I realize this is going to be very unpopular advice, but I have found it very helpful to ease back into trading with a small target.


I think this is true. I occasionally do the same. For me these are just scalping trades, but I believe they could be useful to rebuild confidence.

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 Big Mike 
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I believe that if you are trading 1 contract and are still uncomfortable with it (ie "scared money"), then really it means you don't trust your method, or you are trading with money you cannot afford to lose.

Instead of funding a trading account saying "I am going to make some money by trading this account", you need to look at it as "I am going to pay my tuition and trading dues with this money. At some point in the future, I will fund my own trading account". If you gasp at this, then it means you are likely trading with money you can't afford to lose and you are also thinking that your going to beat the odds and make money before you've put in your 10,000 hours of trading time.

I've seen many traders try to go smaller and smaller to minimize risks. By this I mean they trade a tiny range chart, they have tiny stops, etc. They are doing this because they want to minimize risks, but really it works against them. Instead of making that mistake, you should consider going the other direction. Instead of scalping, start with swing trading stocks for 2-5 days at a time. Just buy 1 share or 100 shares or whatever, if you have to, don't worry about the $$ gain -- focus on the percentage gain.

The point is, keep the risk at 2% or less of your account size, so you feel very comfortable with it. The point is also that swing trading will slow things down for you, giving you an opportunity to absorb information and not feel you are caught up in the market (like a 5 tick stop that gets hit over and over and over again in futures).

Once you are comfortable enough with swinging stocks, you can either sick with stocks and start uping your position sizing, or you can slowly graduate to futures.

Mike

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 jagui 
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Big Mike View Post
Instead of funding a trading account saying "I am going to make some money by trading this account", you need to look at it as "I am going to pay my tuition and trading dues with this money. At some point in the future, I will fund my own trading account". If you gasp at this, then it means you are likely trading with money you can't afford to lose and you are also thinking that your going to beat the odds and make money before you've put in your 10,000 hours of trading time.

This is excellent advise.




Big Mike View Post
Instead of scalping, start with swing trading stocks for 2-5 days at a time. Just buy 1 share or 100 shares or whatever, if you have to, don't worry about the $$ gain -- focus on the percentage gain.

This is also good advice, but there could be a problem, depending on the trader's personality.
I did this and the problem for me was that I was not able to sit without a trade for several days in a row, a thing that you must be prepared to do, otherwise you'll take random trades. So the learning is slowed. This is a good thing for someone and a bad thing for others.

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 nillz123 
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tmmaggi View Post
I agree wholeheartedly with this post. You are undoubtedly low on emotional capital, since you referred to previous losses. IF you've got a plan and can follow your rules consistently and you're trading small (like one contract), but you're still afraid, consider a very small profit target for a short while. I realize this is going to be very unpopular advice, but I have found it very helpful to ease back into trading with a small target. While it's true that this small target (such as 2 ticks in the ES) is probably violating your rules if you're practicing with a larger target. In addition, your stop will certainly be a lot larger that your profit target if you're only going for a couple of ticks. However, I too, have been extremely fearful in the past, having been battered and bruised, just like you. Getting out quickly with a small profit has really helped me. Is this a long term solution? No. But, you'll be able to dip your toe back into trading waters and rebuild your confidence. Later, you'll be able to hold on a bit longer. For example, when you get 4 ticks in your favor, you can move your stop to +1 tick to at least not have another loser. Again, there are certainly a number of people who will think I am crazy.

Definitely follow the advice of George, Jagui, and TraderJesse. If you've done all those things, try a small target.


Great advice and thanks. I do great on SIM. i am consistent. Just I freeze up LIVE. I make excuses I think, telling myself today isn't a good day. I would SIM, then go live and then go back to sim 3 seconds before entering a trade . . . . and then it be a winner.

I speak to other traders. I know that trading is something that is learned not a natural thing you are born with so I know this is something I can learn.

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  #12 (permalink)
 nillz123 
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Also, as Mike said in one of his other posts, SIM seem SO different from LIVE trading.

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eminitrader
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nillz123 View Post
Also, as Mike said in one of his other posts, SIM seem SO different from LIVE trading.

Indeed it is, if it is thought that way. By that I mean, if someone had no care and only thought that sim and live are the same, then their feelings will be the same to either or. But when you have that feeling of "ohh man this live now," that feeling turns into your mentality, which makes you think with more fear when trading live.

When you can get rid of those emotional feelings on trading live, and keep level headed and think like a pro trader, you will start thinking differently about live trading.

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 nillz123 
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See but the thing is I do normally think emotionally siming the same way I do trading live: However you dont EVER get partial fills or as much slippage as you do live.


eminitrader View Post
Indeed it is, if it is thought that way. By that I mean, if someone had no care and only thought that sim and live are the same, then their feelings will be the same to either or. But when you have that feeling of "ohh man this live now," that feeling turns into your mentality, which makes you think with more fear when trading live.

When you can get rid of those emotional feelings on trading live, and keep level headed and think like a pro trader, you will start thinking differently about live trading.


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eminitrader
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See but the thing is I do normally think emotionally siming the same way I do trading live: However you dont EVER get partial fills or as much slippage as you do live.

Maybe thats more of your fear (see bold in quote)

Your thinking and your emotions being the same live and sim is a step in the right direction.
If you are profitable in Sim with the same mindset as you would be Live your pretty much there IMO.

What do you have to fear?

If 1)You have a trading plan and it works; ie. you make money everyday in sim.
2) Your emotions and mentality are the same in Live and Sim.

If you can check those things off, then you should be good to go.

Maybe, you not trusting your plan when it comes to handling your actual money?
Or just afraid of losing in general, losing real money or just plain being wrong when it Counts?

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 mainstream 
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Maybe you shouldn't be trading at all. There are easier ways to make money.... like driving a cab.

Just quit. Give up. You'll probably be homeless because of your trading.

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 nillz123 
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mainstream View Post
Maybe you shouldn't be trading at all. There are easier ways to make money.... like driving a cab.

Just quit. Give up. You'll probably be homeless because of your trading.

Ummmmm No. I don't want to do anything else. And believe me, I will always have a place to stay. I have good money management so I won't be homeless.

And driving a cab isn't easier.


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 mainstream 
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Then start trading like it's your job.

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 nillz123 
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eminitrader View Post
Maybe thats more of your fear (see bold in quote)

Your thinking and your emotions being the same live and sim is a step in the right direction.
If you are profitable in Sim with the same mindset as you would be Live your pretty much there IMO.

What do you have to fear?

If 1)You have a trading plan and it works; ie. you make money everyday in sim.
2) Your emotions and mentality are the same in Live and Sim.

If you can check those things off, then you should be good to go.

Maybe, you not trusting your plan when it comes to handling your actual money?
Or just afraid of losing in general, losing real money or just plain being wrong when it Counts?


I can check off point 1), I am not sure about point 2) . . . Thats where the problem lies.

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 Big Mike 
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nillz123 View Post
I can check off point 1), I am not sure about point 2) . . . Thats where the problem lies.

If your emotions between live and sim are too different, then you need to honestly ask yourself why this is. I think for the majority of people it really boils down to trading with money they can't afford to lose, or reliving past experiences.

If you are trading with money you can't afford to lose, then you aren't trading at all. Your just gambling.

For the second point though, what I mean is that some traders have emotional issues that are related to prior experiences from their own trading. For instance, early on they had a terrible and stupid habit of holding on to losers too long, so now years later in their trading that can still effect them in many psychological ways, maybe they now get out of trades too quick because they are too afraid to have any loss. Maybe in the past they've lost a huge amount of money in one bad day or trade, so now they over trade trying to dig themselves out of a hole, and go on tilt and make it worse.

In any event, to fix it you need to create a journal, record every single trade entry and exit, and then come up with a clear plan of how to improve, then measure yourself daily and hold yourself accountable. Simple as that.

Mike

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 Linds 
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Have you got records showing 100 consequtive sim trades by your method that show a significant profit after commisssion?

If not then I suggest that you achieve that and THEN consider going live.

This will help your confidence no end.

If you cant or havent achieved this then theres more work to do and no need to torment yourself with the fear of going live right now. First things first.


another thing - are you trading within your risk tolerance? Sounds like you may not have in the past?

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 tmmaggi 
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Linds View Post
Have you got records showing 100 consequtive sim trades by your method that show a significant profit after commisssion?

You are absolutely right. Now that I have that, I can tell you I feel loads better about my trading now.

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 tmmaggi 
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Big Mike View Post

For the second point though, what I mean is that some traders have emotional issues that are related to prior experiences from their own trading. For instance, early on they had a terrible and stupid habit of holding on to losers too long, so now years later in their trading that can still effect them in many psychological ways, maybe they now get out of trades too quick because they are too afraid to have any loss. Maybe in the past they've lost a huge amount of money in one bad day or trade, so now they over trade trying to dig themselves out of a hole, and go on tilt and make it worse.

In any event, to fix it you need to create a journal, record every single trade entry and exit, and then come up with a clear plan of how to improve, then measure yourself daily and hold yourself accountable. Simple as that.

Mike

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.

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eminitrader
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nillz123 View Post
I can check off point 1), I am not sure about point 2) . . . Thats where the problem lies.


Now, list the emotions you have when you go sim and list what emotions you have when you go live.

And list what kind of thoughts you have when you are trading sim, or your type of mentality when sim.
(Are you having a winner's mindset, confident etc.)

And of course list what kind of mindset or mentality you have when you go live.

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 PandaWarrior 
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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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 mainstream 
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Aztreader9 is right on the money. Get into it. You know the drill, you know the deal, follow your path. Get with the get and trade positive.

Mike brings up an interesting point and while it is a bit off topic. Is it a bad thing to think of trading as professional gambling?

It feels like the World Series of Poker everyday to me...

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 nillz123 
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Linds View Post
Have you got records showing 100 consequtive sim trades by your method that show a significant profit after commisssion?

If not then I suggest that you achieve that and THEN consider going live.

This will help your confidence no end.

If you cant or havent achieved this then theres more work to do and no need to torment yourself with the fear of going live right now. First things first.


another thing - are you trading within your risk tolerance? Sounds like you may not have in the past?

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

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 nillz123 
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tmmaggi View Post
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.

This is a nice little check list. If you have it, post it please, or send it to me . . . if it is written.

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  #29 (permalink)
 Linds 
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There are some things for sure in trading - the market doesn't care if you are wrong or right ..or man or woman. Other than that its all up for grabs.

Its great that you have identified your low risk tolerance because that will determine your account size. What % of account have you decided is within your risk tolerance?

What stop size does this limit you too?

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 nillz123 
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Linds View Post
There are some things for sure in trading - the market doesn't care if you are wrong or right ..or man or woman. Other than that its all up for grabs.

Its great that you have identified your low risk tolerance because that will determine your account size. What % of account have you decided is within your risk tolerance?

What stop size does this limit you too?

No more than 20 ticks

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 tmmaggi 
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nillz123 View Post
This is a nice little check list. If you have it, post it please, or send it to me . . . if it is written.

Thanks Nillz,
Here it is . . .

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 nillz123 
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Thanks Nillz,
Here it is . . .

Thanks. Does this help alot with your strategy/trading? Are you profitable or does it do the job?

Also I see you have bold and underlined the "correct" but there are two questions that you did not choose the correct answer for?
"Is the trade taking too long?" And "Did you have strong feelings you should exit?" What is the right answer for that?

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 tmmaggi 
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Thanks. Does this help alot with your strategy/trading? Are you profitable or does it do the job?

Also I see you have bold and underlined the "correct" but there are two questions that you did not choose the correct answer for?
"Is the trade taking too long?" And "Did you have strong feelings you should exit?" What is the right answer for that?

Yes, this checklist is really helping me. What it helps me to do mainly, is keep me from acting like a complete idiot, which is what I do when I don't have the questions staring me in the face.

I've just started trading live again after a year of working on psychology stuff. When I first came back into it I thought I had done enough work to not need a physical checklist. This was a huge mistake. I have done very well since I have used my sheets every single day. I can't trade every day, but the times I have, I have made significant improvements.

Regarding the two questions I left unanswered: (1) Is the trade taking too long? This is a judgment call and in my personal experience, I just "know" that the trade is taking an excessive amount of time. When this happens, I have never had a happy ending. People will call this a "time stop" and many people don't employ this. I have determined this would be useful to me, but I have not specified the exact amount of time.
(2) Did you have strong feelings you should exit? Most people will say trading is no place to use instincts or intuition. If I have extremely strong feelings about keeping out of danger, there's probably a reason, even if I can't identify it or put it into words. I have recently decided I need to listen to myself a bit more often. Doesn't mean I'm going to jump out of a trade, just something I try to be aware of. The book Blink by Malcolm Gladwell is extremely interesting in the area of instinct.

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PiCoTrader
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Hi Nillz123,

Could you elaborate about your fears?
Could you share some charts and show what's going through your mind when seeing a signal developing?
Is your mind shouting "jump in, there's your signal, no wait you missed something, are you sure, hesitate some more is better than losing, was it your signal, go on.... noooh you missed your entry" kind of thing...

I am missing many many good trades because of doubts which I don't have on Sim plus we are more willing to risk Sim so more profits.
I used to trade stock and Forex for many months....learning how bad software can be....how bad my trading entries were...how bad my eye on the market was interpreting and on and on, so I lost $14000 including membership, new hardware and books.

So I stopped live trading, until I felt confident to go Live again but when I came back.....the market told me I was not ready yet...so I was losing again with bad execution timing, not knowing why my setups would fail here, be so great there and problems I could not see before.
Went back to Sim, never giving up and studying harder the market behavior and my behavior to the market.
After what I've been through emotionally, fear "doubts" which I didn't have so much up to now was in the back of my head like a trauma.
knowing that everybody has not been burned like me, I'm both feet in the 80% psychological level that makes a "real trader".
What's weird is, I'm not afraid to trade, no heart beat and sweating hands but rather paralyzed by the thought that it may be my last bar, though I have a 10 tick stop and trading a 4 range chart. I just sit there with no orders waiting.
I'm silly, I could put more cash in my account but I insist on doing it with trading.
Every day I got my live charts ready with some Sim charts, where I would try to catch my signals.
I end up very profitable everyday Sim and no live trades for days....silly again...but I'm building my confidence back...I'm a much better trader today than 3 years ago and I would not have any problem trading someone else account...and that's what is so crazy

So trading is not really that important. Getting better at it and KNOWING is much more important.
Today I know where, how and why I should avoid or take my next setup.
I'm good at price action and know where sellers and buyers are hiding. I know how patterns develop and how I need to work quitting the Sim mode.
In 1 year from now, I will look at the fear mindset of today and realize that it was such a learning experience and so far away in time.

Your thread Nillz123 about paralyzing fear, can be so useful to many traders that are ashy to express their fear, that I wanted to share my experience hoping to help.

PiCo

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 mattz   is a Vendor
 
 
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I wanted to share with you my thoughts: first, what you are going through is natural. our body and mind, has a natural tendency to stay away from negative experiences . What you are suffering from is not exactly fear, it's more of a paralysis because you are about to take a leap into the exact same territory and you don't want to experience the same consequences.

Now I want to address the other spectrum which is winning. Winning in finishing first in a marathon, getting an +A on a test,getting a promotion, etc. It's always the same type of an emotional rush that elevates our soul and gives us a sensation.

Fear and winning are the opposite spectrum but affect us both emotionally and equally.

Successful traders have neither fear (paralysis) nor have the sensation of elevation (winning).
Some do better than others in this department, and according also get compensated as such.

The one thing that beginners that associate with trading is making money,
and that in their mind is the winning part.

In my honest opinion winning in trading is the execution a strict plan of action.
The $$ that come out of a good executed plan is the by product.


So as a beginner trades to get out of the fear mode, accept that you will follow your plan to the fullest, no deviations. Following your plan should give you that emotional rush, because you will be saying to yourself "I am disciplined....I am following my plan...I have a methodology...my methodology might not be perfect, but I will improve as I am exercising it".

Now let me take you a little to the practical part. I am speaking for myself here, but discretionary trading on a sim mode never helped me. For me it was a way to get to know the platform, it's functionalities and its full capabilities when it comes to execution.

Here is what I did a while back to help me test my methodology: I completely automated it.
NinjaTrader has the strategy builder which is fantastic, and you can build a strategy and see how it would do in real markets. Maybe you can do that with your platform, and see the buy and sell that it generates. This might help you improve your methodology by looking at it objectively and tweaking areas where it is necessary.

Let me give you an example: I was looking at a certain price action set up on the ES, and it required an 8 tick stop and a 4 tick profit. Upon observation it occurred almost instantly. The method in back-testing and forward testing proved to work.
This requires a 67% winning ratio, and that is hard to achieve. But, I have made another observation: upon entry the market has retraced 4 ticks, and if it didn't hit the stop then it would go to profit.

So I decided to test it with 2 contracts: 1 for the initial entry, 1 if retracement occurred and keeping the target the same.
This has increased the results substantially. I would not be able to do that unless i saw the set up occur and the buy/sell signals occur in front of my eyes without getting involved. The automation took the emotions away.

I think you need to reach that part where you trust your methodology and you will if you have build it on your own.
Methodologies first built on visual observation and tweaked with different filtering indicators.

Outside of trading, you need to have an activity that you do successfully.
Something that gives you a sense of achievement and satisfaction.
This is one way to eliminate "scared money..the market is the best poker player and it will figure out your hand in a sec.

Lastly, I want to tell you that you are a winner!
You know why? Because you have more guts than 99% of society that would not even dare trading.

I wish you success in your trading journey and life.

Trading futures and options involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results. You may lose more than your initial investment. All posts are opinions and do not claim to be facts. Please conduct your own due diligence. Use only Risk capital when trading Futures.
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  #36 (permalink)
 nillz123 
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Thanks for all of your remarks.

I have actually gotten a lot better now, and it is funny, I did automate my methodology to build trust in it. I seen that while it was a winning strategy, the draw downs to my methodology were something I just did not want to take and I realized, a long as you are trading a system you are not comfortable with, you won't win! I am moving away from scalping, and I am more of a daytrader, staying in trades for hours, just because I don't want to feel the heart-pumping action that scalpers like to feel. I don't want to stare at the computer montor for 2-4 hours with full concentration, watching every single move, jumping and reacting quickly to every news event. Scalping requires A LOT of concentration IMHO: Do I really want that?

Although staying in hours requires a bigger Stop Loss, I get a bigger Profit Target too. And getting a loss and then a PT thats bigger.

It has come to the point where I reward myself not from losses or wins, but simply on following my startegy regardless of a loss or win.

I will tell you that I do trade on NT6.5 and that does crask a lot because of Data and tick errors, and that bounces me out of my "mode."

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ArnieM
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First you need a strategy, then will backtest it. Only after it's success you should test it life in demo. Only after that you have the confidence to trade life

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 mainstream 
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Here's a fun little test you can do to un-scare yourself. Put your 4 range no gap ES chart and TS Supertrend at 14 and 1. Then take every signal in your sim account, at the end of the day see how you did. Repeat until you know which signals not to take...

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 trs3042 
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Still can't pull the trigger???

What happens next???

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 Ryanb 
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In my personal experience i was afraid to pull the trigger because: i had the wrong timeframe, and only one market on my screen.
Timeframe needs to be good for you, you know if its good if most of your predictions without any indicator are good. (only direction and consolidation area)

With multiple markets i can check my opinion, and i can explain why something is happening.

i have 6 markets on my screens, that makes it for me easier to trade (i mainly trade 2 markets)

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Maineiac
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The ah-ha moment for me was truly understanding expectancy. Now I take 2 trades per day -ES. Opening and afternoon push, period.

2 point stop, 4 point target with 55% win ratio.

No indicators, single time frame, single signal that works for me.

Works out to 44 trades per month, 24 winners for 97 points, 20 losers for 40 points. Net 37 points, 4.5 points on commissions paid-net, net 32.5 points. 3 ticks expectancy per trade- winners or losers.

Good luck to all.

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 mainstream 
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Ryanb View Post
I
i have 6 markets on my screens, that makes it for me easier to trade (i mainly trade 2 markets)

I used to have all the markets up like that, and would get killed on days where the correlations were off. How do you handle that scenario?

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 Ryanb 
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mainstream View Post
I used to have all the markets up like that, and would get killed on days where the correlations were off. How do you handle that scenario?

Most of the time the correlations are gone when there was some kind of news, and thats what i`m also following.
Multiple markets give me more feel for the way it moves, if the correlations are off then my feeling is not good and so i don't trade.

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 mainstream 
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Maineiac View Post
Opening and afternoon push, period.

2 point stop, 4 point target with 55% win ratio.

Why such a big stop? Especially for the AM trade? Another good time is the European close.

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Maineiac
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mainstream View Post
Why such a big stop? Especially for the AM trade? Another good time is the European close.

A tighter stop just was giving money away, getting stopped out way too often with AM volatility.

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 monpere 
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Maineiac View Post
The ah-ha moment for me was truly understanding expectancy. Now I take 2 trades per day -ES. Opening and afternoon push, period.

2 point stop, 4 point target with 55% win ratio.

No indicators, single time frame, single signal that works for me.

Works out to 44 trades per month, 24 winners for 97 points, 20 losers for 40 points. Net 37 points, 4.5 points on commissions paid-net, net 32.5 points. 3 ticks expectancy per trade- winners or losers.

Good luck to all.

I had the same ah-ha moment, when I got the gumption to change my trading plan to go from a 1:1 reward/risk ratio to 3:1. My struggling, barely break even methodology turned profitable overnight. With a 1:1 ratio, I was always timid and fearful of every trade, so I would skip trades out of fear, and if the skipped trade was a winner, I would get really frustrated and go into revenge mode. So, I decided to dump the discretion, go purely mechanical, and take every signal once I observed that a 3:1 reward/risk ratio would result in about the same win/loss ratio as the 1:1 reward/risk.

I trade the YM with a 4 tick stop, and 12 tick target period, all in all out, I don't care what the market does, every trade gives me 12 ticks, or takes 4 ticks. Now, knowing that my system is a bit less then 50% accurate with 1:1 ratio, with the same accuracy at a 3:1 ratio, I now rely solely on the math, and take every signal without fear or hesitation, because I know that my scalping system which generates about 20 trades/day, I would need to have 16 losers out of 20 (which has never happened) to have a losing day. So, in the end, I think fear is only an issue for discretionary traders. If you are mechanical, and trust the expectancy of your system, you should be able to let go of your fear, and pull the trigger without a 2nd thought.

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 mainstream 
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monpere View Post
my scalping system which generates about 20 trades/day.


That is a lot of trades in a day! What is your TICK goal??

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 monpere 
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mainstream View Post
That is a lot of trades in a day! What is your TICK goal??

I have a small account, so I need to trade cheaply, hence I chose the YM, and trade 1 contract. I generally reach my daily goal by noon, and then switch to sim. Because of my personality, I have to be a scalper, I can't sit in a trade for even 15 minutes or I get jittery. I am most comfortable pulling the trigger a lot, but be in trades for a very short time. My average trades last less then 90 seconds. That is just perfect for who I am. I am thinking of moving to the CL, I think my average trade time will probably be even less, but I need to study the CL some more before I put the big boy pants on

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 itrade2win 
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The CL is not for small accounts. Margins are much higher compared to ES and YM. 2000/1 compared to 500/1 and I would recommend 10,000/1 minimum if you're new to trading.

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 monpere 
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itrade2win View Post
The CL is not for small accounts. Margins are much higher compared to ES and YM. 2000/1 compared to 500/1 and I would recommend 10,000/1 minimum if you're new to trading.

I tried out the CL today with my YM strategy. Started trading 8:00am EST, reached my daily goal with 4 winners by 9:08am !!! Looks promising! Have to try this beast out some more and see. I know the market has a way to lure you in, just to then grab you and spank you . Gonna trade it the rest of the day in Sim.

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 Rayzor 
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I have read a lot of this entire post and I totaly get where the orriginal poster is coming from. I think we have all gone through the fear phase, perhaps I am still in it. Early on I would strictly trade the ES and the ES only and would have my hiney handed to me on a daily basis. I'm not stupid and quickly realized that if I kept this up I would soon run out of dough so I hopped on the simulator. I simmed for about a week and would do great; first thing Monday I would go live and you guessed it, the cycle would repeat. Eventually I got to the point where I would have one small loser and I would run into the simulator for weeks on end.

I decided I was going to have to take a long hard look at myself and what type of trader I was, not to mention revamp the sub-par methodology I was using. I simplified my trading plan and decided that no matter what all I was going to do was trade my two top (high probobility) performers and nothing else in the simmulator for one solid month. Also, I discovered I had a greed problem and decided to step down to trading the cheapies like the NQ, YM, and the 6B; a full hit on those would only cost mr $50 - $60 as opposed to the three-pointers I was taking on the ES. I simmed the entire month with the afore mentioned instruments and was succesful so moved onto live. I have been back live for quite some time now and doing OK, my account is steadily growing.

I guess I still have some of the fear because I still trade the cheapies, ah-well, it's working for me and if I continue to work on myself I will step back up to the better paying contracts like the 6E when I am ready. I doubt I will ever do the ES again, I just don't care for it.

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  #52 (permalink)
 monpere 
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Rayzor View Post
I have read a lot of this entire post and I totaly get where the orriginal poster is coming from. I think we have all gone through the fear phase, perhaps I am still in it. Early on I would strictly trade the ES and the ES only and would have my hiney handed to me on a daily basis. I'm not stupid and quickly realized that if I kept this up I would soon run out of dough so I hopped on the simulator. I simmed for about a week and would do great; first thing Monday I would go live and you guessed it, the cycle would repeat. Eventually I got to the point where I would have one small loser and I would run into the simulator for weeks on end.

I decided I was going to have to take a long hard look at myself and what type of trader I was, not to mention revamp the sub-par methodology I was using. I simplified my trading plan and decided that no matter what all I was going to do was trade my two top (high probobility) performers and nothing else in the simmulator for one solid month. Also, I discovered I had a greed problem and decided to step down to trading the cheapies like the NQ, YM, and the 6B; a full hit on those would only cost mr $50 - $60 as opposed to the three-pointers I was taking on the ES. I simmed the entire month with the afore mentioned instruments and was succesful so moved onto live. I have been back live for quite some time now and doing OK, my account is steadily growing.

I guess I still have some of the fear because I still trade the cheapies, ah-well, it's working for me and if I continue to work on myself I will step back up to the better paying contracts like the 6E when I am ready. I doubt I will ever do the ES again, I just don't care for it.

IMHO, I think if NQ. YM, and 6B are working for you, then continue trading them, and just add more contracts, to increase your profits. Don't assume that the method that you are using on these instruments will automatically be successful on any other instruments. If you do want to switch to different instruments, I suggest you go back to step 1, back to Sim on the new instruments, until you verify that you can be successful trading them with your methodology.

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  #53 (permalink)
 fluxsmith 
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monpere View Post
...I trade the YM with a 4 tick stop, and 12 tick target period, all in all out, I don't care what the market does, every trade gives me 12 ticks, or takes 4 ticks. ...

That's sure a nice tight stop, what chart type and resolution are you following (5 min, ? range, etc)?

Thanks

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 Rayzor 
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Thanks "Flux", I can't agree with you more. I am content w/ what I am doing now and I have added contracts to increase the reward. The lower loss possibility in dollars really helped me get through the inability to pull the trigger. I sometimes think that futures should have micros just like Forex, IMO I think it would help traders out in getting over the fear. "Real money" can change things when it comes to clicking that mouse.

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  #55 (permalink)
 monpere 
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fluxsmith View Post
That's sure a nice tight stop, what chart type and resolution are you following (5 min, ? range, etc)?

Thanks


I use a 4 Range chart. I enter at the close of a bar. My stop goes 1 tick behind my entry bar (which is actually 5 ticks, but gets moved to 4 ticks once I I get 1 tick profit in the direction of the trade. I do that because I see a good number of entries that trigger go back 4 ticks, and then go to target, but this happens less often when the trade starts moving forward, so I require it to move forward 1 tick before tightening the stop)

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 monpere 
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Rayzor View Post
Thanks "Flux", I can't agree with you more. I am content w/ what I am doing now and I have added contracts to increase the reward. The lower loss possibility in dollars really helped me get through the inability to pull the trigger. I sometimes think that futures should have micros just like Forex, IMO I think it would help traders out in getting over the fear. "Real money" can change things when it comes to clicking that mouse.

Agreed. I had the same issue, so I started trading the YM, NQ, and 6B as well, and still do. The other thing I did, I initially tested my method with the ETF equivalent of the futures contracts. So, for instance, I would test with real money on the IWM eft rather then the TF (Russel) futures contract. That way I could buy 50 shares of the IWM and only loose $5 on a 10 tick losing trade with like $1 commisson. The object was not to make money, but to get used to trading real money, and also test my strategy. Obviously there are slight nuances in the mechanics of trading the IWM then the TF, like order flow, volume etc. But I don't use volume or order flow, I strictly trade chart patterns. And the etf's will generally give the exact same chart patterns as the associated futures contracts . The other major difference is that you need a minimum of $25K account to "day trade" stocks/etf's.

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 cpi65 
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Yo!

It doesn't say whether the losses were from one massive loss or a series of smaller losess...

anyway I have seen this happen with guys earlier on in my career... some of them got taken under the wing of older, more experienced guys, and they did exercises like:

Put on a trade and take profits as soon as you can - profits are not impossible to make

Put on a trade and set a stop / limit far enough away that you will probably be in the trade for an hour or so... and wait. Just wait - you will make money or lose money, but the markets are definately not out to get you.

Trade smallest size you can, but pick a period and ALWAYS be in the market during this time.

Of course these are not best practices for trading all the time, but they seemed to help these guys get around the sheer terror they had when forced to make a trade.

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 cpi65 
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OK, so... I've read through a bit of the thread and most of it seems to be along the lines of "trade on Sim until you are consistently profitable" or "don't risk more than yoiu can afford to lose" and all the usual bollocks. Most of my posts here seem to get deleted because of my abrasive nature so I'm not quite sure why i'm bothering, but well to hell with it!

Two things:

You're live PnL is like your virginity. Don't just throw it away, but it doesn't get more valuable the longer you keep it. And even then, you can't get better at shagging (trading) if all you are doing is wanking (trading on sim).

and

Trading, like most things, requires more than one skill. If there is one thing that is letting you down, the answer isn't just to carry on until it gets better - the answer is to find some exercise that is specifically designed to improve this skill. For example, professional tennis players don't just train by playing tennis.
They put coke cans in the service box and practice their serves until they can hit them every time. They have a coach set them up for backhand shots again and again until they've nailed it.

Trading is the same. If you have a particular prolem, do exercises that work on it specifically. You won't get much better by just carrying on trading.

And that's what my post above is about. There you go, bet most of you thought I was a useless shit, eh, but that's shit hot advice even if I do say so myself.

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  #59 (permalink)
 cory 
the coin hunter
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cpi65 View Post
... Most of my posts here seem to get deleted because of my abrasive nature so I'm not quite sure why i'm bothering, but well to hell with it!
..

are you sure? you made 67 posts so far, there were 4 yesterday, 4 today all colorful commentaries.

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 cpi65 
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cory View Post
are you sure? you made 67 posts so far, there were 4 yesterday, 4 today all colorful commentaries.

Artistic License

These other two will probably go because they denounce most of the other posts as bollocks, never mind the validity if what I've said.

PS.. actually, I made more than 4 posts yesterday, I'm sure.

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 monpere 
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cpi65 View Post

You're live PnL is like your virginity. Don't just throw it away, but it doesn't get more valuable the longer you keep it. And even then, you can't get better at shagging (trading) if all you are doing is wanking (trading on sim).

Trading Live vs Sim to Shagging vs Wanking analogy... I love it

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 Linds 
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"I love it "


...what, the analogy...or wanking?






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  #63 (permalink)
 monpere 
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Linds View Post
"I love it "

...what, the analogy...or wanking


Both.. Hahaaaaaaa!

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  #64 (permalink)
 monpere 
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Rayzor View Post
Thanks "Flux", I can't agree with you more. I am content w/ what I am doing now and I have added contracts to increase the reward. The lower loss possibility in dollars really helped me get through the inability to pull the trigger. I sometimes think that futures should have micros just like Forex, IMO I think it would help traders out in getting over the fear. "Real money" can change things when it comes to clicking that mouse.

There are some interesting mini/micro futures contracts like Gold: YG at $3.32 per tick, Mini Russell 1000: RF at 5$ per tick.

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 cpi65 
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monpere View Post
Trading Live vs Sim to Shagging vs Wanking analogy... I love it

Well it's true isn't it mate - it's fun to experiment in your bedroom with a laptop, but once you get to the real thing you never last as long as you thought you would.

LOL

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PiCoTrader
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"Quoting Nial Fuller"

Winning traders know simple strategies like price action trading work best because what really separates the winners from the losers is how well they manage their emotions and remain disciplined, not having a super-complicated or fancy looking trading strategy. Therefore, winning traders know there is no sense in over-complicating one’s trading strategy when you can learn to trade with a simple and effective method like price action. Winning forex traders master the setup(s) they trade, one at a time, as a result of this they know when to trade and when not to trade. Losing traders jump the gun because they don’t master their setup(s); they switch from one strategy to the next on a never-ending futile search for the “perfect” trading strategy that will allow them to win on nearly every trade.


Winning forex traders know they must develop and implement a patient mindset with the trading strategy they use, as a result they don’t rush any trade, they let the market show them its cards, instead of trying to “out think” or control the market. Losing traders typically manifest trading setups that aren’t really there, they over-analyze the market and try to digest as many market variables as they can in a vain attempt to predict what will happen next, once they convince themselves they are right about market direction they will risk too much simply because they think they have covered all angles and they can’t possibly be wrong. Winning traders know that the market is an untamable beast and that the only variable they can consciously control is how they react to what the market offers them. Price action trading gives winning traders a high-probability entry method so that when the market shows them its hand they can take a trade setup with confidence and clarity because they have been patiently waiting instead of actively over-analyzing
"End Quote"

Well said Nial, we couldn't express it better !

and I think these words may help here.

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 monpere 
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PiCoTrader View Post
"Quoting Nial Fuller"

Winning traders know simple strategies like price action trading work best because what really separates the winners from the losers is how well they manage their emotions and remain disciplined, not having a super-complicated or fancy looking trading strategy. Therefore, winning traders know there is no sense in over-complicating one’s trading strategy when you can learn to trade with a simple and effective method like price action. Winning forex traders master the setup(s) they trade, one at a time, as a result of this they know when to trade and when not to trade. Losing traders jump the gun because they don’t master their setup(s); they switch from one strategy to the next on a never-ending futile search for the “perfect” trading strategy that will allow them to win on nearly every trade.


Winning forex traders know they must develop and implement a patient mindset with the trading strategy they use, as a result they don’t rush any trade, they let the market show them its cards, instead of trying to “out think” or control the market. Losing traders typically manifest trading setups that aren’t really there, they over-analyze the market and try to digest as many market variables as they can in a vain attempt to predict what will happen next, once they convince themselves they are right about market direction they will risk too much simply because they think they have covered all angles and they can’t possibly be wrong. Winning traders know that the market is an untamable beast and that the only variable they can consciously control is how they react to what the market offers them. Price action trading gives winning traders a high-probability entry method so that when the market shows them its hand they can take a trade setup with confidence and clarity because they have been patiently waiting instead of actively over-analyzing
"End Quote"

Well said Nial, we couldn't express it better !

and I think these words may help here.

I think that quote is referring to those few with some special inexplicable talent, who can innately make judgment calls on the market and be correct most of the time. For the rest of us, as long as their is subjectivity in our trading approach, the majority will lose money. If 2 traders are sitting side by side, and one sees a head and shoulders, and the other does not see it, one of them will loose money. I you see a bull flag right now and you buy it, and you see another one 30 minutes from now, and you make a judgment call to skip it, in the long run you will loose money. If you risk $100 on this trade signal and $500 the next time, in the long run, you will loose money.

I can take a decent rule based mechanical winning strategy, give it to 10 traders, and 8 of them will turn it into a losing strategy. Why? because they make it discretionary and introduce subjectivity by 'analyzing' the market, and the price action, and the crowd mentality, etc, etc. They will destroy the expectancy of that system, because they judge and cherry pick the signals. Stop it! Just trade the rules of your strategy rigorously. If it has a calculated and proven edge it will make money, don't 2nd guess it, don't cherry pick it's signals, don't make it subjective. Once you start introducing subjectivity, I guarantee you will choose the majority of the bad signals built into the expectancy of that system, and skip most of the good ones. The result, you turned a winning strategy into a losing one. If you know your strategy has a 50% win/loss ratio, and 1:3 risk/reward ratio, it is guaranteed to make money if you take every signal with the defined money management, don't introduce any discretion/subjectivity to it.

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  #68 (permalink)
 RJay 
Hartford, CT. USA
 
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nillz123 View Post
OK. So I know there has been a thread about fear and greed . . . what advice would you give to someone who loves to trade but is deathly afraid to trade LIVE because of previous losses. How do you ever regain confidence from losses?

This might help sort things out...


Trading Webinar: Thinking Clearly Under Pressure with Denise Shull - Trader Kingdom

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 bluemele 
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monpere View Post
I think that quote is referring to those few with some special inexplicable talent, who can innately make judgment calls on the market and be correct most of the time. For the rest of us, as long as their is subjectivity in our trading approach, the majority will lose money. If 2 traders are sitting side by side, and one sees a head and shoulders, and the other does not see it, one of them will loose money. I you see a bull flag right now and you buy it, and you see another one 30 minutes from now, and you make a judgment call to skip it, in the long run you will loose money. If you risk $100 on this trade signal and $500 the next time, in the long run, you will loose money.

I can take a decent rule based mechanical winning strategy, give it to 10 traders, and 8 of them will turn it into a losing strategy. Why? because they make it discretionary and introduce subjectivity by 'analyzing' the market, and the price action, and the crowd mentality, etc, etc. They will destroy the expectancy of that system, because they judge and cherry pick the signals. Stop it! Just trade the rules of your strategy rigorously. If it has a calculated and proven edge it will make money, don't 2nd guess it, don't cherry pick it's signals, don't make it subjective. Once you start introducing subjectivity, I guarantee you will choose the majority of the bad signals built into the expectancy of that system, and skip most of the good ones. The result, you turned a winning strategy into a losing one. If you know your strategy has a 50% win/loss ratio, and 1:3 risk/reward ratio, it is guaranteed to make money if you take every signal with the defined money management, don't introduce any discretion/subjectivity to it.

I have evaluated at least 150 different systems. If not more. I have yet to meet a mechanical system that works over the long term besides long term buy-n-hold. I am not saying you can't have a successful mechanical system, but I do not believe they exist.

I am all ears if you have one.

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c12345
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Good discussion, good suggestions by all thus far.

Few points, some repeated, but repetition is success.

If you are afraid of "pulling the trigger" then ask yourself these questions:

Do I have a trading plan?
  • Is my plan simple yet does it cover what I need to do? how I need to trade, etc?
  • Did I back-test my trading plan over the different markets I plan on trading?
  • Did I find consistent results and do I feel I have an "edge" for trading the markets?
  • (If you back-test your method and realize that it doesn't work so well, then before trading real $$$, you might want to look for another method)
  • When I did the back-test did this method work, and was it profitable?

Does my plan tell me when to exit the market? and how to manage the trade once I'm in the market? Or do I just exit out once I make a few points?


When you are trading, when your method identifies a trigger, and a time to enter the market, are you aware of the risk before you enter the trade, to find out what it will cost you if the market goes the other way against you?

If you are aware of the risk, are you ok with the risk, according to your money management rules? if its beyond the risk then you will need to pass on the trade, IE Stick to your plan, which should have defined in it, your money management rules. Remember its all about preservation of your trading equity/capital, etc. Preserve, Preserve, Preserve....

And you have to remember that your method might be highly accurate once you back-test it, and if so that is a good thing, but you also have to take into consideration, that you dont know when the market, will put those odds in your favor. so if you have a loser, dont consider that a BAD thing, if you stuck to your plan, and followed your plan then you did well.

Get to thinking, that that the next trade setup, will bring you closer to realizing your odds of having a winner. Remember if a pro has a bad trade, but followed their plan.. they just wait for the next setup, and execute the trade.

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 trendisyourfriend 
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PiCoTrader View Post
...
Therefore, winning traders know there is no sense in over-complicating one’s trading strategy when you can learn to trade with a simple and effective method like price action...

Don't you think the term 'price action' has become a cliché or over estimated? I ask the question as i don't know of any public method of reading price action that is simple. To be sure, just consider Al Brook's approach to reading price action.

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  #72 (permalink)
 DarkPool 
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mainstream View Post
Is it a bad thing to think of trading as professional gambling?

It feels like the World Series of Poker everyday to me...

I think it has similarities, but realistically, it's more like being an used car salesman. You acquire a used car, somebody wants a car, you sell 'em a car(at the negotiated price), somebody else(or the same person) wanna buy one, you sell 'em one(again, at the negotiated price).

I think that analogy is a bit tame though. What about trading as Financial Warfare? You have to TAKE what's yours from someone else that just don't wanna give it to ya. A little conquering/raping/pillaging of the landscape, or getting your ass handed to you *if you are not prepared.*

However, you don't know who's on the other end of your trade(in general at a retail level) or what their viewpoint of the situation is. They could be someone who is getting out in fantastic profit, or maybe it's a devastating stop, or a scalper that will take a fraction of a pip and get out, or some corporation that needs Yen to buy widgets from Tokyo.

Whoa, WAY off topic!

I think it is good advice to step back, leverage down, trade less, smarter, easier, webinar, etc. as a growth tool, but eventually to be successful, you have to become the warrior. This will require more failure before you are done, you will need to learn to cope or be defeated.

One thing that really helped me was when I made the shift from trying to make as much money as possible to trying to lose as little as possible. A VERY distinct difference between the two.

I don't suggest sim trading to anyone but the greenest newbie. Once you learn the basics and think you have the desire to trade, you should use real money so it is real all the time. If you can't afford to invest a few bucks and trade micro-minis, then I'm going to go out on a limb and say that you are not ready to begin your trading journey in earnest. You have to figure out how to handle the emotions(fear and all the other ones) and using real money adds the emotional component that doesn't exist in sim as well as the reality of live market action and execution.

Also, after sim trading(especially ones where you step through candles) your time perception is often skewed to making trades on the wrong timeframe because it's easy to live with drawdown when you hit the spacebar and it jumps to the next candle, but what about that 3-4 hour period(in real time) that you were down 250 pips before that 4 hour candle reverses and comes back to where you are barely in profit(before dumping again, further). Those are the times you will be shitting your pants in real life, but not so much on sim. You have to learn how you will react in those situations, and know that you will be able to make the right choice, or stick with the micro-mini account until you know you are ready to risk more. But there should always be risk. No risk, no reward.

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ReaM
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One can only be afraid of losing when he knows that chances to win are not high.

Let me tell you this: When you place an order, are you afraid? See, when you place an order, the real feeling must be this: you've done the 100 meter sprint right? On the start, you feel all confident and ready. Now, imagine yourself feeling afraid at the start of the 100 meter run. What are your chances to win then? You have to feel very confident, prepared and that feeling does not come from washing your face with cold water, it comes from practice and experience. If you are afraid placing an order, then you are gambling. You have no idea what you are doing and you are not trading, you are gambling without a plan.

If you feel afraid, DO NOT PLACE THE ORDER!

I am trading forex and I use LFH simulator all the time. I place thousands of orders each week on the simulator, as I know where I need to put the stoploss, where to take profits, where to enter. If I lose, then it is a statistical loss, which means, there is always a loss and you can't do nothing about it. If you are afraid, don't place the order.

One of the biggest mistakes someone can do is not have enough practice. Many spend too much time on theory.
They read stuff like head and shoulders and they start finding the pattern all over the place on M1 chart... This is just wrong. You need to trade, not to look for shampoo.

Try the simulator and if you can't double your account each time, don't go live. Place hundreds and hundreds orders until you get confident, until you place them emotionless, it should be an automatic process, like a button push. When you finally get confident, you can go live.

When I began with the simulator, I had the feeling of being afraid to place an order, I skipped valid signals (like I used to do on live trading), or used lower position sizes and thanks to the simulator I understood that it's all bullshit. How can one know that the trade you are looking at is a bad one if you don't know which way the market will move and for how much? I ended up winning many times in a row with smaller position until I wiped out my wins with one big loss. This is gambling and the way out this kind of fear where your confidence is wiped out with one loss is the simulator. There you see your results and you will soon find things that you will never ever find anywhere in forums, it's the experience. You will get very confident once you find out things for yourself and when you go live, it will be not much different.
Placing orders will be a standard procedure, no feelings, no nothing. By that time you will know how many dollars you will lose for each dollar earned (profit factor), you will feel like you have finally done it.

Things like partial close and not turning a winner into a loser is discovered during trading, not reading.
You know right: don't turn a winner into a loser, but do you know how to do that? No guide will tell you how... At least, I have not met one.

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  #74 (permalink)
McMathews
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What are the ways that will lead to trade in the most safest way as far as possible ?
There may be ways by which the losses can be decreased or not be occurred at all . Can anyone suggest me about that ?

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  #75 (permalink)
 raffu 
Espoo, Finland
 
 
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jagui View Post
Reduce size, start small, do max 2 trades per day, until you rebuild confidence.
Understand that losing trades are part of the game, but LOSSES are not: you MUST always have some rules in place to avoid losses (that is, to preserve your capital, both financial and mental). If you have good rules, a loss will never happen.

Such rules would be as these:

  • stop for the day if you lose more than xxx
  • stop for the week if you lose more than yyy
  • stop for the month if you lose more than zzz

If you're really afraid, you can always live trade spot forex at 10 cents/pip.


Good points, but sometimes (very often) You are afraid of taking the position just after a big lose and the next one is usually more probably and you pass that ;(

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  #76 (permalink)
 monpere 
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McMathews View Post
What are the ways that will lead to trade in the most safest way as far as possible ?
There may be ways by which the losses can be decreased or not be occurred at all . Can anyone suggest me about that ?

There is no way you can trade, and not have losing trades. There are no systems that don't have losing trades. There are 2 key success factors to trading, 'Win Percentage' and 'Sharpe Ratio'. a high Win Percentage means you are winning a very high percentage of your trades, and losing only a small percentage. A high Sharpe Ratio means the average amount that you make on winners, exceeds the average amount you lose on losers.

In other words, have many more winners then losers, or have small losers big winners. The simplest way to achieve that, is to only take trades with reward/risk ratio greater then 1:1, or have a high win percentage. The smaller your reward/risk ratio is, the higher your win percentage has to be. The higher your Sharpe Ratio and/or Reward/Risk is, the lower your win percentage needs to be. If you have a really high Sharpe Ratio and/or Reward/Risk ratio, you can be profitable even if you have more losers then winners.

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  #77 (permalink)
JetTrader
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nillz123 View Post
OK. So I know there has been a thread about fear and greed . . . what advice would you give to someone who loves to trade but is deathly afraid to trade LIVE because of previous losses. How do you ever regain confidence from losses?

The question is a good one and the answer is straightforward and simple: trade only based on the empirical evidence the produces a probability for a successful outcome that you and only you are comfortable with, regardless of what anybody else thinks about it.

Whether or not one should trade, is not supposed to be about blind guesswork. It is supposed to be an educated guess based on mathematical probability. Anything else is not Trading, its Speculating. As Traders, by definition we are Technical Engineers of Market Data - pure and simple. Thus, the trader's Stop, Limit and Entry locations are not based upon fundamentals, rather the data that has been researched to show a tendency towards a particular outcome 'X' percent of the time with 'Y' probability under 'Z' conditions.

X-Y-Z

Put that together and the vast majority of the fear will be mitigated.

Now, the question is - how does the trader get high-probability trade scenarios under recognition on a regular and routine basis. That comes from research, testing and analysis - which could take years to map out for some people before they 'see the light' and realize that its a probability business from the word go. The fear comes from the uncertainty, but empirical data does not lie. High-probability gets its name because the data has demonstrated itself to be of a certain quality under certain 'Z' conditions (whatever indicators or set-ups you have researched).

Thus, when you make the move to executing on the probabilities and not the "market," you move from rank speculator to trader and the fear drops in direct proportion to the degree with which the empirical research shows the justification for the probability itself. So, if:

Fear = 100%
'Z' conditions exist = Yes
'Y' probability = 87%

You now have a 13% Fear factor, all based on empirical evidence. That's no guarantee, but that's an 87% reduction in the amount of money you spend on Nexium pills, which is money that can now go back into your trading cost basis. The key is in producing good "Y." And, that is accomplished by setting an expectation of profitability that is based in the reality of what your trading system or methodology is actually producing in terms of results - not what you might hope it would produce. And, that can only be determined with hard-core research that produces data to back-up the "Y" value.

At that point, you are a Technical Engineer of Market Data first, and a trader, second.

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  #78 (permalink)
 Lamboo 
Stockholm
 
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nillz123 View Post
OK. So I know there has been a thread about fear and greed . . . what advice would you give to someone who loves to trade but is deathly afraid to trade LIVE because of previous losses. How do you ever regain confidence from losses?


Dear Nillz,

I was in the same situation for a long time like 2 years ago!
every day a desolution, every day losses.
I had a good job that paid well, so I could afford to have a few losses.
Every time I went into a trade I came on a bit of profit and it fell back and I chickened out
with a loss.
but then I started with the COG center of gravity indicator on 5 min chart.
And I take 10/20 pips profit, I only added contracts when it was getting better.
And since then I go greener and greener.
Now I stopped working, I am still not the best trader but little trades here and there
and hv a autoprogram that gives me very good profit every month.

So keep on going! one day you will succseed!
never give upp and dont be greedy!

Lamboo

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  #79 (permalink)
jlancaster
Los Angeles, California
 
 
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The best advice I've heard is to use only risk capital. Don't let your risk capital exceed 1 or 2% of your total assets or you'll end up gambling everything. Keeping track of personal statistics is also a good idea. If you know your history and your numbers are positive in the long term it is easier to trust yourself.

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  #80 (permalink)
 Big Mike 
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I believe psychology is the single most important consideration deserving attention for struggling traders. If you are looking to improve your trading, you often need to look at yourself -- not directly at your method, indicators or tools.

Please join us for a special futures.io (formerly BMT) webinar on Trading Psychology, presented by Dr. Gary Dayton, for more info.

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  #81 (permalink)
ChrisCJR
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Something that helped me put my fears in check was Douglas' book, "Trading in the Zone". I don't know if anyone else who read it gained a better perspective on things, but it did help me.

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  #82 (permalink)
jlancaster
Los Angeles, California
 
 
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The bests strategy is to start small and build up again. Here is an analogy:

When I was younger I used to ride longboards down steep hills at 40+ mph. It was fun, exhilarating, thrilling! Until I crashed and burned. I was so scared to ride again after I recovered but I was determined to do it again.

I started riding down small hills until I could do it comfortably. Little by little I increased the size of the hill. A few months later I as at 40 mph again.

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  #83 (permalink)
ChrisCJR
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I ran into a video series on youtube of a seminar put on by Ari Kiev which discusses the fears of traders and the ways to overcome these fears. If you're not familiar, Ari Kiev was interviewed in one of the Market Wizards book and was the psychologist of the traders who worked for Steve Cohen. I don't think I have enough posts here yet to post a link but if anyone is interested, search: Trading - Becoming a Disciplined Trader (Ari Kiev) once at youtube.

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  #84 (permalink)
c12345
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ChrisCJR View Post
Something that helped me put my fears in check was Douglas' book, "Trading in the Zone". I don't know if anyone else who read it gained a better perspective on things, but it did help me.

This book is a great read, I've discussed reading it before, and using it as a course, and study it and read it again and again. I had watched Mark's DVD course called How to think like a professional trader, It was VERY GOOD, and after studying and applying his methods I've noticed a huge difference, granted it takes effort to change a believe..

Its like getting bit by a dog when you are a child, do you think that every dog you seen later in life wouldn't scare you the same way you did when you were a little child?? its the same way with the markets, FEAR gets ahold of individuals, and they stop following their plan, and then get all confused, etc. So changing your beliefe's are very important, and Mark discusses this in his books, and courses.

I'd highly suggest for every trader to carefully study his book, and do the lessons found in the book, and you will notice a huge difference in your trading..

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  #85 (permalink)
jojo
Edmonton
 
 
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There are quite a few books on trading out there basically saying the same thing; trading is 75-90% phsychology, and you need to find a system that fits YOU...!

In this day and age why should you settle with a mediocre system just because it happens to fit your phsyche? I personally wouldn't settle for anything but the best, assuming the system has been tried and tested (weathered a few storms so to speak). If the problem is attached to your trigger finger, then the obvious answer to the problem would be to automate the trading process using software, or have some one else trade your system...

I do realise that the size of the trading account obviously will come into play before one can assess the risk of any trade...

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c12345
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I'd have to say that in my opinion, for what-ever its worth....

You could have a system that has a track record of 80-90 % and yet if you gave this system, method to someone, and trained them, exactly how to make money, they would still mess up, and end up losing...

Again statistics show us that 90% of traders lose money, 90%.....that is a high figure... What is said about the mental aspect of trading is correct, failure to pull the trigger, staying in a losing trade too long, not taking profits, when you should, trading too large, etc. etc. these are all trading mistakes, and unless you address each of these problems then you as a trader, are only going to have limited results. Granted you might have a winning streak here and there, but when you dont deal with these problems head on, you are setting your-self up for a disaster.... There was a trader once who had a 95% losing streak, meaning 95% of his trades were losers, but the 5% of the trades he took, where winners, and made up for the other losers, and he was profitable... WHY? He stuck with his method, he had the mental skills developed, and he had no mental issues surrounding what he was was doing...

So the trading method does have something to do with trading, but having the mental skills, and awareness, are what is really needs to be focused on, and until someone realizes this & can come to grips with the fact that the answer isn't looking for another system/method, not studying charts for years, upon years.....

But the answer is dealing with your fears that you have of the market.... Once this is realized, and dealt with head-on, basically taking personal responsibility for your actions, then you can start to learn, and experience what the 10% of traders experience on a consistentant basis....

Again, just my .02 for what-ever its worth discussing this topic...

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  #87 (permalink)
bwasi
Kuala Lumpur, Malaysia
 
 
Posts: 31 since Nov 2009
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Afraid to Trade ?
Mistakes in trading cant be avoided,
But traders could make less mistakes
As time goes by, make less mistakes, gain experience.
Learn from the mistakes, recorded it in a journal.
Once the mistakes are minimum, an edge will appear.
Eventually this edge will place the trader as a winner

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  #88 (permalink)
 crosscreek 
Studio City
 
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Lowering trade size, going to a more forgiving instrument, are all good advice. But when I get into this kind of rut, I decide to focus on the one set up I trust the most with the instrument I know best, and wait, wait and wait for it to come and pull that trigger no matter when it hits. The waiting can't be a symptom of fear, but one of patience, knowing your time will come. I would also advise against trading short when in this rut, basically stay away from days with higher volatility. Shorting is always more schizo than going long, so it adds to the hesitation, when in fact it does not allow for any hesitation (much like surfing a big wave: you have a split second to commit and that's it). Once you are back on your feet emotionally, then go back to flipping the switch long/short intraday. But for now, stick to waiting for a long set up in a nice trending day. It will be calmer and much easier on your nerves.

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  #89 (permalink)
sidney7g
Philadelphia
 
 
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I've been in this same situation recently. You are profitable in Sim, you have a hardcore system, and you still can't trade because of those losses on your account. you need to seriously reprogram your mind. this is what you do

categorize your trades into probability odds-
1. maybe
2. probably
3. definitely
4. Completely certain.

trust me if you've made it this far you know when a 3 or 4 comes your way.

open your DOM and hover your mouse pointer over the entry price on # 3 and 4 level trades.
say out-loud "I AM A TRADER NOT A GAMBLER" then pull your mouse outside the DOM and click something nonclickable to simulate you entering a trade. Use a mental limit/stop loss for exit.

record your results in a journal ON PAPER, this is an absolute must. the journal is reconfirmation that you are in fact a trader and not a gambler. otherwise your instinct will forget even when you do succeed. In your journal record the net profit after each trade. Your instinct needs HARD PROOF.

keep your journal and DOM out at all times when watching the market. If you don't have a net profit in your journal after a few level 4 trades you need to rework your system. but, you probably will have a profit in your journal and it most likely will be significant.

I guarantee after about 5-10 'Days' you will enter a trade.

try it, it works.

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  #90 (permalink)
 monpere 
Bala, PA, USA
 
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sidney7g View Post
I've been in this same situation recently. You are profitable in Sim, you have a hardcore system, and you still can't trade because of those losses on your account. you need to seriously reprogram your mind. this is what you do

categorize your trades into probability odds-
1. maybe
2. probably
3. definitely
4. Completely certain.

trust me if you've made it this far you know when a 3 or 4 comes your way.

open your DOM and hover your mouse pointer over the entry price on # 3 and 4 level trades.
say out-loud "I AM A TRADER NOT A GAMBLER" then pull your mouse outside the DOM and click something nonclickable to simulate you entering a trade. Use a mental limit/stop loss for exit.

record your results in a journal ON PAPER, this is an absolute must. the journal is reconfirmation that you are in fact a trader and not a gambler. otherwise your instinct will forget even when you do succeed. In your journal record the net profit after each trade. Your instinct needs HARD PROOF.

keep your journal and DOM out at all times when watching the market. If you don't have a net profit in your journal after a few level 4 trades you need to rework your system. but, you probably will have a profit in your journal and it most likely will be significant.

I guarantee after about 5-10 times of doing this you will enter a trade.

try it, it works.

On the psychological aspect, whatever script, mantra, or ritual that works for various people, I think they should use it.

A couple of other comments. First, if a trader has trades he rates 3 or 4 in his arsenal, why would he want to trades rated 1 or 2? Just wait for the 3's and 4's to come and trade them. Also, I think a trader might actually be setting himself for more psychological issues, if he thinks he has trades that are 'completely certain', because when those trades fail, they will cause him to question his own judgment, and that just piles on to the psychological stack.

There is no such thing as 'definetely' or 'completely certain' in trading. The market will do what it will do. The strongest support can and does fail sometimes, the weakest resistance can and does hold sometimes. As traders, we just don't know, we don't know for sure what the market will do, no matter how awesome a trade 'looks', no matter how many structural market dynamics high level theories we use to convince ourselves to pull the trigger. The market will do what it will do. All we can do is look to the past and determine by empirical evidence, how this particular type of trade has performed in the past in this type of market environment, and determine our odds of it working for this instance. A setup with a 70% win ratio, will loose 30% of the time, and that is the most important psychological concept we need to internalize. If we use that setup we will fail to that extend on average. But the good news is, every time it fails, statistically, the next instance is that much more likely to win.

The best way to remove the fear from your trading, is to calculate and know the statistics of your method.

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  #91 (permalink)
sidney7g
Philadelphia
 
 
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ok,

monpere tell me the statistical odds for trades you'd consider taking, the frequency of the trades, and your stop-loss/profit target.

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  #92 (permalink)
sidney7g
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monpere View Post
A couple of other comments. First, if a trader has trades he rates 3 or 4 in his arsenal, why would he want to trades rated 1 or 2? Just wait for the 3's and 4's to come and trade them. Also, I think a trader might actually be setting himself for more psychological issues, if he thinks he has trades that are 'completely certain', because when those trades fail, they will cause him to question his own judgment, and that just piles on to the psychological stack.

A discretionary trader should always have a slight bias towards the market if he or she is or isn't trading. Thats level 1 just a gut feeling. level two are risky trades the trader is usually right about. He won't enter them but hes usually right over 50% of the time. level three trades hes right about 3 out of 4 times on average. level four anything over 3.0 out of 4 times. Anything similar to this grading system will work.

The underlying psychological enforcer here is to optimize the discretionary system by process of survival of the fittest. if you see a pattern number 4 and starts happening only 3 out of 4 times it gets moved to 3. etc. if you see a pattern that happens 3 out of 4 times but with an extra technical piece of information it happens 3.5 times out of 4, the new type of setup is moved to 4.

I think you underestimate the brain's ability to recognize patterns. You don't always need hard statistics to succeed at trading long term. My automated system is in my brain.

Keep it simple.

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  #93 (permalink)
 monpere 
Bala, PA, USA
 
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sidney7g View Post
A discretionary trader should always have a slight bias towards the market if he or she is or isn't trading. Thats level 1 just a gut feeling. level two are risky trades the trader is usually right about. He won't enter them but hes usually right over 50% of the time. level three trades hes right about 3 out of 4 times on average. level four anything over 3.0 out of 4 times. Anything similar to this grading system will work.

The underlying psychological enforcer here is to optimize the discretionary system by process of survival of the fittest. if you see a pattern number 4 and starts happening only 3 out of 4 times it gets moved to 3. etc. if you see a pattern that happens 3 out of 4 times but with an extra technical piece of information it happens 3.5 times out of 4, the new type of setup is moved to 4.

I think you underestimate the brain's ability to recognize patterns. You don't always need hard statistics to succeed at trading long term. My automated system is in my brain.

Keep it simple.

You said "Thats level 1 just a gut feeling. level two are risky trades...". I'm not even gonna tackle these, I will let your fellow discretionary traders offer their comment on these.

I will just say this, I only trade 2 setups, so I could not even possibly have level 3 and level 4 trades And, the moment I consider one of these setups 'risky', it will be dropped from my trading plan. My advice is, trade 1 setup, and know that setup inside and out, be able to recognize that setup in your sleep. I can look at a chart for 1.5 seconds, and tell you I see 6 of my setups on that chart, and I know I'll probably win at least 4 of them. No analysis, no trade rating, no pontification, no drawing lines, no calculations, no market theory, no debate, no fear. All that stuff was considered 5 years ago when I was developing the setups, so it is all built in.

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  #94 (permalink)
sidney7g
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level 1 and 2 trades shouldn't be taken Monpere. They are bad trades so don't consider them part of the system. They are more or less slight biases. Sometimes they help you spot an upcoming set up. An example of these are something like the inside of a pendant setup rather then the end, some range bound situations, and a variety of other situations where you can tell the direction but you wouldn't bet on it. You can guess where the market will go based on the previous trend or a larger time frame but the smaller charts disagree.

I only trade a couple setups that I feel I have down pat.
I counter trade exhaustion according to wick length, volatility, relative trend length, angle of trend, and previous resistance or support peaks. without one of these factors my setups wouldn't be level 4. I also trade pendants and trend continuations. obviously, I don't use indicators. I let the market tell me whats going on. If I tried to program a trading bot like this system it would just take hundreds of hours. I've thought about it but pattern recognition outside of indicators is very hard to program. Thats like programing a computer to recognize your friends faces on any angle / lightening as oppose to just using your own eyes. programing is the easy way out and in a way I think its handicapping true potential and eliminating the exhilaration of manual trading. but, everyone has their own opinions ;p

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  #95 (permalink)
sidney7g
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monpere View Post

I will just say this, I only trade 2 setups, so I could not even possibly have level 3 and level 4 trades And, the moment I consider one of these setups 'risky', it will be dropped from my trading plan. My advice is, trade 1 setup, and know that setup inside and out, be able to recognize that setup in your sleep. I can look at a chart for 1.5 seconds, and tell you I see 6 of my setups on that chart, and I know I'll probably win at least 4 of them. No analysis, no trade rating, no pontification, no drawing lines, no calculations, no market theory, no debate, no fear. All that stuff was considered 5 years ago when I was developing the setups, so it is all built in.

Monpere this doesn't look like an automated system at all ????????????????????? seems discretionary, no programming involved. So why are you bitching at me about how I don't know what I am talking about? I'd really like to know...

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  #96 (permalink)
parklane
Washington, D.C.
 
 
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There is a lot of good advice here, some of it more so than others.
However, if you have emotions that are holding you back, I don't think it's wise to trade.
You first need to work on yourself. Ask yourself why you feel a certain way, address issues in your life, feel good about yourself.
Trading really depends on you. Your the beginning and end to all of this, not your system, not your platform, not your computer.
If you feel anxiety, depression, frustration, anger, fear, etc., etc., are you really going to start trading? Be wise, be prudent, be careful. Spend the time investing in yourself and figure things out. I don't know anyone who does this without an emotional foundation to stand on.
This is really how to begin to trade.

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  #97 (permalink)
fxscott
Chico
 
 
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The best think I have found that helps is to trade two accounts. One you live account and the other a demo account. Trade the live one then compare it to the demo, which (in theory) you are following your rules. Compare which is better. 99% of the time you will find following your rules will work out better in the long run.

Happy Trading

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  #98 (permalink)
 raffu 
Espoo, Finland
 
 
Posts: 11 since Dec 2010


fxscott View Post
The best think I have found that helps is to trade two accounts. One you live account and the other a demo account. Trade the live one then compare it to the demo, which (in theory) you are following your rules. Compare which is better. 99% of the time you will find following your rules will work out better in the long run.

Happy Trading

I do have several accounts, one live and several demo accounts for different purposes: One for new strategy testing, one for robots, one for manual training and one basic sim just to test tools and so on.

But still I have to struggle with psychological barriers to put or use robots online although very good results already achieved to the demo account.

Good Trades

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  #99 (permalink)
 Trader Duck 
Fairbanks, Alaska
 
Experience: Intermediate
Platform: Ninja Trader, Nexgen T-3 Fibs Pro Trader (Love Them!)
Broker: AMP/CQG & Kinetic
Trading: CL
 
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Posts: 69 since Jun 2010
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nillz123 View Post
OK. So I know there has been a thread about fear and greed . . . what advice would you give to someone who loves to trade but is deathly afraid to trade LIVE because of previous losses. How do you ever regain confidence from losses?

The biggest boost to my confidence is also the best way to learn the trade set ups. Do HISTORICAL CHART MARKING: marking trades from the middel of the chart where you can see what happend before and after. Using the global cross hair across mutilpe time frames, you can see how things came together on all your charts. Try to explain every pivot in the market. What did the Indicators tell you before a pivot took place to signal that it was coming. WOW! This is so powerful! You must see things unfold doing Historical work first before you can ever have a clear visoin of how the markets move. I think this step is the most important and most neglected for traders. This is the first step toward learning how to see your trade set ups on the chart and you can score a high win loss ratio boosting your confidence in both your ability and the trade set ups. These pictures of successful trades are recorded in your brain. Your brain gets to see what worked and what didn't. Then these pictures, stored in your brain, are used by your subconscious mind. They become instincts that will later act as a filter to find good trades and keep you out of bad ones. If you are a technical trader as I am, then pattern recognition is the key and the subconscious has a lot more RAM than your conscious mind so feed it all the pictures you can by doing HISTORICALS. Plus, it goes much faster that sim or replay so you can cover more days in the market this way, and feed your subconscious more data. FEED YOUR BRAIN. Do Historical Chart Marking. I studied the Nexgen and New Futures Trading methods and they both emphasized Historicals. Here is a chart of the Historical work I did yesterday.

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  #100 (permalink)
 bluemele 
Honolulu, Hawaii
 
Experience: Intermediate
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Trader Duck View Post
The biggest boost to my confidence is also the best way to learn the trade set ups. Do HISTORICAL CHART MARKING: marking trades from the middel of the chart where you can see what happend before and after. Using the global cross hair across mutilpe time frames, you can see how things came together on all your charts. Try to explain every pivot in the market. What did the Indicators tell you before a pivot took place to signal that it was coming. WOW! This is so powerful! You must see things unfold doing Historical work first before you can ever have a clear visoin of how the markets move. I think this step is the most important and most neglected for traders. This is the first step toward learning how to see your trade set ups on the chart and you can score a high win loss ratio boosting your confidence in both your ability and the trade set ups. These pictures of successful trades are recorded in your brain. Your brain gets to see what worked and what didn't. Then these pictures, stored in your brain, are used by your subconscious mind. They become instincts that will later act as a filter to find good trades and keep you out of bad ones. If you are a technical trader as I am, then pattern recognition is the key and the subconscious has a lot more RAM than your conscious mind so feed it all the pictures you can by doing HISTORICALS. Plus, it goes much faster that sim or replay so you can cover more days in the market this way, and feed your subconscious more data. FEED YOUR BRAIN. Do Historical Chart Marking. I studied the Nexgen and New Futures Trading methods and they both emphasized Historicals. Here is a chart of the Historical work I did yesterday.

Hey TraderDuck,

It was nice talking to you the other day. Still letting your concept roll around some in my head.

I am curious, but I prefer to do market replay instead of historicals because the MACDBB can move SOOO much already. Henry and Horst, and Danielle all swear by it, but to me if a MACDBB moves 1 cm on that darn chart by the time it closes, that sure is a different look. So Market Replay is really good to look at for me.

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