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Implementing a Trading Plan and then sticking to a Trading Plan can be a complex barrier to overcome, especially if you start to feel shackled by its restrictions. For example, a daily loss limit of $1,000 was part of your Trading Plan, but 20 mins after the RTH open you were flat and down $1,050. Do you sit out the rest of the day and play Subnautica or do you continue to trade? Your Trading Plan infers you sit the rest of the day on your hands (or XBOX controller) whilst that little guy on your shoulder is telling you there is plenty more time to make up the loss. (or make it worse).
So what do you do?
Of course, there will be times when you veer away from your trading plan. You might get into trouble, or you might not, but at least you have something in place to nudge you back onto the highway so to speak. (I knew a trader that traded Forex and he would have a daily loss limit lockout attached to his account by his broker) - it is better than having absolutely nothing in place. If a trader decides “to hell with the plan” on a regular basis, then I think there is a bigger issue overall that goes beyond this thread.
An example from my personal trading. I have a particular type of trade that I take and I keep taking, no matter what. I have conditioned myself to take it when the setup comes along. Sometimes the context is not ideal but the setup is still valid. In binary speak, it is a 0 or a 1. If I don’t take these trades, history tells me that I will end up taking a sloppier one down the road that isn’t even part of my plan.
So yes, a good Trading Plan is not going to stop you veering away from it. Nor is a good Trading Plan going to make you profitable, but at the very worst a Trading Plan should aid in stopping you blowing up your account.
At the very best (once it is lock step with your trading) it can literally be the difference between keeping a profitable day, profitable and keeping a losing day in check.
Failing all the above, a trader should blow up 3 accounts of $25k first and then develop a plan. That sounds facetious, but a Trading Plan is how many of us ended up not blowing up a 4th.
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- Trade what you see. Invest in what you believe -
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As often in life, I kind of took the long winded road and jumped around looking at and using different stuff until I had the technical stuff more or less internalized. So I must admit that I am not trading off of a written trading plan.
Where I am 100% with you however is the daily loss. In fact, that is currently my one and only written rule - to stop trading at -x$.
When the account with my new broker is set up (NT Brokerage) I will have them implement a liquidate-only switch at that daily loss limit. (A little before actually, so that I don’t enter a new trade although I am just a few $$ from the limit.)
In a Perfect World, I would not need that and just stick to the limit myself. Being human however, I appreciate the possibility. And I also think that it takes some pressure off my trading, because I don’t have to worry in the back of my head about the possibility of that one huge screw-up where I loose the majority of my account. And when you had such a day (I had) this can become a really frightening thought...
@OMWF First brainwave entrainment, etc is known to work for about 85% humans (research). Second there is trial and refine involved because you don't have an EEG/MRI wired up; for that matter you may not have the correct association of EEG/MRI patterns with desired thoughts. Bottomline is you know internally if it is working for you, and if it is working for you, please continue. But don't overdo brainwave entrainment. Once a day for one session is usually sufficient.
In this backdrop what I have found most effective are
1 Sine Isochronic Entrainer...thats an Android app (sorry no iPhone) where you can locate some free presets. Its done by a bright young but wise guy.
2 vitaltones.com by a bright young sound engineer; they also do custom tracks.
3 flow state and vaporizing performance anxiety tracks by iawaketechnologies
4 Marc at brainwave-entrainment.com he does custom tracks and I think he is the most trained, experienced etc among the above; but the above three are also effective
5 another bright young guy in Germany who I have lost touch with now (I only have his email address) he did a few tracks for me last year.
I suggest you go by your gut feel as to what is working for you and then stick to it for a month at least (you may get results sooner) but you will need to be patient if progress looks too slow.
Everyone has a plan until they get smacked in the mouth. - Mike Tyson. This is true in trading as well. It comes down to skill and experience. Adapt or die. Instruct your mind to do something and it will do it. Repeat it enough and it becomes habit. That's how you're going to tune into not only your own psyche but a collective psyche known as Mr. Market.
This is where i am now . I have a plan i trust 90% . I stick to it great when i am in a drawdown . But when i coming off a winning streak all i think is about having a higher winning week than the last making me not following my plan taking nmore risk on . My problem is having a wining week of say $2K and not being satisfied with only making $1000 the next week . Need to reboot my mind each day to neutral no expectations and just follow my plan. Easier said than done . Any suggestions on exercises i can do get the greed out my mind?
psychology of what? psychology of numbers spitout by a computer!
psychology of you trading with too much leverage?
the problem with this thread and psychology in general in trading and gambling is that each case is unique even
bret streen whatever who says he is an expert in trading psychology doesnt mean squat. he is in this to make himself money
and to survive if he does not make himself VIABLE and an expert then he is worthless to anyone that would pay him!
Psychology ok. well you either cut losses or you dont. if you have acrappy hand in poker with bad odds do you
bet more go all in? if you have 5 days in vegas and you risk 200 a day and on teh 4th day you have lost 800 dollars playing poker
do you still play the last day? knowing you will most likely lose that last 200 bucks even after 4 days of experience?
the psychology is that eventually you need to just quit if you lose and keep losing or you just run out of money.
psychology of what i say numbers.. numbers have memory but they do not have emotions.
3+3=6
8-2=6
which one gets you more excited? yeah numbers are pretty emotionless.
best thing i can say to learn your psychology is to go to the micro and take 600 dollars split in 3 ways
200 200 200
'
on day 1 you buy or sell a 1 lot micro with a stop at (-200) and you set your profit exit at 50 dollars no matter what index
so es would be buy 1 whenever you want. so buy 1 at 3344 even so 50 dolalrs /5 bucks a point is 10 points so '
3344+10 = 3354 exit
then 200/5= 3344-40= 3304 sell stop to exit if you bought
run this trade and do not touch it. watch the screen or dont but no matter what let this trade run until you win or lose. do nto worry about 50 dollars vs 200 that is not the point! if you make money great if yo lose great. think about how you are feeling during this exercise
#2 you do a 5 lot in the micros same idea.
risk 200 and look to make 50
this time though in the es the points are much different.
200/25= 8 point stop (exit)
50/25= 2 point stop (profit)
yup you do the same exact thing you can either roll the dice to pick direction or use an indicator whatever you want
watch the screen and feel your emotions now that you ahve a 5 lot out there. in the micro
remembeer this exercise assumes you are losing 600 dollars no matter what so why do you care about direction.
# 3 if you ahve made 400 dollars awesome. if you have lost 400 dollars then do you want to risk another 200?
this is the psychology. there is no number 3 you are really only risking a total of 400 dollars and at this point you will
need to see how you feel about the situation. before you go trading another 200
numebrs and computers and people with huge money have very little emotion towards the mkt.
the point of not caring is the point of not having emotion.
you can trade this way with a long bias i would be long because the mkt is a bull mkt for 100 years plus. but thats just me
do this with real money. fake money does nothing for you.
EMOTIONS MUST BE SHUT OFF but if you win or lose after teh trade is over then those emotions should be turned on for the dopamine hit.
the dopamine hits need to come after the trade is done not during or before.
if your emotions are giving you a dopamine fix a hit a high before trading then dont trade! but after it should feel great to win and crappy to lose but you
cannot have emotion during the trades
this is how a trading plan works ok. the highway or the road is the mkt no matter what mkt you trade the road is the chart and there are many roads leading to
your destination but the problem is you are not allowed to pick exactly what roads you take. the path will be determined by the mkt and everyone and all
machines involved in the true path of the mkt will pick the direction of how and where the road goes.
what can you do with this road and path. you have 2 choices. you can either go left or right or up and down that is it. this would be buy or sell
you can also decide to get off the road or get back on the road. this would mean you are in the mkt (trading) or sidelined not in the mkt (flat)
so those are your choices! left or right (up or down) and on the road or off the road GET IT thats it
so plan A. we are starting in florida and our plan is to drive to california.
PLAN A. drive to california. we have so many different paths to take and we can look back at the road and for the last 5 mins 15 mins a year whatever and
try and make a best guess as to which route we want to take or which route the mkt (actual road) will take to get to california.
Luckily we can jump on and off the road whenever we want too and we can pick our direction of the road. sometimes we go opposite the path to try and get
the direction to change and sometimes this works if everyone else thing does it but lots of times this doesnt work.
sometimes we must say screw it! this road is not going to california at all any more but lets ride with this road (trend with it) or we can fight the entire road because 'yeah we know it is our plan that it wants to go to california! yeah right.
so you get on the road and at first it goes to colorado and you are like wow.. this is awesome i will be in california very soon. but just then
the road veers sharply towards mexico and you get nervous thinking omg i am going to be out of the usa soon.
you can get off the road and wait or you can just let it take you.
you decide to wait next thing you know you are in central america and you do not want to risk going to brazil because you wont have enought money
to get back to florida. see you can travel for free on the road all you want but when you make the decision to get off the road entirerly and get back to takign control
and back to florida that is a realm outside of this trading road this trading mkt. you can do that whenever you want but it costs a lot more to return back to florida from brazil than it does say new mexico or mexico or central america even.
this is the costs of trying to ride for free! it is always up to you what direction you go and when you are jumping on and off the road.
but the bottom line is that you are always making a best guess
I will say this about trading psychology also which is that every single person has a different psychology that trades maually and every computer only has numbers programmed in by statistics. People who program statistics do not use emotion in the statistics because there is no way not even sentiment can explain kt moves.
So one should assume that all algos all machines are just playing the numbers and following what the numbers say depending on how the numbers are programmed into the machines. ALso if 90 % of the trades are machines and machine learning is learning how the machines trade then the machines are just trying to game the machines.
it is impossible to think that small retail accounts are really losing enough money to support the big boys with smart machines! nope it is not noise traders like me and you it is huge pension funds mutual funds trillions trading that pay the big boys one penny and a tick or 2 on average at a time. thats all it is but understand
that people like the guy who made 50 million in es with a spoof program savinda whatever his name is figured out how the machines
were doing it and he started playing like the machines!
because he was reatail and human and a small player and was nto part of the club they went after him becuase the reality is that anyone can easily spoof even with a small accoutn and the reality is that jp morgans 1 billion fine for spoofing was nothing compared to what the spoofing made them over the years and the fee back to the gov. is not going to the people at all! the people ripped off by the machines and the programmers of the machines spoofing.
this guy figured it out and went for it! his emotions got so big he thought the mkt was all spoofing and he was right but he forgot who he was in the chain of command.
he risked outing the entire charade and he did but no one really thinks about what is really going on now do they? nope we just read it and move on we dont thin k about it like how are these macines making all this money? ahem they are all spoofing on different time frames for sure.
back to emotion again.. computers play the numbers you should play the numbers. the numbers are fake and you are betting on fake.
when you let your emotions over ride fake and think you desire (real ) which in your mind is value then you have lost the game before you even started.
how else can you describe the biggest nq rally in almost all of history? all the machines compute the same stuff and it is a race for the entry and a race for the exits and it will only get more fast and brutal globally until it crashes or breaks like AHEM TAIWAN!! recently the topix is closed wtf. ru kidding. no one is talkign about this because it has not hurt them yet.
ok doen with psychology good luck with your valued emotions
