I was chatting with a trader on Skype today. He's a retail trader. He showed me his perdormance so far this year and he's just above break even, which to me, is a fantastic result and puts him ahead of the most traders.
He then went on to ask about a specific issue he's having - hesitancy - and how to get over it. He's hesitating to get in and his feeling is, that's costing him money.
Now - the advice I gave, doesn't actually come from me. It comes from John Grady who gave it to another trader for another issue (closing trades too early).
Basically the idea is to allocate a certain amount of money - $500, $1,000 - whatever you can afford and this is money you are going to write off mentally. It's losing money. It's as good as gone.
The goal in this case would be to hit all trades without hesitation and to keep on doing so until the amount of money set aside is lost. This might sound a bit odd. The idea is - if you have a trading glitch - it's usually down to fear of losing and by writing off the money, you remove that fear to some extent. It allows you to trade through that glitch.
Also - you really don't know if your glitch is helping or hindering you and this experiment also helps in that respect.
I've seen a couple of guys go through this and simply not get to the point where they lost the money set aside. It worked them through the issue.
Anyway - I just thought I'd put this out there. It's not something I came up with but I do think it's an interesting idea.
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One of the keylessons, because most people don't want to lose anything. I've found that I must make my decisions based on mechanical checklist of things that verify/discount my directional view. Bringing emotion into it, greed and fear are limiting factors, but personally I do look at the £'s in my pocket from the trade which is different to most people, that's only a personal preference as I feel I can disconnect emotionally from the numbers.