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On losing days, I have a very hard time to even acknowledge that its OK to lose. I end up not documenting journal entries such days at all. That has improved lately but not yet up to where I want it to be.
Following a stop loss, I tend to immediately start looking to recover. I end up taking sub-par trades and many times it snowballs so fast that I end up reaching my daily loss limit in a matter of minutes. During this time, the mind tends to throw away all logic and in hindsight, I cannot believe what I did. Its hard to explain after the fact.
If I get a nice win, then I tend to not take any more trades for the day because of the fear of giving up gains. I just sit on my profit and watch the market do what I anticipate it to do. In hindsight, these are days with decent volume and volatility when my plan can be capitalized to its full potential.
These are my 3 biggest issues but I feel that the problem with me is confidence. I cannot build confidence in my beliefs because of the lack of iterative feedback which basically has to do with lack of or insufficient journaling and analysis. Thats why I listed this issue at the top because I believe it to be the root cause.
Can you help answer these questions from other members on NexusFi?
Well, since many so-called 'reasons' already have been mentioned here by josh and PandaWarrior, I'd like to add / repeat a few of my personal ones...although they already might be borderline to bad habits... ;)
1) Market is so dead …
"If you don't design your own life plan, chances are you'll fall into someone else's plan. And guess what they have planned for you? Not much." - Jim Rohn
I trade on the west coast so I have to be in the trading seat at 6am if i'm going to do some manually trading and get in synch with the market before the equity open. I used to have problems falling asleep and then it would be hard to wake up early the next day. Sometimes I still do, but these are some things that have helped.
Ditch the coffee and any other energy drinks. Artificially stimulating yourself to be awake is not doing your body any favors over time.
Go to bed sooner. Just make it a deadline. TV helps me fall asleep because it turns off my brain or at least distracts it from the things I usually think about that can keep me awake. I know it's a form of "artificial light" and some say doesn't help, but it works for me. I keep the volume really low and set my TV's sleep timer for 30mins so it will turn off when I actually do fall asleep and not stay on all night. Reading can also help, but nothing too exciting or stimulating. Maybe a useful but not-exciting trading book, or some so-so magazine articles can help.
If you have a hard time falling asleep try taking Melatonin pills. It's natural, over the counter and not addictive like sleeping pills can be.
Make sure you have a good, comfortable bed. I used to have this old mattress we had for 11+ years and I would always wake up with back pain. We got a Sleep Number bed and my back pain went away and I sleep better and longer. I also have good 100% goose-down pillows. They are more expensive (about $100 each) but I sleep better with those too and they are worth the investment..
Scientists are finding more and more about how important sleep is for our long-term health. You should really look into ways towards improving your sleep habits to improve your overall health and longevity.
1)when I see a buy signal in my trading system I wait for some correction check the Buy/sell quantity. Try to find If there is any news(result/government decisions in that sector) about that stock, check If any expert(who say they make lot of money) has said something about that stock in forums/chatrooms. By then the stock sometimes shoots up 1% than I feel the stock is too costly and I wait another signal.
2)I get attracted towards stock which gives me profit!. 1 Thursday I made huge profit by short selling Wipro following sell signal. On Friday the stock was moving flat 0.25% or so. I dint find any other strong signal. It was 12pm I got bored And my devil brain woke up It said to me. "YOU HAVE YESTERDAYS GAINS,YOU HAVE NOTHING TO LOOSE PEOPLE MUST BE BEARISH AFTER YESTERDAYS FALL . I clicked sell button, stock started moving north I placed my stop-loss higher twice and It finally hit.
I blame others indicators/systems like oops I entered short on 3rd up elliott wave who's property is gap up and close at high or there was no DIV in the MACD and so on
Is MACD DIV part of your signal? If yes, the issue is not blaming but not sticking to thte system here. If not, why would you even have it on your chart?
Since the poll allowed you to pick more than one, I did. As I recall, I first checked "Cutting winners short," because I get seized with a fear that I'll have to give back a profit, which is basically the idea that I was wrong.
Then I think I checked "Undertrading," because I let opportunities go by because I want to be sure they will work... which is basically the idea that I may be wrong.
Then I checked "Not following plan," because my plan tells me when to get out, when to get in, and I have tested it well enough that I should just do it, but I don't.... which is basically the idea that I may be/or am wrong, and I freak out a little bit.
With all that, I can still pull out a profit most days, but obviously not what it could be.
All of this will help me work on my weak points, so thanks for the poll. I can see that "fear of being wrong" is what it's really all about. Like I didn't know this . But still, good to recognize it again, in a new way.
As I mentioned in my Being Undercapitalized thread awhile back - most traders are coming at this with $500-$5000. As you pointed out - yes you can learn how to trade and even have an edge with that amount of money. However, the most cited trading goal is "quit day job to trade". To do that you need $$. For example I have several solid edges that net on average 25% per year. To replace my job I need $5k per month. Assuming I never have a drawdown and don't need to grow my account that means I need $240k to even think about quitting the job.
. But still, good to recognize it again, in a new way.
