My pitfall is that I overtrade when I am having a losing day, trying to make up for my losses. I often end up having a very bad day! I have tried to set a daily loss, but somehow I go into a trance and ignore this rule. Am I unique or does this happen to other traders? Any suggestions to change this bad behavior.
The following 2 users say Thank You to williamfrank for this post:
The answer is simple, follow your rules. Trading is about control. If you set a rule that protect you from this types of days, if you are not able to follow, nothing will help you.
Try to recognise physical signals on you that show you that this type of days are present, and go out to trading. Find how many money you need to lose for entering in this type of days.
For example, if you lose 500$ and you experimenting this type of reactions? Find a sand in the line when you lose money for don't be emotionaly broken.
You need to have the confidence that following this rule you will be take more benefits than not follow it. Trading is about accepting losses and this is another aspect than can help you. The market open every day and next day you can have more opportunities.
Don't trade for money. Trade for find opportunities is best, the money will come alone. An special sentence about how you can improve in trading is cut your losses the fast they come and let your winners run. Easy to say, hard to apply, but 100% real edge trading.
The following user says Thank You to ofatrader for this post:
“williamfrank” don’t feel alone! I share your feelings! Some days I ‘know’ it’s a bad market, and I should just quit for the day, but somehow I just want to try get out of the RED! This, needless to say, ends up with me having just a greater LOSS! So, rest assured, you are not alone…! I am challenging myself daily to change this mind-set!
This is the biggest problem facing most retail traders. Moving from scalping to swing trading is the only cure for the undisciplined (like me). I could have 10 or 20 good days scalping and then lose all my profits when volatility kicks in. Moving to a higher time frame/bigger range bar that can absorb the volatility helps a lot
The following 4 users say Thank You to pvlee for this post:
As a systematic trader, my #1 goal is to implement the system without error. As long as I am doing that, I am winning. Every trader has an inevitable string of losers and the key is to not dig a big hole for yourself. Remember, the market is in "giving mode" only a certain part of the time but is in "taking mode" most of the time; when you experience losses, the market is in "taking mode" and just recognize it - it will return to "giving mode" soon, and you just need to have sufficient capital to be around when it does. Also, remember that the market doesn't care how much money you've lost already today or this month.
The following 3 users say Thank You to furytrader for this post: