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What do you do once you’ve entered your trade?


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What do you do once youíve entered your trade?

  #1 (permalink)
Detroit MI/USA
 
Experience: Advanced
Platform: Multicharts, Custom own
Trading: All Futures
 
Posts: 36 since Sep 2017
Thanks: 15 given, 73 received

What do you do once youíve entered your trade?

Entering a trade seems to be one of the easiest parts of trading - you analyze, assess, define your entry point, hit the entry button and you are in. Hopefully you immediately place your stop once you are filled on your entry.
Now what? I would think the vast majority of time, within a very short space of time, your trade goes into some type of drawdown, the result of normal market movement. If you arenít totally sure of your entry or maybe your actual methodology, which the vast majority of newer traders usually arenít, your heart rate might tick up a few beats. Sound familiar? The market slips a little further against your position and you then start questioning? Hmm maybe I should have done this, or maybe that? Your heart rate might increase a little further and from this point, everything else is insignificant.
If you find you are agreeing with any or all of the scenario described above, you might want to consider the most common possible causes and some possible solutions.

Causes:

1) you are not really sure that you have the right methodology. You havenít analyzed your technique/entry over enough previous data to convince yourself you actually have an edge.
2) you have misinterpreted the current market structure or setup
3) you have been beaten up iní the market previously due to a multitude of possible reasons
4) you are over leveraged and/or under capitalized
5) you are revenge trading
6) you have unrecognized significant psychological damage from previous exploits in the market (ties in with number 3).

Solutions:

1) ensure you have an edge. Spend the time analyzing your technique/methodology and convince yourself, that over time, it is profitable.
2) before entering the trade remind yourself that this is just one trade in isolation. Based on your edge and known metrics of your system, this trade is insignificant as it is one of many and you know, that over time, you do actually have an edge.
3) if you are over leveraged/undercapitalized - just STOP now. I believe this is THE biggest contributor to all the psychological damage that scars every single trader that trades the markets. Do not go and trade on the sim, that is pointless. Use the new micro contracts that are an absolute game changer, in my opinion, for new and struggling traders. They allow you some actual skin in the trade but they wonít break you financially if youíre wrong. They should help with allaying some of the stress and fear that occur when you have too much money at stake on any 1 trade.
4) consider entering your trade, entering your stop and possibly profit target and then getting up from your computer for the first 5 or 10 minutes of the trade and do anything but watch the screen. The noise of the market screws with psychologically damaged trading minds more than one gives it credit for and propagates the damage even further.
5) if your last trade was a loss, and you are feeling some type of emotional reaction because of it, get up and get away from the computer so you donít place a rash trade in order to make up for your recent loss. Time away from the screen during the trading day can help reset your thought processes and allow you to analyze the market in an unbiased manner rather than through a confirmational bias lens that constant staring at a screen all day might do.

Interesting to hear from both experienced and newer traders whether they stare at the screen once they are in a trade.

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  #2 (permalink)
Market Wizard
New Orleans, La (Mardi Gras City)
 
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TraderDoc007 View Post
Entering a trade seems to be one of the easiest parts of trading - you analyze, assess, define your entry point, hit the entry button and you are in. Hopefully you immediately place your stop once you are filled on your entry.
Now what? I would think the vast majority of time, within a very short space of time, your trade goes into some type of drawdown, the result of normal market movement. If you arenít totally sure of your entry or maybe your actual methodology, which the vast majority of newer traders usually arenít, your heart rate might tick up a few beats. Sound familiar? The market slips a little further against your position and you then start questioning? Hmm maybe I should have done this, or maybe that? Your heart rate might increase a little further and from this point, everything else is insignificant.
If you find you are agreeing with any or all of the scenario described above, you might want to consider the most common possible causes and some possible solutions.

Causes:

1) you are not really sure that you have the right methodology. You havenít analyzed your technique/entry over enough previous data to convince yourself you actually have an edge.
2) you have misinterpreted the current market structure or setup
3) you have been beaten up iní the market previously due to a multitude of possible reasons
4) you are over leveraged and/or under capitalized
5) you are revenge trading
6) you have unrecognized significant psychological damage from previous exploits in the market (ties in with number 3).

Solutions:

1) ensure you have an edge. Spend the time analyzing your technique/methodology and convince yourself, that over time, it is profitable.
2) before entering the trade remind yourself that this is just one trade in isolation. Based on your edge and known metrics of your system, this trade is insignificant as it is one of many and you know, that over time, you do actually have an edge.
3) if you are over leveraged/undercapitalized - just STOP now. I believe this is THE biggest contributor to all the psychological damage that scars every single trader that trades the markets. Do not go and trade on the sim, that is pointless. Use the new micro contracts that are an absolute game changer, in my opinion, for new and struggling traders. They allow you some actual skin in the trade but they wonít break you financially if youíre wrong. They should help with allaying some of the stress and fear that occur when you have too much money at stake on any 1 trade.
4) consider entering your trade, entering your stop and possibly profit target and then getting up from your computer for the first 5 or 10 minutes of the trade and do anything but watch the screen. The noise of the market screws with psychologically damaged trading minds more than one gives it credit for and propagates the damage even further.
5) if your last trade was a loss, and you are feeling some type of emotional reaction because of it, get up and get away from the computer so you donít place a rash trade in order to make up for your recent loss. Time away from the screen during the trading day can help reset your thought processes and allow you to analyze the market in an unbiased manner rather than through a confirmational bias lens that constant staring at a screen all day might do.

Interesting to hear from both experienced and newer traders whether they stare at the screen once they are in a trade.

After I take a trade, I normally just wait for the trade to play out and the profit target is hit.
Unlike most traders, my entry and stop are all executed at the same time.
(ENTRY, STOP, TARGET)
Yes, I can take a trade without a target but mostly I don't.
If there is no target, my stop is moved to BE when I can and then manually exit.
My risk is considered before the trade and I don't move the stop away from price.

When I take a trade, I have decided that the risk (stop) is worth taking the trade.
This single trade is just one of many that exploit my edge.
If my stop is hit, then I'm out and look for the next trade.
No emotion, no regret, that happens.

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Knowing it's not about Clouds or Wind. . .
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The following 3 users say Thank You to DavidHP for this post:
 
  #3 (permalink)
Seattle, United States
 
 
Posts: 5 since Feb 2020
Thanks: 0 given, 4 received


Once I take the trade I try not to mess with it. And I should be able to say emphatically that I don't mess with it, but I do sometimes and I've learned over time that it's usually not helpful. So I try to stick to the plan I made and then when I've exited the trade I take a break to plan the next one so I don't fomo in short after closing my long. That usually ends badly.

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  #4 (permalink)
london, UK
 
 
Posts: 5 since Apr 2020
Thanks: 7 given, 0 received

measure my heart pulse

i will TRY not to tinkle with the trade and let it play out.


TraderDoc007 View Post
Entering a trade seems to be one of the easiest parts of trading - you analyze, assess, define your entry point, hit the entry button and you are in. Hopefully you immediately place your stop once you are filled on your entry.
Now what? I would think the vast majority of time, within a very short space of time, your trade goes into some type of drawdown, the result of normal market movement. If you arenít totally sure of your entry or maybe your actual methodology, which the vast majority of newer traders usually arenít, your heart rate might tick up a few beats. Sound familiar? The market slips a little further against your position and you then start questioning? Hmm maybe I should have done this, or maybe that? Your heart rate might increase a little further and from this point, everything else is insignificant.
If you find you are agreeing with any or all of the scenario described above, you might want to consider the most common possible causes and some possible solutions.

Causes:

1) you are not really sure that you have the right methodology. You havenít analyzed your technique/entry over enough previous data to convince yourself you actually have an edge.
2) you have misinterpreted the current market structure or setup
3) you have been beaten up iní the market previously due to a multitude of possible reasons
4) you are over leveraged and/or under capitalized
5) you are revenge trading
6) you have unrecognized significant psychological damage from previous exploits in the market (ties in with number 3).

Solutions:

1) ensure you have an edge. Spend the time analyzing your technique/methodology and convince yourself, that over time, it is profitable.
2) before entering the trade remind yourself that this is just one trade in isolation. Based on your edge and known metrics of your system, this trade is insignificant as it is one of many and you know, that over time, you do actually have an edge.
3) if you are over leveraged/undercapitalized - just STOP now. I believe this is THE biggest contributor to all the psychological damage that scars every single trader that trades the markets. Do not go and trade on the sim, that is pointless. Use the new micro contracts that are an absolute game changer, in my opinion, for new and struggling traders. They allow you some actual skin in the trade but they wonít break you financially if youíre wrong. They should help with allaying some of the stress and fear that occur when you have too much money at stake on any 1 trade.
4) consider entering your trade, entering your stop and possibly profit target and then getting up from your computer for the first 5 or 10 minutes of the trade and do anything but watch the screen. The noise of the market screws with psychologically damaged trading minds more than one gives it credit for and propagates the damage even further.
5) if your last trade was a loss, and you are feeling some type of emotional reaction because of it, get up and get away from the computer so you donít place a rash trade in order to make up for your recent loss. Time away from the screen during the trading day can help reset your thought processes and allow you to analyze the market in an unbiased manner rather than through a confirmational bias lens that constant staring at a screen all day might do.

Interesting to hear from both experienced and newer traders whether they stare at the screen once they are in a trade.


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