Was trading this morning, taking my signals. I was all of the sudden big in the red with a few losers, close to my daily loosing limit, I couldn't stand it. Got some good scalps, made it back to only -$140.
I only need one big good trade to get me to my daily profit target again. Then it happend, I took a loser again. And said WTF. My GF said she wanted to go shopping at 11.30h
I had another 30minutes to go, I started trading like mad. 55 trades. Without any entry signal. I said, now it's going to drop: ENTER, = looser, I said, now it's going to drop: ENTER = looser, I said now it's going to go down : ENTER = Break Even.
WTF was I thinking ? I was shouting to myself: You stupid moron, stop trading like that, but I looked at the watch and said: I still have 10 minutes to make this loss up !!!!
I stopped now. Said to her we'll leave a few minutes later so I could type this. I'm so ashamed of myself. 55 revenge trades with a big loss in outcome.
OK, my account can take it. But why wasn't in control of myself ? That is so stupid.
Now where is that book 'Trading in the zone' again ?
Can you help answer these questions from other members on futures io?
I'm pretty sure we all go through this from time to time. I know I do, more than I care to admit. I will physically leave the room or I will literally sit on my hands until that revenge is under control. Knowing and admitting your actions is half the battle. The other half of the battle is not to do it again. That's the part I fail at occasionally. Sorry for your loss Metaltrade, enjoy your weekend and hit it again on Monday.
Rick
The following 2 users say Thank You to trs3042 for this post:
@MetalTrade you are not stupid, but this is a problem, you have to go deeply inside your self and try to find why you act this way, saying stupid to yourself , is useless, seems you lack a bit of mindfullness.
Anyway @TraderSU has just listed two interesting books
@MetalTrade, a thing u can do to face the discipline, is ask your broker to set u a daily loss limit, that if exceeded your positions are automatically closed, and you can't trade till the next session, and to set a maximum open positions, I would say 2% of your balance as daily loss limit, and max 3 contracts at the same time, for a total of maximum 20 contracts daily.
Take your Pips, go out and Live.
Luke.
The following 5 users say Thank You to LukeGeniol for this post:
We all have done what yur describing here so dont beat yourself up . What I would suggest though is to focus a little on the above statement you made here because it could let you lead yourself right into self destruction . I found that when I let myself think "I can afford it " or "my account can take it" I began to justify overtrading or bending / breaking my own rules . It pains me when intraday traders get killed out there and are left reeling and trying to make sense of what happened , even worse when the wound is left to be licked all weekend . Trading (or any job) shouldnt be painful on the head .
Before I started trading I would read posts like this and think to myself "I can't understand why people cannot follow their rules and common sense. That will never happen to me!". Then I start trading and I catch myself making the very mistakes I was sure I was not going to make. Humans are flawed creatures. We all have to battle the same types of flawed impulses and thinking. I am sure with time it will become easier to control yourself with regards to these things.
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Thanks for sharing, I think many of us went through your experience it takes courage to admit it. BTW "My GF wanted to go shopping" is a 100% loosing trade
The following 2 users say Thank You to redratsal for this post:
thanks for sharing this experience. I think everybody, even if we do not like to admit it, knows very well what you are describing.
Loss aversion
The loss does not match our goals, so we try to avoid it at all cost, forgetting that the cost produces a new loss. There are various stages of dealing with loss aversion.
-> moving your stop loss a bit further
-> doubling your position to make it easier to break-even (Martingale approach)
-> overtrading and revenge trading
-> cutting profits short to avoid that they become losses
The market is designed to exploit our weaknesses, game theory teaches us that you are either exploiting others or that you are being exploited by others. The market is a zero sum game.
Very difficult to unlearn bad habits. Similar to drugs and alcohol. It will work two or three weeks, your will have nice profits and then - only one day - you will fall back into your bad habits again, just to lose more money with a single trade than you have made during your successful weeks.
Impatience
The most difficult task is to do nothing, just sitting and watching. Only accept the best opportunities for trading. One trade per two hours. Just sit and wait for the one opportunity. Finally we know that there are many of them, but as we have the impression that time goes by and we are doing nothing, we enter a trade too early.
Actually, I enter my trades often too early, and to compensate, I exit them too early as well. This is anti-cyclical behavior - similar to the COT positions of the Commercials - but it does not pay out. My alias "Fat Tails" is there to remind me, that moves usually will take further than anyone expected. The market cannot meet the expectation of the majority, this would be contrary to its design, so it must take away money from the majority, and however strange price moves appear, by design they take money from most of us.
Patience is needed to avoid the game, when you do not understand it.
Taking Responsibility
Quite often the wife or girl friend appears, when we suffer from losses, as we try to blame somebody else. I remember a chapter from the book "Pit Bull" by Marty Schwartz. It starts: ' "Buzzy I need a new coat", Audrey said..' and ends ' " Very nice", I said, "But then it ought to be nice. It cost us eight hundred thousand dollars." ' Actually Marty is blaming his wife for not taking care of him as she should have told him to reduce his position. This shows that we always try to blame another person, if necessary the person can be blamed for not having disturbed or guided us.
Guess we need to take responsibility and accept our imperfection. It is all about reeducating ourselves and take the habits required for trading without depleting our accounts. The best description of this type of reprogramming can be found in the books of Brett Steenbarger.
Everybody - and this is certainly including myself - fights his own demons.
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Thanks guys. I thought a lot about it this weekend. I still haven't found out why I started doing that. I hope I got my lesson. Revenge trading is not working.
I'm happy it did not work, what if it DID worked (like only once) :-)
So MT is it Eminisniper system or you who is loosing money. I know you know the answer.
I like to follow traders who are making money and I think number of people in this forum are making it. Traders like BigMike FatTails, Jeff, Sharky and others. What do they have? Discipline!!! We all can learn more about Discipline.
TickVix/Gregory
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You might get away with this a few times, but in the end you will get caught. You were indeed lucky that the market did not reward bad behavior.
The problem is that your reactions are somehow natural. So you need to unlearn and relearn, how to trade.
25 years ago a 3-seated air plane crashed just in front in of my eyes. It was an ugly scene, the pilot was still in the plane bleeding from his nose and his hand was hanging down leaving the white bone of the arm pointing towards the sky. One of the two passengers was lying 15 yards off the plane.
What had happened? The pilot, prior to take-off, happy to take his friends for a ride, had quickly gone through his check-list and made one mistake. He had not opened the fuel valve prior to take-off. The plane started with the fuel left in the carburetor and the fuel-pipe, and then gained about 250 feet before the engine failed. By the way, the guys survived, but had to stay in hospital for several weeks. Modern planes have their fuel valve next to the carburetor, so they wouldn't have come that far.
Trading is quite similar, before putting on the first trade, we need togo through the check-list repeat our rules for the day, such as
(1) only take the setups that give us an edge
(2) always to take a loss, never move the stop further away from our entry point
(3) never average down
(4) stop trading for the day after three consecutive losses, or if our daily threshold has been met
(5) stop trading, if we are physically or emotionally unfit
When repeating these rules becomes a habit, this habit might break other bad habits. Imagine, if you can stick to these simple rules you will never see a large trading loss in your life!
I want to point again to Brett Steenbarger's book "The Daily Trading Coach":
Chapter 5 : Breaking Old Patterns
Lesson 41: Escape The Gravity of Past Relationships
Lesson 42: Crystallize our repetitive patterns
Lesson 43: Challenge our Defenses
-> includes a passage on revenge trading
Chapter 6: Remapping the Mind
Not going further into details. This book is one of the best that has ever been written on the challenges of trading. Although I also highly rate the books of Mark Douglas, the two books published by Brett Steenbarger on trading psychology are clearly the best that I have ever read. The other one is "Enhanced Trader Performance".
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It is not just loss thro the trade, but also the commissions on the trade. for 50 trades, I guess the commissions would have totaled to some $250.00
I read somewhere that Stock market is a zero sum game, but I think it is wrong. Market is a negative sum game. say on one ES contract, if you win 4 ticks, you got $50, but you actually pocketing $45 (after the commission) and if you lose 4 ticks, you lost not $50, but $55 ( after commission). So, the $ 10 (55-45), middlemen makes the money for every contract, no matter who wins or loses. Added to that, infrastructure cost like laptop, internet, software costs...yes, this is a negative sum game.
No this is not true, how you place your trades is not the markets fault. In Japan when futures originated out of the rice exchange, they didn't have computers etc. The fundamentals are 0 sum.
This was a daily pattern of mine for many months. That is why I am sim until I can get my head around not doing that. I believe if I can not do it while sim (which I was doing before sim) then I will be free of this bad habit.
It is funny. As I have been doing more trading and for longer, the less emotional anything I put on it. I really don't care much any more.
The following user says Thank You to bluemele for this post:
Hello Fat tails, It strikes me why trading always is being compared with flying :-)
We don't have carburetors anymore but it's fuel injected.
As a Private Pilot single engine, multi engine and instrument rated, plus I'm a Plane owner I can assure you that fuel selectors are still far from the engine cylinders. Far enough to do your taxi/run up, just make it a few 100 feet in the air and quit on you. It's one of my 'killer' items I always double check on the runway just before take off (AFTER my normal checklist). In fact, many check lists and pilots switch tanks during taxi (my plane has 6 different fuel tanks) but I tend to put them on the main tanks before starting and leaving them there because then I know that the mains are working, I don't care about my other tanks, I'll change them in the air at a safe altitude after take off. I have never made the mistakes in flying that I have made in trading. Again, that's why I don't understand why many people compare those 2. Flying is easy compared to trading, believe me.
There is also another dogma in flying that to be a safe pilot you don't use a checklist, but you memorize it and use the flow scan. Meaning you start from left to right watching and touching every setting. Research have shown that private pilots are sloppy on many items on the checklist, and by using a flow memorized checklist you are forgetting nothing. Maybe I can use that in my trading so I have something that I used in flying in my training :-) Before putting up a trade I quickly check for every setting before taking the trade, in a quick flow, from left to right
If you can develop a flow memorized checklist for trading - or let us say develop a ritual, which makes you always follow the same procedure before putting on any trade -, and if this checklist includes the five rules to avoid disaster, that would be a translation of your learned behavior as a pilot to trading.
I think that there are more similarities between flying and trading. There is a risk that something goes wrong. You need various skills and some discipline to follow the rules.
However, few have ever started flying a plane without an instructor.....
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And imagine you have a passenger or two in that plane with you, because I bet you never had a flying casualty. If you had it would have destroyed not only you but other people as well. As traders there is often insufficient self-worth to protect oneself against one's own destruction. But as a pilot what prevents more destruction is the knowledge a pilot would take down more than just him or herself. While there might be the tendency to blame others there is an even stronger human drive to protect others more than we care for ourselves. Look around at the love in the world. Otherwise civilization would just never have made it this far. If there can't be enough self-love at the moment imagine that checklist you review each time before you put on a trade is for the souls of your ancestors who are keeping an eye out on you because they brought you this far. They would want good things to happen to you and for you.
Or start a live trading room (with you trading on sim only, but hiding it, otherwise you are not 'profitable' anymore) lol
I have never seen a live trading room who shows a DOM were you can see there's a real account selected so trades are actually been taken. NEVER!!!!!!!!!
I watched the new guy at Trade the Markets, I think his name was Hoffman. He traded for the 3 days of the free trial I saw with a live Dom. Used the same platform as me, so it was not a sim version. I believe he was going to continue having his dom up every day thereafter. Brave man!!
You really need to consider this since we don't have the luxury of a risk manager making sure what started this post doesn't happen.
The best "revenge" is to stop trading for the session completely. You are making money so to speak by not losing money. Trading is hard enough to not trade on tilt and its not like you even get paid extra for overcoming that tilt. Even outside yourself too there is a good chance that the days range/volatility/whatever does not line up well with your method, so even in a good frame of mind you might still be taking it on the chin.
The only advantage we have vs institutions with a risk manager is that we can pull the plug sooner if starting to slide down that slope mentally since there is no boss to have to explain why you want to go play golf. So basically don't be afraid ever to hit the kill switch on the session sooner rather than later.
Rob Hoffman took two trades today for about 280.00 profit yesterday was about the same this week has been very light. He is very very selective about his trades all his time frames must line up with confluence of good Support or Resistance. He has some general indicators and several MA but trades mostly price action obviously not indicator free. His favorite quote is "My way or the highway". He does trade a live account and has not had a losing trade in the room in over a year. I am new to the room but supposedly he made well into 6 figures last year, that has been confirmed by others in the room.
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You have your set of entry rules. You see a setup, in a millisecond before you take the trade you go over all those rules again very quickly but now focusing if there is a slight thing that is saying why you should not take the trade: then don't take the trade. If that trade you didn't take turned out to be a winner, try to deal with it and move on to the next trade. Don't say to yourself I should have taken that trade. It's no use, it will put you in 'revenge' trade and 'overtrade' modus.
That is why I am sim until I can get my head around not doing that. I believe if I can not do it while sim (which I was doing before sim) then I will be free of this bad habit.
*drewl*