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Catching Big Waves - a trader's journal of surfing the the markets
Here is the problem. The need to be right. There is no right. Only probabilities. Release the need to be right and the fear, greed, anger and frustration will slip away.
You are good at the self analysis, and we all should be but at what point do we look in the mirror and say enough is enough and start working the probabilities and simply be happy with those? Extended self abuse like this is gonna drive you insane.
Facts are what drive us:
So here are the facts:
1. You have an excellent grasp on market movement. Maybe better than most on the forum.
2. You know how to control risk. This is an excellent and perhaps the most important skill as a trader to possess.
3. You know how to scalp and you know how to wait for the larger moves. Both excellent skills to have.
4. You recognize when you are emotionally struggling in a trade and appear to be able to deal with it in a constructive manner.
5. Your main weakness at least from an outsider point of view is your need to be right and somehow always catch the big ones and ride them to the very last tick.
If I were your boss on a trading floor, I'd tell you to stick to the plan even if it bleeds some days and to stop thinking about it so much and to decide once and for all what your trading style is gonna be. Scalp or swing but not both. Or develop a style that incorporates both and stop worrying about it.
Why? Because no matter what you do in terms of style, you are always going to be unsatisfied. Scalpers leave money on the table. Swing traders are wrong a lot more. There will always be money left on the table no matter what you do. There is no mental satisfaction to be had especially if you are banking on being right to obtain that satisfaction.
Your job as a trader is to play the probabilities your edge gives you. Nothing more. Your job is not to be right, nor is it to capture every last tick of a move. Your job is to make money. Plain and simple. This is not academic. There are no bell curves to grade on here. You either make money or you don't. All the rest is just bullshit.
The great thing about trading is you can make money by being only partially right. Some of the best are 30% winners. That takes an incredible ability to be wrong A LOT. Can you do that? Can you be wrong and still make money? Can you accept the fact you can be wrong most of the time and that the name of the game is to make money, not being right all the time?
I like your friend Peter's approach. Just relax, forgive yourself, let the complexity simply escape your life with the next breath you take. As they say, "just breath". Let it happen. Be OK with being wrong. Be OK, with scalping sometimes. Be OK with letting something run for 3 hours only to watch it run 400 ticks after you close the trade. Be ok with letting it run for 100+ ticks sometimes....just be.
All of life is a coin toss. We take risks in every thing we do. No where else except trading do we stress about the 50/50 nature of life. Even driving a car is 50/50 but we accept the risks and keep doing it knowing we can drive away from our homes and never return. We are casual about it and yet for consequences far less than death, we stress and stress.......just let it go.....turn it loose. You won't miss it.
Remember, just flow with it. Let it happen.
Cheers......
Simplicity is the ultimate sophistication, Leonardo da Vinci
Most people chose unhappiness over uncertainty, Tim Ferris
A word cloud experiment...
Panda focused on the need to be right which is a frustration you have. The time aspect also seems to bother you (possibly more) because of the random distribution between time/reward. So control what you can and let the rest go. Are there other things you would rather do with your time or is the pace just frustratingly slow? Set longer goals. The trade isn't the goal the quarter return is, etc.
...word cloud of your frustrated post to add to your art collection
Time
I once suggested a trading idea of hopping from resistance cloud to resistance cloud riding trends. Visualize jumping from your cloud above to the one below. Start bigger picture and don't get bogged down on any single trade. You have the skills. Now leverage what you have...
skills + time =
“Be who you are and say what you feel because those who mind don't matter and those who matter don't mind.” - Dr. Seuss
The short version, Google is not afraid of failure. They make acquisitions and start new projects without fear of failure, because they realize failure is part of the game and they still benefit and learn from it.
Wouldn't it be correct to calculate RR on the complete position once fully closed, including for the scalp portion, which may have a negative RR by itself?
It depends on how I look at it. I don't track the percentages of various targets, but just know that I could get a smaller target with greater frequency than a more distant target. I did not come up with the concept, heard it in a webinar recently, and then again in a book, so I built a spreadsheet to look at it.
If I set a stop loss at 15 ticks on 2 contracts, and have a target #1 of 25 ticks and a target #2 of 50 ticks. I am risking a total of 30 for the possibility of 75, giving an initial risk to reward of 2.5.
Let's assume I can hit an 8 tick target with a 15 tick stop loss 75% of the time (1.6pf). If I add that to the two above, and my target hits, what happens is I now have 8 banked, reducing the risk on the remaining two from 30 to 22 ticks total. The RR remaining goes to 3.41
Obviously 25% of the time the trade will lose on all 3, some percentage I may only hit on the 1st target etc. But trying to expand my thoughts around never really knowing anything, I am trying to look at it not as win or lose, but variations on that theme.
