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Virtual Sim today....didn't even click the button to buy or sell....just watching and getting ready for next week.
I played around with colors on my NQ chart....trying to make things even simpler and just focus on the important details...like levels. Not sure if I'll keep it that way but I kinda like it so far.
CL has range expansion today which is nice to see. Triple the ADR from the previous 10-15 days or so. Hopefully that will continue into the coming days and weeks.
The trades today were pretty much perfect with great follow through. Regardless, its rinse and repeat.
Simplicity is the ultimate sophistication, Leonardo da Vinci
Most people chose unhappiness over uncertainty, Tim Ferris
1. I still have an issue with closing trades to soon....especially as it gets closer to my intended target. I trail my stop much closer only to have it take me out then reverse to my target. This seems to happen over and over....one of those things I know NOT to do but do it anyway....I am afraid to give any back....I do it on both sim and live....so its not a live money thing.....I have an appointment on Monday with a shrink to talk about it...we will see.
Simplicity is the ultimate sophistication, Leonardo da Vinci
Most people chose unhappiness over uncertainty, Tim Ferris
Arggg...just when I thought things were getting better healthwise, I came down with a severe case of tendonitis in my wrist and shoulder just a few days before Christmas. I spent most of the holiday's away from the computer and my wrist and shoulder got "better". Yesterday and today I have spent a bit more time at the screen...and my wrist is killing me...I can barely type....so gonna have to limit my posting to the bare minimum until I can type without pain....could be weeks according to the doc......and yes I've tried Dragon Naturally Speaking and I hate it.....I wish it worked better for me, I love the idea....I've moved my casual internet browsing and email primarily to the iPad and that seems to really help....but trading and posting are still at the keyboard...and that is painful.
Simplicity is the ultimate sophistication, Leonardo da Vinci
Most people chose unhappiness over uncertainty, Tim Ferris
Hope you feel better soon Brian. I know what your going through as I have experienced the same in the past. For me only time and limited use of the mouse hand is how it healed.
Take all the time you need. We're not going anywhere so we'll patiently wait for your insightful posts.
"If you're going to panic during a trade............. panic early."
@PandaWarrior -Brian, this is a classic example of "prospect theory", which states that people are willing to settle for a reasonable level of gains (even if they have a reasonable chance of earning more), and are willing to engage in risk-seeking behaviors where they can limit their losses. In other words, losses are weighted more heavily than an equivalent amount of gains. My wife thinks this way every time she looks at her paycheck and sees how much money has been deducted for taxes. She doesn't want to work anymore, and earn more money, because she does not want to pay more taxes. Although she would benefit financially from the additional after-tax income, prospect theory suggests that the benefit (or utility gained) from the extra money is not enough to overcome the feelings of loss incurred by paying taxes. It is also one of the reasons why last year's bull market in equities, was missed by most. I find that many people who missed the stock rally (and I wish I had been more aggressive) rationalized the opportunity cost and inherent risk of "chasing" the market by thinking that the people who participated were "wrong". The rally had been "engineered" by the Fed. The long term fundamentals didn't support the expectations. It's going to end badly. The Nikkei didn't go anywhere for X years so the S&P will do the same. Blah blah blah - and a ton of money was subsequently, left-on-the-table.
Hedonic framing is suggested as a way of overcoming this bias in decision making. I've attached a pdf. on the subject for you to read. Try these methods of framing your thoughts and see if they make you more positive and help change your mental approach.
Also, purchase and read the following. I don't agree with everything that is posited in the book, but it does offer many insights into decision making and helps you understand why you make the decisions that you make.
@PandaWarrior: Once again, this is one of the main problems that inhibits consistent profitability in trading. Learning what to do, and actually doing what you learned under pressure are two different things. And once again, it goes back to one's desire to maximize the chance of gain, not to maximize the gain itself. Getting out of winning trades prematurely, is an obvious manifestation of this phenomena. All it serves to do however, is make one feel better AT THAT MOMENT IN TIME. In reality, it is to the severe detriment of long-term performance. One has to realize that trading is a big-picture endeavor, and what feels good in the short term, is most likely counter-productive in the long term. Quite simply, leaving a large amount of money on the table, or worse yet; missing a major winning trade, is just as bad , if not worse, than a losing trade. The market however, lulls you into complacency, and even reenforces this natural behavior, because it spends more time in ranges than in trends, where small profits quickly vanish. You then learn to instinctively cover trades before they return to your entry point, or turn into losers.
What makes matters worse, is that that your exits command top priority in the trade decision hierarchy, followed by trade size, and entry point. Liquidations are far more important than initiations, and harder to get right. When you enter a trade it is the most hopeful point in the trade cycle, but come exit time, stress, cognitive load, emotions and bias, have reared their ugly heads, just in time to distort your expected value of the trade. Having a predetermined target and sticking to it is not the answer, in my opinion. In most cases, people are going to get out early anyway, and it is tantamount to trying to predict the market. It is more important to concentrate on projecting losses, risk management, and finding signals that produce trades that are well defined, have a proven edge, and are reproducible, rather than trying to out-guess the market.
This means that path dependency is what matters and awareness of it's variability, duration, and signal are critical components to optimizing any trade, not some arbitrary line or inferred sufficient profit. If price action or your expectation dictates the market should continue in your favor, why get out ? And, why use a target, that you're not going to allow yourself to hit as your exit point? Exit the trade when price action/signal tells you the trade is not good anymore.
