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Been struggling last few days with a serious problem. I scale out of my trades using a specific formula based on risk. This generally produces a net 1:1.5% RR.
Trouble has been this. Holding the second scale to full targets. Fear of losing what I already have on the screen. Yesterday I held a loser for almost an hour. To be fair, the original stop was not hit in that hour but the trade had stalled out and never really got above water. However, today, I had a few good trades on, and was unable to hold the second scale on all the trades. Out of 4 trades, only one was held properly. I see this as a significant mental problem.
After spending to many years looking for perfect entries that minimize or eliminates losers and finally coming to the realization that will never happen, I've finally learned the exit is just as important or perhaps more so than the entry. I don't feel like a beginner any longer, but this issue relegates me back to that status. Learning where to exit is both an art and a science. The science I have down pat. The art is more mental than anything else. Can you feel the market telling you the trade will continue as hoped or will turn and fail? Where to get to BE on the second scale? How much room and for how long....some science as well as art in this component as well.
I'm staying on sim a few more days while I work this issue out....I am getting better....just not good enough fast enough for me......
I left lots of money on the table today based on my method. I did pass on a trade as punishment for mismanaging the third trade.
Great job on that discovery of exits being as equal (or more imho) important than entries. You're no where near a beginner level, you're great and it's enjoyable to keep up with you on here.
Something I say to myself to help in in those moments... "Trust myself, trust my strategy, where's the strength?, where's the weakness?, hold while the premise remains valid." One of the best traders I know says those things (and trades just like we do as far as style goes).
You are not a beginner. Yes, you may be frustrated with your trading. Yes, you may not be trading your best. But that doesn't take away from the fact that you are an awesome trader.
I've been in a push toward more and more simplicity. I had a chart with some auto fib lines drawn, an opening range indicator, a current day OHLC, a prior day HL, daily pivots and what I have been discovering is that I don't really use those things that much. Worse, they sometimes put me off taking a perfectly good trade. So I figured if they weren't helping and sometimes hurt me, why have them.
The main reason I kept them so long was I was afraid of not having "context" or a fully naked chart. So I put those things on my higher time frame chart and I keep that minimized most of the time.
I still have a couple of indicators on my trading chart but here is what it looks like in terms of where my trades were today. I still keep the daily range indicator, the range and ATR indie at the bottom and of course the news indie. All of which I use constantly.
Arrows are trades I took and triangles are trades I could have and passed for some reason....the last one I was not at the screens so of course couldn't take it anyway, just marking it for posterity.
Simplicity is the ultimate sophistication, Leonardo da Vinci
Most people chose unhappiness over uncertainty, Tim Ferris
Have you ever thought that if price gets to 75% of your 2nd target a way of mechanically managing the trade @that point with logical WIGGLE room (enough for it to go to full 2nd target and tight enough to take SOMETHING in ticks if it reverses and eventually would come all the way back to your original entry)?
Reason I write that is that MANY professional traders use the concept of, if my trade gets to 75-80% of 'extended' target I will give it room to breathe but not enough to take it all back.
Some use volatility stop @that point or a 'time stop' (not my preference) or an 'overbalance' in the opposite direction or they use a mechanical trailing indicator for stop out @ the mentioned 75-80% of the extended target.
Good luck getting to the root of your issue. Stay the course.
I've been experimenting with moving my trail to the 1st target if price gets to 75-80% of the second target...only done that once or twice and both times it cost me the second target.....but I still think its probably a good idea...
Simplicity is the ultimate sophistication, Leonardo da Vinci
Most people chose unhappiness over uncertainty, Tim Ferris
My brother (he runs a GM Union Pension Fund in Detroit--don't hate on him for that please).
He has a kid on the way @44 years old (in addition to his 2 adopted children).
His commute is 45 minutes into the GM building each day so he reads it while his driver gets him to and fro. Then he uses it when he is frazzled at work and especially at home.
His older kid, now 12 stresses him out and his in-laws can do so as well (@times).
I turned him onto it after I posted about it in my journal (on another site 3/16/12); so I bought the Emwave 2 and 3 books/courses for him in late March--he is digging the vibe after 10 weeks {especially the Emwave 2}.
He is thinking of testing it on his 2 underlings {but not in an official capacity @GM}.
I don't have one because I don't have any stress (no kids/no wife/no boss) and am a deep-breath afficianado and I have done Yoga since my hippie mother introduced it to all of her kids around 30 years ago.
Thanks for the input. I've noticed in my trading that during a trade, especially one that isn't moving very fast toward my target or one that has moved quickly toward target and then stalls just before the finish line, I start to lose the ability to think rationally about what is happening. This is not 100% of the time but often enough that it sabotages my PnL.
So reading the HeartMath book and realizing there might be a reason for the irrationality based on emotion, it seems plausible that this might work.
