Gary, one of the stats I started keeping this week for my trades is "time to BE" and "ticks to BE" for winners--this says how long I waited (in minutes) before moving my stop to BE, and how many ticks of positive movement I got before I did so. I also am keeping a record for losses that has an "ideal stop" for when I am shaken out prematurely, and "ideal time to BE" and "ideal ticks to BE" to determine the optimum stop strategy for the trades that would have been winners but due to mismanagement, had me out. I am also keeping a record of losses that fit the category of "you were dead wrong here partner" so I can differentiate between losses, because they are not all equal.
My anecdotal experience tells me that when I am right, I am usually in the green within 5 to 20 minutes with a positive movement of 8 to 10 ticks, and my entry is never touched after that amount of time and distance from entry. If my stop is hit after that, I am usually simply trading with the wrong team at the moment.
I do not have enough data to determine the objective stats, but perhaps that is something you might want to keep in your log as well. I hate doing it because it requires me to write it down as it happens, but I think it could be valuable. Also for winners, I'm keeping a note of rotation cycles--it goes +8, then -6, then +12, then -5, then +8 to target, or something like that. If I can look back on a record of winners and see that it rarely goes +20 with no rotations, then it hopefully will give me the confidence to continue to improve in riding my winners, even when natural market pullbacks occur. The previous set of stats hopefully will give me some more objective idea of stop strategies; if the market goes 12 ticks in my favor, hardly ever has it come back to test my entry and then gone in my direction. This is partially due to my entry style, so when people say "don't move your stop to BE too soon," well this all depends on the timing and location of the entry, so I'm trying to find my own personalized answer so that I avoid a loss when unnecessary, yet I still give the market enough time and distance to work for me, based on what is a "usual" trade for me. I don't know if you keep these kinds of stats, but I am hoping that for me they will be enlightening and help me to improve my trade management.
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No, not in writing, but in my head somewhat. I am rarely in a trade that I could not get 8-11 ticks on, but "rarely" could mean 33%? (My guess would be closer to 20%)? I don't know. I know what you are saying about right or wrong fast. I actually often feel I should drop a trade if it does not work out within a certain amount of time, but again, that is a feeling. The problem I have with exact numbers is it is all different; the background. Hopefully as I get more comfortable with MP I will start to have limited classifications of background.
The phrase "control your emotions" still reigns as near gospel in the trading world. It's odd that more people haven't noticed that even logically the idea is incorrect. You can feel WHATEVER you feel - it is only what you DO that makes or loses money.
Jennifer Lerner, Founder of Harvard's Decision Science Library, has been known to say that brain and psychological science ignored emotion for 60 years. She is right. In the 1950's, with the rise of computing machines, researchers started thinking of the brain as a computer.
As it turns out, this path ignored the critical element in decision-making - the feeling of confidence (and it's opposite, fear, anxiety and doubt). Science now knows that every decision includes this confidence factor and without it, there are no decisions. This brings us to the better strategy of "emotions (and feelings and senses) as information". It also means we need to learn new ways of gathering and understanding this internal data.
Traders more than any other group are provoked to "DO" (or act-out) the emotions and feelings they are not conscious of. The effort to keep feelings at bay - the control part - actually increases the odds that a trader will indeed "DO" that feeling - instead of just feeling it. The feelings exist in the form of neuro-electro-chemical energy and as such that energy is either expended or stored. (You know how you feel a momentary relief of tension right as you push the button - that is the energy being dissipated.)
Learning to work with feelings and emotions as information can be done. It requires un-learning most of what you have been practicing but it can be done.
Every time you use this new skill, your bottom line improves. Either you avoid acting out - and losing (which puts you in a mental state to take the next good trade) or you limit the damage by curtailing a tilt or meltdown day before it spirals out of control. Next, you can read the acting out of other people - and even the patterns of the algos designed by other people - because you are familiar with the real source of the decision-making of the traders you compete against.
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