If you find yourself spinning out of control emotionally and making rash decisions, then perhaps you need a more rigid gameplan to keep yourself in check.
I am not suggesting you adpot a mechanical approach. But I wonder if you could take what you currently do and make it into something that more clearly defines your entry criteria and where/when to enter and exit once those criteria are present.
Do you think that would help? What kind of a plan do you currently have?
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Um... yes I think it will be a tremendous help. I currently have no plan at all. Only a method of discretionary, seat of my pants, trading.
I literally fire up the charts in the morning, and discretionarily trade what unfolds through the day with price action. I'll have an idea of the major support resistance on a longer timeframe, and then I get a feel for the flow/directional bias (or a range if that develops) and take pullbacks that line me up with that bias. The closest person I've found to trading like me is @PandaWarrior.
Now, there's a whole 'nother confusing thing to throw into the equation here, as lately I've been trying to trade like @Private Banker. I've started limiting in at predefined levels and fading moves, as well as really trying getting a feel for the bigger picture with TPO's and such... which is totally totally different than how I've always traded. Typically, as I mentioned, I get a feel for which way the market is trending, or rangebound, intraday, and play accordingly regardless of what's happening on a daily timeframe.
Where does this leave me, and let's get back to the topic at hand of coming up with a trading plan?
Ultimately through listening to a client-only stage 5 (my brokerage) webinar at lunch today, @FuturesTrader71 talked about how he watches what happens as price action unfolds on his trading timeframe. How he described his process of reading PA to feel like "long" or "short" was the proper play for the time is EXACTLY how I do it. It was as if we both developed this sense of inuitive feel for the flow the exact same way unknowlingly. This today, solidified my approach in the precise entry for trades. I feel most comfortable with this style of juuuust seeing it roll over and pull the trigger based on PA, rather than the way Ben limits in at predefined levels. I just can't do that right now.
THE MAJOR part I feel I've been missing is C-O-N-T-E-X-T. This contextual piece is why FT71 is a better trader than me right now. (That and a disciplined risk management plan).
The contextual piece is where I feel @Private Banker and his style of determining the context of things like, what happened yesterday, in the context of a daily bracket (FT71 would call this an area of balance). Then what happened overnight, within the context of yesterday. Where do we open, within the context of yesterday (or in the case of a large overnight movement, where are we opening versus a previous session's range we're now in). What happens on the opening swing within ALL of this context. It's powerful information that can really aid in helping my trading because it gives me CONTEXT. I used to not have a freaking clue about what all was happening with that other stuff. I watched the open, and if we're making higher high's and higher lows, I just get long where I can. ADDING CONTEXT TO THIS SKILL I HAVE DEVELOPED OVER THE PAST 9 YEARS WILL GREATLY ENHANCE MY PERFORMANCE. It's been a growing pain lately adding this though, because there has been so much to consider, and every day I'm getting stronger and stronger. Then I fall flat on my butt, but then I get back up, dust myself off, and get stronger.
Ok, sorry, back to the plan.
As you can imagine, it's going to be tough to develop the "entry/setups" portion of the trading plan. BUT that's ok, because the most beneficial part of developing a plan is going to be the risk management plan. It's not going to be revolutionary, and I've written out things before, but I'M GOING TO FOLLOW IT, and you guys can hold me to that. I'm going to open up the transparency on this side of things. I'm going to tell you exactly what I'm supposed to be doing, so if I screw up, we'll all know it. There will be nothing to blame but myself. It will be very clear as to a violation of the trading plan. Where as right now, I figure my style of trading, and what I do, is quite ambiguous to most other than my closest trading friends.
You know, maybe I should continue to show entries and exits here too (I said earlier today that I wouldn't be doing that) so I can show whether I'm doing what I'm supposed to be doing in that arena too.
I've rambled enough for one post, I'll be around. Working on this plan.
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I would like to make a suggestion and a observation. Starting with the latter; If your flying by the seat of your pants then you may have a difficult time writing out a plan. I to did the same thing and I had a difficult defining a trading plan because honestly I did not know what I was doing. the Suggestion: It was not till I started detailing every trade did I finally start seeing a pattern in my trading that I could write out on paper. After every trade I stop to post to my journal with charts and notes about the trade. This does a couple of things (at least for me) it forced me to analyze the trade and the other thing is it gets me away from the market and keeps me from making another trade to close to the last one. Most of the time these were ill advised trades based on the outcome of the last trade.
The other suggestion would be to look at larger time frames to get a reference on where the market is going. I started doing a analysis every morning of where I think the market is headed. This has paid off well.
If I would be you - I would add these 3 rules and focus much less about the rest for now (which you more or loss can do: find good trades, study,....)
1/ I decide that I will NEVER add to a losing trade.
2/ I decide that I will put a stop for each trade and will not move it. The max value for every stop is such that I can follow rule 3:
3/ If I REACH my max loss of $XXX per day I decide that I will stop trading for the day....
I would not worry about making or losing money (for now). $$$ will come after -and only after.
Print the rules, write the rules, dream the rules, repeat the rules to yourself 100's times a day... until your brain accept them as the new normal.
Make your goal number 1 to follow these rules EVERY DAY - however painful it will feel at first.
IMO, if you can do this. The rest will be peace of cake....
Can you master yourself?
Can you follow these rules for a week? 2 weeks? 1 month? forever?
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I admit I havent read through this entire thread but when I saw that the OP does not have a written trading plan I must admit I was completely Floored!
My entire written trading plan is well over 80 pages in length and encompasses every detail of everything related to my business in great detail(maybe this would best be categorized as a business plan). I have never met another professional trader who does not have a similar plan.
The actual mechanics of entries/exits and risk management absolutely MUST be exhaustively compiled,tested, and reviewed to have an honest chance of having any success.
I can only speak from experience and my personal plan but I wont even launch a small account without a plan that
1: I have failed to test exhaustively to the tune of DOUBLING 3 accounts on demo utilizing a 1% risk per trade methodology
2: Have a up to date trading journal complete with notes and pictures each and every trade
3: Reviewed the methodology and absolutely KNOW my edge and maximize its potential while simultaneously minimizing downside risk
That is just the beginning..... there is sooo much work to do my friend. I hate to see you fail in this venture and I dont think you need a psychologist... What a successful trader needs is CONFIDENCE, PATIENCE, DISCIPLINE, and CONSISTENCY.
IMHO this only comes through absolute exhaustive testing.
Good luck brother. I really honestly want you to have great success with this because it seems like you really want this vocation in life.
Keep your head up and put in the work man...
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I wonder how much of these 80 pages you remember in the heat of the moment and at all. From my experience in business huge business plans are rarily even read fully by the managemnt after consultants draft them. However if you count into your plan lots of historic trades and back test screen shots than yeah but its not a plan its a log.
Doubling test three times is solid but will take possibly two years and if you trade a specific system chances are your system will become irrelevant before you finish. I have seen it way too much with automatic trading systems. They start off well and some people start running them on demo for 6 months and them put live with a big risk. By this time market has changed and system became a dog and losses ensues.
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Frankly the business plan is all aspects of running a business. Everything from Self purpose/trading goals to disciplinary rules and Hardware/software setups.
Im only trying to help, and while I do not claim to review and/or update my plan every day. I ABSOLUTELY have it on the middle of my desk with trade Journal right next to it. I also review my business plan it its entirety during my weekly and monthly self-audits(also an integral part of the plan)
Like any other business it takes work, foresight, preparation and execution. It is obvious the OP has the ability to work hard. It just seems to me that he put the carriage before the horse a little bit in not absolutely mapping and testing a viable system before tackling the real deal.
Just my .02, please take it for what its worth. I can only speak with what has transformed MY life and worked for ME alone...
Although my tale is one that many successful traders seem to share...
Again GL man, I really do think you can make it....
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