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I have been lazy in adhering to my strategy. Before tomorrow's session I will re-write my trade plan explicitly, to allow no room for discretion. With clear and stringent rules, I will have no excuse to blame rule-breaking on a loose interpretation of my trade plan as I have subconsciously done since I began trading. Winning trades always felt like I did everything right where losing trades made me think "well there must be a reason it didn't work." With a strict trade plan, hopefully I can eliminate this problem. Both losing AND winning trades should begin with indistinguishable setups. As you said, some work and some don't, but I should not fault myself for the losses and congratulate myself for the winners.
I will say, in my experience, the biggest driver for me to follow my strategy is simply the accumulated pain of deviating from it and losing because of that, and because of the confusion and sense of instability when I know I'm not doing the right thing. In my opinion, as long as you explicitly state your trading plan with emotional significance (this is critical), your idea for tomorrow morning should do. When it comes down to it, what really matters is what you do in the moment while you're trading. This isn't to say to repeat your rules or your strategy as you're trading, but perhaps to recall your bullshit as a source of motivation to do what you know you should. What happened with me is that I kept doing the wrong things over and over and over again until I got tired of my behavior- I hit a breaking point, and I just got serious. I was terrible at holding my trades, so I decided that for a whole week, I wasn't going to interfere with any of them after entry, despite what was going on in the market. I established this goal in my journal a month (maybe months) ago, and it held me accountable. After that practice, I didn't want to close trades- but, I went onto developing other skills, and fell back into closing trades early. Habits can come and go, for better or worse.
This is extremely true. I need to actually adhere to my rules. Not sure how many times I have to say that before it becomes true.
You will. It just takes experience/pain and more time.
This is gold. The downward spiral is a very real thing. I haven't run the stats yet but I believe that over 90% of my losing days begin with a losing trade. Clearly my judgement becomes clouded when I feel pressure to get out of the hole. This shouldn't matter. My job is to execute my edge every time that it appears and allow the results to take care of themselves. (exactly)
You should find a way to nip that in the bud. Run the stats, analyze your losing days, and get creative and establish some preventative measures. Mindfulness/meditation is brilliant for this sort of thing, or for trading as a whole to be honest. Specifically and theoretically (if you can manage to do this) it would be great if you could be able to watch yourself after your first loss of the day. Analyze how you feel, your thoughts, impulses, etc. You could do this by walking away immediately after losing, which is harder said than done. But yeah, you may become subtly aggressive after a loss, and become hypervigilant to trading signals, because like every other human being, you want to make your money back. If you don't meditate already, check it out man.
Thanks again Zach. I will write my trade plan and post it here in the thread as an additional accountability measure.
No problem, @mtzimmer1. Be tight with your strategy tomorrow. If you see an opportunity that your strategy can't take advantage of, it doesn't matter. It's more important that you stick to your guns, in the long run. Great job so far by the way, keep it up man. I'm growing with you!
I like those odds!
50% chance of -1R
16% chance of BE
16% chance of 2R
16% chance of 4R
Comes out to 46R/100 trades! Sign me up!
I don’t know the expectancy of my trade plan as the data I am collecting is flawed by my poor adherence to my rules. My setups are difficult to backtest because they require a fairly intensive daily prep.
Thank you for the reminder that results take care of themselves when you execute on a known edge.
Man, if I could give you one little piece of advice... it would be to not read too much into it. I've had streaks where I literally lost 10... 15.. 29 trades in a row LOL. Well maybe not that many but you get what I'm saying... it does happen, or at least it feels like it. Then you effing nail one and back on track... or maybe not lol.
For me, trading is all about dealing with uncertainty, no matter the efficacy of one's purported edge. Humans are notoriously ineffective at it. Survive to trade another day, and beat yourself up as much as you need to but no more... then move on.
Thank you. I know I should feel and act the same way regardless of whether I’m winning or losing. Easier said than done, but I will continue working on it.
-Entrances are executed with stop orders trailing micro swing high/lows once price has entered the area of interest
-In instances of extreme price movement that does not allow retracement to the specified area of interest, stop orders beyond the current swing high/low are acceptable for entry
Trade Management:
All trades to be managed in accordance to the following steps:
-Initial stop is placed beyond the previous swing high/low
-If price violates the area of interest but does not hit the initial stop then the stop is to be trailed aggressively
-If price respects the area of interest, then the stop is not to be moved without significant reason
- If price approaches the previous swing high/low but sharply rejects from the area the stop is to be moved to the current swing high/low in the area of interest
-If price breaks the swing high/low, the stop is to be moved to just beyond the acting swing high/low
-If swing projection decreases or depth of pullback increases considerably, then the stop is to be trailed aggressively on the next swing
-If price reaches the opposing significant level then the stop is to be trailed aggressively
Man, you are a killer. That equity curve is smooth. Thank you for sharing! Here is hoping that I’ll be able to post a similar screenshot in a couple years!
No setups during my session today. There was one trade that, without explicit rules, I probably would have taken. It resulted in a loss.
Feel good about today. I can see a great potential setup forming now, but I have many other tasks to get to today. Gonna come back tomorrow and do the same thing I did today. And the day after that. Etc. Consistency creates greatness.
In an effort to be more positive about my trading I am going to treat today as a learning experience instead of beating myself up over it.
Today's Positives:
Price reacted precisely off my predetermined levels. This helps to give me faith in my analysis.
Trade 1:
Continuation Trade (Trend Trade) that was a 100% by the rules entry. I identified that the nearest major level was a comfortable distance beneath us. There were no signs of the trend deteriorating yet. Price entered my area of interest and I entered with my entry technique. Price chopped at my entry and I bailed on the trade, fearing I had missed something critical in my analysis and the market would turn around and deliver to me a loss. My rules state that I need "sufficient reason" to close a trade prematurely. What I learned from this trade is that I need to re-write that section of my trade plan to allow less discretion. Price dropped to my target, where trailing should have begun, and then promptly reversed giving me a long setup.
Trade 2: Countertrend Trade that also was a 100% by the rules entry. Also in my rules, it is stated that if price reacts sharply off of the current swing high/low I can close the trade prematurely to prevent losses. That is what I did on this trade. Immediately after covering, price shot upward and eventually hit my AOI to the downside where I would have covered the long and considered reversing again to the short side. I also need to remove this caveat from my trade plan as it allows more discretion than I am capable of handling.
Results:
2 BE's that should have been healthy wins.
Woulda-coulda-shoulda isn't helpful for anyone but, had I interpreted my rules differently today and been less aggressive with my stop, I would have made up over half of the drawdown I am currently in.
Self-Eval: Technically I followed all of my rules today. I interpreted my exit rules liberally and this ended up costing me big time. This was a great learning experience, and I will now update my trade plan to reflect these new developments.
Thoughts:
When I began trading, I spent hundreds of hours trying combinations of indicators, searching for the golden goose that would make me rich. Now I have the golden goose - a definitive system with a repeatable edge - but I can't seem to bring myself to collect the golden eggs. Go figure! I never would have thought that psychology would be my limiting factor.
