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It's good that you found a way out without needing to use tools like this. Myself I have been meditating for over 10 years but still (maybe due to my ADHD) sometimes found myself overtrading and this is where GAT helps me.
Trading is such an individualized journey and what works for one may not work for another.
I am a profitable trader, but a I have moments of weakness where I may revenge trade or may enter a position right after a losing trade. I want to minimize these small missteps from happening. So far, I have been stopped out once, and it reminded me to take my 5 minute break before another trade. Another time, I hit my max trades for the day. I was glad to have both these reminders. I dont want to turn a good green day into a losing day over my brain going to mush in a moment of lizardness. If you think that I am undisciplined using this tool, then so be it. But so far, it has performed fantastic for me.
for anyone who does an evaluation, you can limit your daily loss, your lot size, and trailing drawdown. It is like having a boss there telling you to stop. I am glad NGtrader mentioned this add on in here. It is like having an insurance policy
I do use the GAT addon as well for some time now and I want to share some ideas about my own experiences with it in context with discipline issues.
Discipline Issues
I do entirely agree with people saying that the discipline has to come from the trader himself. And not only for the risk management part but also every other aspect.
Often this has to be learned the hard way, by being burnt and may some major losses due to it. This will get you leveled/grounded and genuinely wanting to get control over discipline issues.
Because in my opinion, using a risk management tool alone, is not enough to get control over this problem. One have to understand the circumstances in which he lacks discipline to stick to the rules, what's the underlying reason they happen, knowing and detecting the early signs of errors which are about to happen.
So thinking this tool alone will let you get rid of discipline issues instantly is probably unrealistic. But it definitely can be part of the process to work on it.
It can be some what the role of the risk-manager in a prop firm for the retail trader which has to rely only by himself.
How can it help in the traders progression
Why I think that this or a similar tool can help traders working on their discipline issues is that by enforcing the rules which can't be bent, over time the trader gets used to them.
So this suggests that by having these hard limits in place, where there's "nothing" you can do about them, this will help you to build a habit around these rules. Eventually you'll end up accepting these limits, because there's no way around it.
Also trading decisions are often counter intuitive (for an aspiring trader), which sometimes is difficult to understand in the heat of things - that's why we need a well developed and rationally designed system before we are in the "game".
Over time, by having enforced the rules, and seeing that they do have a positive effect, this will help to genuinely trust and apply them.
It is also very convenient to be able to adjust these settings within the trading platform, instead of being dependent on the broker and calling them for it every time I want to change something. And obviously there are more possibilities by using the tool instead.
Examples
My discipline issues weren't permanent, they happen under specific conditions. By working out exactly the conditions in which I get emotionally triggered, I knew which limits were critical for my trading, in order to avoid getting into tilt mode.
Here 3 examples:
1) Trade time window
I did trade the cash open, because I had experienced decent returns. But the journal data over time showed a quite negative profit over the long term. It's a combination of patterns within the Overnight Inventories and the following Orderflow at the cash open. So I often got tempted to get involved regardless the fact that I'm not profitable with it.
>> So in order to break this "habit" I simply put in a trade window in GAT, which allowed me to only trade 9 minutes after the open. So I couldn't get involved with this setups anymore. With time I got used to it and I don't even think about this pattern anymore.
2) Boom and Bust session
The better I was doing in a session the higher the odds that I'll give away the entire profit.
When doing particularly well, especially when having a high win ratio, I recognized that I was getting more and more focused on my intra-session PnL number. It feels like being in perfect sync with the market and that I could not be wrong. Dopamine and emotions were more elevated and the rational thinking faded out. I would then have unavoidably a major loss, couldn't accept it to be set back so far, although still in profit. This always marks the tipping point where I get triggered. By the lack of patience to wait the next reasonable opportunity, I had to get it back instantly, which lead to executions with rather low probabilities. The only result was extending the loss even further, I got completely tilted and would bust the entire profit down to zero or even down to the max allowed daily draw down.
>> I set a draw down limitation from profit target. This draw down from profit limit was activated (trigger point) once I passed the daily profit goal and would only allow a minor draw down from there. As this configured draw down from profit was even smaller than the maximal possible loss per trade, I got very often stopped out once this rule was triggered. (This has a reason why I've chosen a smaller value than the position loss size rule) So a rather undesired secondary effect was the fact that I couldn't continue although the session had still very good opportunities to offer from there on. This was somewhat frustrating and for sure effectively cutting my upward potential per day - but I figured that discipline wise, I was not ready yet to handle such bigger winning days, hence the importance to work on this issue. So I left the rule on. Over time it got used to the fact that once reached the daily target, the session will likely be over from there. So I had to particularly patient and wait exclusively for setups with very tight SL. And the result of this was, that I'm way more patient and relaxed with my trading. It increased my overall selectivity of opportunities, even outside of this rule. Also the trade count per day got lower.
3) Beliefs and changes in trade management rules
In my particular trading system, the performance data showed that I'm better off to cut some trades closer to the entry, when they don't advance soon after entry and pushing against my position.
Simply stated, the data suggests to be more profitable by re-entry with another attempt at a better trade location, as long as the setup is still valid - or move on for a new opportunity. This is how I have historically accumulated the most hits of max allowed position losses (max. Stop Loss) over time did. Although there were cues way earlier that I would get stopped out. And this effectively hurt my overall risk reward ratio. Although in action, I struggled to believe that this was the right thing to do, as I was used to the applied stop loss range and the fact that I was highly positive that the setup was very solid. So I was tempted to always leave wiggle room until I reached max. position loss rule, which on the other side I do respect. Technically this is very wrong stop loss management in my opinion, as it had nothing to do with information coming from the market data, instead I was solely trying to hold on to a trade which I was married to. I just had this bad habit/believe internalized for this particular situation.
>> I setup a lower max possible position loss limit in GAT which forced me to abandon these type of "failed" entries earlier and practicing re-entries in the same setup if valid.
By seeing the positive impacts in the session debriefings (getting rid of these unnecessary excessive losses), I do genuinely believe in this change of practice, which makes it more natural/easy to stick to it.
This although does temporary impact other setups, which technically do need more wiggle room, so I have to use way smaller position size. But for me it's more important to build the right habits for the long run, than the short term performance.
Continuously vs. temporary use of GAT
I think GAT can also be useful over the longer term too. In the end we are still humans and are therefore susceptible to make errors. Anyway in my case I know that I'm sure still capable of breaking some rules on a bad day, to be honest. Therefore I do keep some rules in place permanently (like daily draw down limit).
I think this is very dependent for each trader.
Eventually my goal for the long run is to be self reliant on my own discipline at one point. Because as a discretionary trader there's may place and time to be more flexible with some rules. But until there, I have still a long way to go.
Other rules on the other side I do only use temporary to rectify bad habits. As some restrictions are often conflicting with other situations.
(See example 2 and 3).
Another nice feature is the "Lock Session"-Button, where you can block trading for the rest of the session. This can be helpful in a stage on your progression with discipline correction, where you have a good understanding of your behavior and patterns but not yet worked out a functioning solution to it. So whenever you detect early signs of you losing control over discipline, you can block yourself out before things get worse and out of control. This sounds silly, but again, when you have worked thoughtfully around your mental game issues outside of your sessions, this can make sens.
The tool itself
- There are quite many rules and rule-variations (parameters) you can use with GAT, depending on your needs. I find this quite a functional solution compared to other products in this category.
- I find the price is still a touch high though.
For me it was kind of an investment to be more effective with discipline control and it definitely saved me money.
I just suspect that some potential users may want to buy it and think of it as THE solution for their discipline issues. And I don't think that just using this tool alone is enough.
- I did experience a bugs, which seems to be based on how the tool interacts with the platform. In some configurations by using ATMs it doesn't handles well the OCO orders. I saw this occurring when executing multiple trades rapidly (double clicking to have double the size on) - so GAT could not act quickly enough to finish it's function when this triggers a rule and this can corrupt your OCO order in NT.
For me this is not an issue, I don't need to execute this way anymore.
- I would also advise anyone who want's to use the tool to first get familiar in detail how it works and testing things out in sim before using it live. If you miss understand how it works and what the individual rules exactly mean it could have an undesired effect.
- There's a manual which explains in detail how the tool works, once you've purchased it.
Getting around GAT while trading
Know that there are different mechanism built in, which can be enabled and are designed to avoid the trader to deactivate GAT:
- Password lock GAT setup, in order to avoid disabling rules (password could be set by a third person, outside of the traders knowledge)
- Password reset function by E-Mail (by choosing a random password, the trader can access the settings only by triggering this E-Mail, IE. to someone else)
- Delayed password reset function by E-Mail (same as above, but the E-Mail is only sent on the next day. So if you can't rely on a partner to help you with this, as described above, you can use your own E-Mail. It will work for you because you will be able to access the settings only the next day).
- Hide "Ninjatrader Assembly..." menu entry, to avoid uninstalling GAT in order to continue trading
Obviously there's always a way to get around these protections anyway. But I think the goal is just to set a barrier which is just about strong enough that you'll not go further in the heat of your emotions until you cool down.
This also goes with the statement above, that in my opinion you have to have a minimum of genuine desire to achieve discipline about your rules. Then this is a good partner for your journey of your early trading career.
Otherwise there's no point working with the tool to begin with.
@tickBull thanks so much for this enlightening post. One of the best and complete I've seen in a very large period here on FIO. You covered every aspect very well. Thanks for taking the time to go over every doubt and issue. Couldn't agree more with all said.
A tool like this would be an extra risk to add to your trading with all the bugs and issues as posted before but it removes so many others. Thanks for laying out the pros and cons.
