NexusFi: Find Your Edge


Home Menu

 





Not able to pull the trigger


Discussion in Psychology and Money Management

Updated
      Top Posters
    1. looks_one Mephistophilis with 8 posts (0 thanks)
    2. looks_two eudamonia with 2 posts (9 thanks)
    3. looks_3 TIFONTrader with 2 posts (1 thanks)
    4. looks_4 Steven Sontag with 2 posts (0 thanks)
      Best Posters
    1. looks_one Nicolas11 with 33 thanks per post
    2. looks_two Rachel with 15 thanks per post
    3. looks_3 eudamonia with 4.5 thanks per post
    4. looks_4 ddnut with 3 thanks per post
    1. trending_up 8,856 views
    2. thumb_up 66 thanks given
    3. group 13 followers
    1. forum 21 posts
    2. attach_file 0 attachments




 
Search this Thread

Not able to pull the trigger

  #1 (permalink)
Mephistophilis
Rajkot, India
 
Posts: 8 since May 2012
Thanks Given: 17
Thanks Received: 0

Hello all..

I am from India and new to the forum. My problem is very much common and you probably have heard it before.

I have been trading since 5 years and changing systems every now and then. But a few months ago made
up my mind to trade with only one system and look for improvement in myself and the system. So before starting i backtested it and had good results. I started trading it since 1st May and not able to generate result as per expectations. After 30 days i am up by only 4R.

Now reason behind this result is not system, problem is with me. I am not taking trades as system points them out.
I dont pull the trigger fearing a wrong trade or loss. Had i pulled the trigger every time it could have been roughly 35R month which is way above my target.

What should i do to improve my mentality.

Thanks big mike for this platform.

Mephistophilis

Reply With Quote

Can you help answer these questions
from other members on NexusFi?
Futures True Range Report
The Elite Circle
Exit Strategy
NinjaTrader
ZombieSqueeze
Platforms and Indicators
NexusFi Journal Challenge - April 2024
Feedback and Announcements
New Micros: Ultra 10-Year & Ultra T-Bond -- Live Now
Treasury Notes and Bonds
 
Best Threads (Most Thanked)
in the last 7 days on NexusFi
Get funded firms 2023/2024 - Any recommendations or word …
61 thanks
Funded Trader platforms
38 thanks
NexusFi site changelog and issues/problem reporting
26 thanks
GFIs1 1 DAX trade per day journal
19 thanks
The Program
18 thanks
  #3 (permalink)
 
Nicolas11's Avatar
 Nicolas11 
near Paris, France
 
Experience: Beginner
Platform: -
Trading: -
Posts: 1,071 since Aug 2011
Thanks Given: 2,232
Thanks Received: 1,769


Hi!

And welcome on the forum, since it is your first post!

I do not suffer from your problem, but I have the opposite (pull the trigger too often).
I hope that another trader who knows your issue could help you better than I will do.

But what I can say is:

- Take it easy. These psychological issues are part of the game. Of course, they shall be solved, but you are... normal. I think that most of the traders suffer from 1 or 2 serious psychological issues (a list of the most common there: Nine Transitions: I understand the setups, but am unable to trade), and shall struggle to overcome them.

- Since the problem is in the head, it can be solved. Some people have physical disabilities and they have to live with them. The "positive side" with psychological difficulties is that they can be solved if you really want to.

I think an excellent book to identify and progress in solving psychological difficulties is the following one:
Brett N. Steenbarger, The Daily Trading Coach: 101 Lessons for Becoming Your Own Trading Psychologist
Amazon.com: The Daily Trading Coach: 101 Lessons for Becoming Your Own Trading Psychologist (Wiley Trading) (9780470398562): Brett N. Steenbarger: Books

I personally think that you first need to go deeper in your FEAR.

What are you afraid of?
You are afraid of loss. Why if you have a solid backtest? Do you really have a solid backtest?
Are you under-capitalized?
Are you jumping from SIM to big positions, or are you first going from SIM to small positions (which is wiser according to me)?
Have you understood that trading is a statistical game? Each individual trade has no value.
Are you afraid of losing money or are you afraid of telling people that you are not suceeding?
Why are you afraid to be wrong?
Is it OK when some one criticize you?
Have you understood that trading is accepting uncertainty everyday?
Have you understood that you have to lose in order to win? that losses are part of the game? (of course, the goal is to have less losses than gains )
Have you already experienced a similar fear in another context? Within your family?
Have you been over-protected by your parents? (I was, in a way.)
Do you think that the markets are dangerous? Why?
Do you think that, if you have too many losing trades, it will impact your value as a person?
You are not afraid of losing this trade. WHAT ARE YOU REALLY AFRAID OF?

I do not ask you to answer these questions here! I have just made a brainstorming, and it is what came to my mind. Perhaps 95% are not relevant. Perhaps 1 line will ring a bell...

A positive note (from Steenbarger) to finish: your weakness (fear to pull the trigger) is also a strength (it is cautiousness). You just have to move the cursor more in the middle.

I wish you the best,

Nicolas

Visit my NexusFi Trade Journal Reply With Quote
  #4 (permalink)
Mephistophilis
Rajkot, India
 
Posts: 8 since May 2012
Thanks Given: 17
Thanks Received: 0


Nicolas11 View Post

I personally think that you first need to go deeper in your FEAR.

What are you afraid of?
You are afraid of loss. Why if you have a solid backtest? Do you really have a solid backtest?
Are you under-capitalized?
Are you jumping from SIM to big positions, or are you first going from SIM to small positions (which is wiser according to me)?
Have you understood that trading is a statistical game? Each individual trade has no value.
Are you afraid of losing money or are you afraid of telling people that you are not suceeding?
Why are you afraid to be wrong?
Is it OK when some one criticize you?
Have you understood that trading is accepting uncertainty everyday?
Have you understood that you have to lose in order to win? that losses are part of the game? (of course, the goal is to have less losses than gains )
Have you already experienced a similar fear in another context? Within your family?
Have you been over-protected by your parents? (I was, in a way.)
Do you think that the markets are dangerous? Why?
Do you think that, if you have too many losing trades, it will impact your value as a person?
You are not afraid of losing this trade. WHAT ARE YOU REALLY AFRAID OF?

I do not ask you to answer these questions here! I have just made a brainstorming, and it is what came to my mind. Perhaps 95% are not relevant. Perhaps 1 line will ring a bell...

A positive note (from Steenbarger) to finish: your weakness (fear to pull the trigger) is also a strength (it is cautiousness). You just have to move the cursor more in the middle.

I wish you the best,

Nicolas

Hi Nicolas11

Thanks for your reply. It was helpful.

I am good with most of the questions you posted above. However, after going through charts and some introspection, I found out some problems.... They are....

1. Not paying attention to charts (surfing, mails, forums etc. Most trades missed due to this)
2. Hesitation in taking trade in same stock once it hits stop( Many times it gave great runs on second attempt)
3. Sometimes give excuses like 'it is in sideways' even if system indicates trade. ( Due to fear )
4. Fear: (Fear of being wrong, Fear of not achieving targets)
5. Waiting for further confirmations not mentioned in system.
6. Taking trades mostly only in earlier part of day: Sometimes avoid trade after loss to stop further damage, sometimes happy with early morning profits.

My risk management is tight so hitting stops will not give much trouble to my account. My maximum loss for the day is 1.5%.

Hope will be able to workout these issues sooner than later...

Mephistophilis

Reply With Quote
  #5 (permalink)
 
TIFONTrader's Avatar
 TIFONTrader 
Prague Czech Republic
 
Experience: Beginner
Platform: Sierra Chart, daytradr
Broker: EdgeClear
Trading: Eurex Futures
Posts: 517 since Nov 2011
Thanks Given: 1,338
Thanks Received: 451


Mephistophilis View Post
Hi Nicolas11

Thanks for your reply. It was helpful.

I am good with most of the questions you posted above. However, after going through charts and some introspection, I found out some problems.... They are....

1. Not paying attention to charts (surfing, mails, forums etc. Most trades missed due to this)
2. Hesitation in taking trade in same stock once it hits stop( Many times it gave great runs on second attempt)
3. Sometimes give excuses like 'it is in sideways' even if system indicates trade. ( Due to fear )
4. Fear: (Fear of being wrong, Fear of not achieving targets)
5. Waiting for further confirmations not mentioned in system.
6. Taking trades mostly only in earlier part of day: Sometimes avoid trade after loss to stop further damage, sometimes happy with early morning profits.

My risk management is tight so hitting stops will not give much trouble to my account. My maximum loss for the day is 1.5%.

Hope will be able to workout these issues sooner than later...

Mephistophilis


Hello to you, Mephistophilis,

I have the same problem.
I have been into markets for some 4 years, not actively trading but studying. Family and work reasons prevented me (fortunately) from jumping into active trading.

As to 1. Try to "catch" yourself doing it and persuade yourself not to .

2. - 6.:
I understand that your risk is small. Maybe it is too small for your way of trading. There might be a contradition of the risk defined from your backtest and your risk tolerance. So if your stop is hit, your risk tolerance is depleted (as is proved by your fear to trade more), even though you say that your risk is "only" 1.5% of your account. It seems that you have not embraced even that 1.5% of risk.

Also, for example I keep on trying to have the smallest risk and so I try to find the ideal entry to reduce it as much as possible. However the more "advantageous" entry I get, the more probable it is that my stop will get hit since in fact, it is not good if the market is heading back to the previous price. I found out that I have to get the amount of risk and my risk tolerance in sync. If I cannot reduce risk, I have to learn how to cope with it. I run endless hours of market replay just watching the market. I trade during market replay and on sim and replay my trades.

Your risk tolerance will grow if you find out that your system is profitable. And you cannot find that out without trading. It is a closed loop but market replay and sim trading greatly help (however, not for too long).

It may also be that you are "overtraded". If you have been in the markets for 5 years without success, it must show. If it is possible, try to take a break and clear your head (easily said than done if trading is your true passion ). But it might also help.

Wish you lots of success on your journey.

Hana

Follow me on Twitter Visit my NexusFi Trade Journal Reply With Quote
Thanked by:
  #6 (permalink)
 Haim1 
Beer-Sheva, Israel
 
Experience: Advanced
Platform: NinjaTrader
Trading: YM
Posts: 22 since Oct 2011
Thanks Given: 107
Thanks Received: 7

Mephistophilis,

You asked "What should i do to improve my mentality"

I'm sure that there many good answers for that

but I would like to give you my simple approach that worked for me

1. Remove all indicators and have only one sma/ema
(I'm NOT "against" indicators)

2. Learn the price action – When the graph is clean the mind is much more free
to see and then understand the movements, speed, range and etc.

3. Simple money management – let say that you are working with 5 contracts
and the trend is up – what I done in the past and worked for me was –
immediately after I recognize the trend I enter with one contract only –
I feel good because I'm with the trend and only small % from the total contracts –
The only thing that you can do for now is to
watch at the graph movement – there is no pressure.

Learn the graph move while you are in and learn how you are doing
with the decision making with the other 4 contracts –
many possibilities to those. Learn what fits to you regarding the
decision making for the continuation move/contracts.

To improve mentality you must have no pressure situation
while you are in and to understand your process and quality of the decision making.


All the best.

Reply With Quote
Thanked by:
  #7 (permalink)
 
eudamonia's Avatar
 eudamonia 
Sacramento, CA
 
Experience: None
Platform: None
Broker: ADM and Sierra Charts
Trading: ES, CL
Posts: 315 since Jul 2010
Thanks Given: 308
Thanks Received: 449


Mephistophilis View Post
I am good with most of the questions you posted above. However, after going through charts and some introspection, I found out some problems.... They are....

1. Not paying attention to charts (surfing, mails, forums etc. Most trades missed due to this)
2. Hesitation in taking trade in same stock once it hits stop( Many times it gave great runs on second attempt)
3. Sometimes give excuses like 'it is in sideways' even if system indicates trade. ( Due to fear )
4. Fear: (Fear of being wrong, Fear of not achieving targets)
5. Waiting for further confirmations not mentioned in system.
6. Taking trades mostly only in earlier part of day: Sometimes avoid trade after loss to stop further damage, sometimes happy with early morning profits.

1. You need to be engaged with the market. You must "show up" to be successful. Most likely your websurfing and other activities are distractions to keep you away from the pain of losing, the fear of success, and other emotions you are hiding from. Focus on being in the "present". You cannot control the market. But you have full control over whether you engage the market or not.

2. You don't really believe in your system. Maybe you haven't tested it enough yet. Or maybe you have but you still have doubts. Before you start trading any system you must fully accept losing X% of your trading account. Imagine what it would like to have lost that money. Now. It. Is. Gone. Can you accept this? That is your worst case scenario. You are not dead from losing this money. Pick yourself back up and create another system if need be.

The truth is your imagined worst case scenario is probably 100X worse than any reality that could happen.

3-6 See last comment.

Visit my NexusFi Trade Journal Reply With Quote
  #8 (permalink)
 ddnut 
San Marcos, CA
 
Experience: Intermediate
Platform: NinjaTrader
Trading: 6E, ES
Posts: 54 since Nov 2010
Thanks Given: 125
Thanks Received: 33

Here is the follow up to the blog post mentioned by Nicholas11 that addresses this particular issue. Nine Transitions: Freezing, inability to pull the trigger

As mentioned in the blog, one method is to reduce size to a level where the loss "no longer matters." Another idea is to consciously evaluate the risk of the each trade as you are about to enter. Are you willing to accept the risk? If not, why not? At the end of the day, review the reason that you passed on a particular trade to see if your reason was valid or not. Your intuition is trying to tell you something and it will not stop until you understand. The mind works in strange ways. Read some of the 'sticky' threads in this section.

Reply With Quote
  #9 (permalink)
 
Rachel's Avatar
 Rachel 
San Diego
 
Experience: Advanced
Platform: Private
Broker: private
Trading: CL future
Posts: 1,380 since Mar 2012
Thanks Given: 935
Thanks Received: 1,955

I am good with most of the questions you posted above. However, after going through charts and some introspection, I found out some problems.... They are....

1. Not paying attention to charts (surfing, mails, forums etc. Most trades missed due to this)
2. Hesitation in taking trade in same stock once it hits stop( Many times it gave great runs on second attempt)
3. Sometimes give excuses like 'it is in sideways' even if system indicates trade. ( Due to fear )
4. Fear: (Fear of being wrong, Fear of not achieving targets)
5. Waiting for further confirmations not mentioned in system.
6. Taking trades mostly only in earlier part of day: Sometimes avoid trade after loss to stop further damage, sometimes happy with early morning profits.

My risk management is tight so hitting stops will not give much trouble to my account. My maximum loss for the day is 1.5%.

Hope will be able to workout these issues sooner than later...


Mephistophilis

Hi Mephistophilis,

I studied with a very seasoned trader and he said, everytime he enters a trade inside he is scared like a little girl.
It is normal to feel those emotions, it is a problem if it influences your abiltiy to function. Even though that seasoned trader felt fear, he still pulled the trigger on the trade with gusto.

Being aware that the trade could not work out, is part of being able to size up and be aware of what your risks are? That is good and natural.

I have found, doing trading in sim and see how it works and feels, eases that fear of not having a successful trade. I knew one guy did sim for years and then went live. It all depends on your comfort zone etc. You may also want to look into narrowing your risk and consider trading something else, that you feel more comfortable with?

1. Not paying attention to charts, is a problem. One thing you can do, to focus on your chart is talk out loud, what Price Action is doing. I remember there was this trader who just traded the YM and he was sharing his very successful set up and the whole time, he was talking out loud, what Price Action was doing. How the other traders on the other side of the trade could be feeling. YM is bottoming, those people who were short, might be taking profit etc. If YM makes a higher Low, it will form a Head and Shoulders Pattern. YM is rallying to the high of the 30 minute bar, it is getting close to 10Am, we could have a long set up at the high, what will tell me if it doesn't set up for a rally? Read tape, see how many contracts are coming through, any big buyers?
People can concentrate for about 20 minutes and everyone has different degrees of concentration, attention span etc. Look into doing luminosity brain excercises, a lot of the successful traders here on futures.io (formerly BMT), do it and I started to do it and it improved my trading skills. Meditation helps with focus and concentration, along with drawing or playing a musical instrument.
Also, you might want to create a mental routine, every 5 or 10 or 15 minutes, you check what the ADX on the 2m chart is doing, check the ticks, check this or that, to stay on top of the market. What kind of selling or buying is going on in the market etc.

2. Hesitation taking trade if stopped out. Your system or trade set up might not be working for you? Not all set ups work all the time. One thing that can help, is learn or tune more into what kind of day it is. You might want to work on doing your homework prior to the market opening, so you know what kind of day it is: inside day or outside day, is the market in chop, are we trending etc.
I have a trading buddy, who is very successful, made a lot of money in the markets and now, he just has a very simple autostrategy he has working all the time on CL and TF. He makes about $1,200 a month and it does a lot of trades but at the end of the month, he is in profit. (My trading buddy also sells Calls and Puts on USO, has been doing it for years and also is making 16% on some income funds, so he is doing really well. You might want to consider spreading your risk, if you have the income to do so, which could help. You would know, you are generating income in other ways.)
My trading buddy is a seasoned trader, he knows, there are going to be lossing trades but at the end of the month he will be in profit. Make your set up, into an auto system, if you can and see how many times, you get stopped out etc. Back testing and sim, isn't the same as trading live, you have more emotions that come into play but eventually with time, you will get to a place where it doesn't affect you any more. A win and a loss are looked upon as the same thing, trading is just a method to creating income, the fun is in your execution and figuring out a better mouse trap, to capture your profits. Focus not on results but on your execution. That is what successful traders focus on and make sure you understand what your draw down is.

Try trading mechanically, without hesitation but make sure you are comfortable with your money management.
1. some traders only risk 1-2% of their account on any trade.
2. I know some traders, if they have 2 lossing trades in a row, they stop trading for the day. Some know their system so well, if the first trade is a losser, they stop for the day. Somedays the market takes money away and some days it gives it. Just a part of trading, you aren't going to have winning trades all the time, it just doesn't happen. You might get a winning streak but it is all about managaging yourself, your risk and being able to live, to trade another day.
3. Some traders on futures.io (formerly BMT) have a big apetite for risk and trade a lot of contracts, more than is wise in my opinion. Do not try to live up to what some of the traders are doing here at futures.io (formerly BMT), you need to do what is right for you. Don't compare yourself to someone else. One of the most important things you can do as a trader, is be aware and observant of yourself and learn your strengths and weakness and do what is right for you at this time in your trading career. You need to be comfortable with your risk, know your set up inside out etc.
I Studied with one trader, who got his account up to 100k and blew it out. Scratch some funds together grew it up to 100K and blew it out again. He didn't learn his lesson and again scratch funds together and got it up to 100K and blew it out agian. Finally he asked around, to see if any seasoned successful traders would let him observe them while they traded. To make a long story short, he found out, this one successful trader, had about 3 set ups and they just waited for it to set up. Some days they didn't trade at all, had a lot of patience but when they entered the trade, their exit was at the end of the day. Be it one point or more. If they had a loss, it was within their risk tolerence and money management. They knew there set ups, inside and out and understood the risks and what the win to loss ratio was and were comfortable with it.

3. Giving excuse, you might not have confidence with your set up and need to study and observe it in different markets. Do your homework and keep good statistics.

4. Fear of being wrong, fear of not making a profit. The first thing the mind thinks, is a negative thought. It is a natural protective instinct to be weary of something. To get past that, you can do some mental imagery of what a successful trade feels like, see it in your mind, do it as a meditation each day etc.
Also, it is part of trading, that you will have trades that are not profitable, so learn from them, so you don't repeat them.
Some people might have had parents that critized them too much, didn't give them enough self confidence etc. If this is your situation, realize you can be your own parent. Nurture youself, do mental talking to yourself, being the nurturing parent to yourself.
Some people have professions like being a doctor who have been trained to always be right, they need to be right because someone's life is dependant upon their good judgement. If that is your situation, you might find it difficult to trade until you overcome that mind set.
I would do a lot of inner reflection or find a coach who can help you through that.
You may have had so many lossing trades, it has influenced your mind negatively and you need to work on your confidence: to do that, make sure you are taking good stats, doing your homework, journaling, go over your journal once a week or every two weeks and see how your are improving and what you need to work on etc.

5. Waiting for further confirmation not in your system, sounds like you have doubts about your set up. This kind of thinking is typical of someone who is not seasoned as a trader or not familar with their set up enough. Know your set up inside and out, comes with taking good stats etc. Try thinking like a hedge fund or a whale, the best entries are just when others are exiting etc. When the crowd is exiting, the big money is entering etc. Realize, the hesitation or doubt is negatively influencing your success with getting you in late. Someone else, has probably entered prior to you and will be selling it to you, so you are being prey for the more limber and stealth trader. So, it would work to your advantage to work on your entry more, focus on that more, so you won't be a patsy or prey.

5. Some traders just trade the early morning hours. If you are trading stocks, they usually do most of their move, in the 1st hour of trading, unless it is trending? I remember one trader told me, if you can't make money in the morning, you aren't going to make it later in the day. It just depends on what you are trading.
There is usually some nice set ups at different times of the day, if you want to trade more, work on your physical endurance.

You have to train like an athelete to be a day trader, keep your blood sugar level, exercise, take breaks after 20 minutes: walk around etc. Then come back and focus. Make sure you are well rested.

I make a ginger and cinnamon tea that helps with my bloodsugar and focus. Ginger is great for the nervous system and cinnamon regulates the blood sugar, then I take some spirulina also, helps calm and balance the nerves and boodsugar. If I don't take it, I will get tired, loose concentation etc.
You can work your way up to trading more hours but trading more, doesn't necessarily mean you will be more profitable. It can lead to over trading.
I found in the past, I made my money in the morning and then gave it back as I continued to trade. So, become familar with how your trading vehicle acts, it's price action and then work your schedule around it, to look for set ups during those specific times, if you want to trade more.
There are certain times, you may find, that trades happen better than other times.
Make notes on how it acts everyday, so you can become familiar with it's price action.

I studied with Tom Bugsby at one point and his system was totally based on certain times of the day. You look for a setup at 9:15, 10AM, 12:30, 2-2:30 and 5:30AM and that is it. You are just concentrating your focus a few minutes prior to that time and a few minutes after that time. If the trade, doesn't set up, you don't take the trade. So, study your trading vechile and see if you find any specific times of the day, that trades set up.

Hope this helps and wishing you the best,

Rachel

PS You may need to ask yourself, what kind of trader are you. Do you feel comfortable doing breakout trades? Do you like shorting when the markets are rising? Does your set up fit your personality as a trader?

Visit my NexusFi Trade Journal Reply With Quote
  #10 (permalink)
Mephistophilis
Rajkot, India
 
Posts: 8 since May 2012
Thanks Given: 17
Thanks Received: 0



Quoting 
2. - 6.:
I understand that your risk is small. Maybe it is too small for your way of trading. There might be a contradition of the risk defined from your backtest and your risk tolerance. So if your stop is hit, your risk tolerance is depleted (as is proved by your fear to trade more), even though you say that your risk is "only" 1.5% of your account. It seems that you have not embraced even that 1.5% of risk.



Hi Hana

thanks for your post..

The risk I have calculated is based on my account. On any given day I will not lose more than 1.5% and on any trade risk is limited to 0.35%(0.35% = 1R). But mostly my exits in losing trades are below -0.6R. On the other hand some trades give up to 4R return. May be you are correct, may be i have not embraced that 1.5% risk. But I will reduce the risk per trade to 0.15% if i go down -10R.

May be i should start a journal here...

Mephistophilis

Reply With Quote




Last Updated on June 11, 2012


© 2024 NexusFi™, s.a., All Rights Reserved.
Av Ricardo J. Alfaro, Century Tower, Panama City, Panama, Ph: +507 833-9432 (Panama and Intl), +1 888-312-3001 (USA and Canada)
All information is for educational use only and is not investment advice. There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.
About Us - Contact Us - Site Rules, Acceptable Use, and Terms and Conditions - Privacy Policy - Downloads - Top
no new posts