In Tom Hougaard's book, he talks about the time he sat next to Luke Donald at a tennis tournament. Tom asked him if Tiger is a better golfer. Donald said "I don't think Tiger is a better golfer than me, if you measure it in how well we putt, or how far we hit the ball, but Tiger Woods does have an amazing ability to forget his mistakes and move on." I think your friend lacks this ability. If he's taking the Tom Baldwin approach and he's simply waiting for the "perfect trades", there will be days when he shouldn't be trading at all, and other days when he should be doing 2 or 3 trades. Why would he do one trade every day? The markets don't work that way. My own mental approach is pretty simple. Even though my win rate is less than 50%, I know to wait until I am certain that, even if I lose on the next 5 trades, I will succeed over the long run on particular setups. Some of that confidence came from back testing, and the rest came from experience. I still make some pretty stupid mistakes, but I guess being human figures into my positive expectancy.
Not sure I understand what you are talking about. most days I ONLY make 1 trade. It's not about making as many trades as possible, but waiting for your setup. It's apparent you're not aware that many traders have setups on 2, 3, and 4 hour charts, or high value tick, or volume charts that only give one or at most 2 setups a day.
Winning ego. He is attached to result of a trade. It takes time to acquire ability to shift mentality of normal life (being right is rewarded) and trading (game of probability ~ law of large numbers ~ loss is nothing if the taken trade is following the trading system rule).
At the end of the day, there are no easy tricks or mental gymnastics which will help. You either sack up, stop being a pussy, and do the job correctly or you don't. If he's unable to do this, the fallback solution (and maybe the better solution) is to stop trying to day-trade and trade longer term, and/or go automated. These have their own challenges and learning curve, but are vastly easier in the sense that you have minutes, hours, or days to make decisions, rather than seconds. And being fully automated of course removes decision-making entirely or almost entirely, outside the dev process.
Take profit is described in ticks, as well as stoploss. He doesen't trade by market behavior except for entry criteria. X amount of ticks in either direction and he's out. Seems to work in general. Entry criteria on the second trade is where the magic stopps.
I get that but why the time constraint? If I'm selling a car I don't close the deal... especially for a loss just because it's 4:30.
Good answer. I wanted to help him as he does not yet make enough to live off of it. Would love to see him go full time.
Meaning what? That he does not follow his own entry criteria? It seems unusual that a scalper would only take a single trade a day. Are you sure we're talking about scalping or thereabouts?
Hello David's faith, Why go full time trading and not go try to get rich as fast as possible? You should want your friend a million dollar trader, not a full time trader.
Emotional reset is very very important after each trade. To trade successfully until you retire, you need to take the emotional aspect out of trading and being able to reset emotionally after each trade is essential. To do that is very simple yet also very difficult, you need to treat every single trade as just a transaction, regardless of whether it was a winning trade or a losing trade, it's just a transaction, nothing more, nothing less. Imagine what if it was the computer who did that trade, you think the computer is going to care whether it made a profit or a loss on the trade that it just entered and closed? No so why should it be different if it was you who did the trade? If it helps you, try to automate your trading by programming your computer to enter trades for you. That way, you won't need to do the emotional reset after each trade; the machine will do it for you. You just need to learn to walk away and let the machine do its job.