learning how much risk/return is right for ME learning what the right mind set is for ME learning what the right strategies are for ME learning what the right tools are for ME and ummmm...learning! learn (lûrn) v. learned, also learnt (lûrnt) learn·ing, learns v. tr. To gain knowledge, comprehension, or mastery of through experience or study. To fix in the mind or memory; memorize: learned the speech in a few hours. To acquire experience of or an ability or a skill in: learn tolerance; learned how to whistle. To become aware: learned that it was best not to argue. To become informed of; find out. See Synonyms at discover. Nonstandard To cause to acquire knowledge; teach.
1)Switched from trading Stocks to trading Futures. 2) Realizing that trading Futures is gambling. Just using probabilities and entries where the trade makes sense. Define strategy and measure the set-up and exit according to plan. 3)Understand that I will lose more often and lose less $ compared to my winning trades and $. It is possible to be profitable with a 30% win rate. 4) The discovery of MAE and MFE. 5) This one most of all.......Stop Caring. Michael B.
The number one thing that's helped me is to make it a core belief that I absolutely, positively never know what's going to happen with a trade, since each result is a random event. This way I have no attatchment to a position and the result of each trade has no bearing on my ego or emotions. I accept that trading is just a numbers game. Each trade is random, but over time you'll make money if you manage risk properly (assuming you have some kind of edge).
I was as scared as Bambi during hunting season, trading 1 lots in the ES. This fear really started to piss me off because I could feel how it was FILTERING my judgement. Every damn little tick against me had me trying to re-evaluate the whole reasoning for my trade entry...this went on for MONTHS. Then one morning just after the market open, thinking of all the fear I had from previous trade days, I said F@%& THIS! I then entered a 10 lot ES position (I had never done more then 1 lot before), set my target at 1.5 pts and a stop at 1.5 pts. I said to myself, "are you scared now...you better be!", and I forced myself to sit on my hands and let the trade play out one way or the other...I literally stood back from my PC so I could not mess with the keyboard and I forced myself to overcome the fear. I did this all day and I made +2.75 pts for 10 ES for the day after commissions. I was so amazed at the end of the day, but I was totally mentally wiped out. The PROCESS to manage my fears started that day, and I will always see that day as a major turning point in my trading. FEAR kills in trading, and you will NEVER become profitable without some way of removing your fears from your reasoned thoughts during trading activities. The best way I can describe what happens when FEAR rules your trading, is to think of your "reasoned thoughts" on one side of a long row of constantino wire. A pile of money is sitting on the other side of that constantino wire...FEAR is the constantino wire, and to get to the money your "reasoned thoughts" get ripped to shreds in their attempt. You must remove the FEAR (constantino wire) from your pathway to the MONEY, so that your "reasoned thoughts" have a chance. Good Fortunes! Chris BTW, there are two ways to remove your FEAR in trading. You can do the daily snip-snip and remove small sections of that constantino wire until one day you have a clear path. The other way (the method I prefer), is to slide a "Bangalore" under the constantino wire (FEAR) and blow the $hit out of it.....your choice!
I don't recall ever trading to be right, so, unless I'm having a long-term memory loss, I never had to deal with those sorts of errors. As you say, I look for the probable outcome, remembering all the while that there is no way to know absolutely that such and such will be the outcome of a particular trade (which is not the same as believing that the outcome of any given trade will be random). Because of the work I've done, the hit rate is very high. However, there are a great many variables affecting the course of the trade after entry, which is why I have very specific rules about loss-limits, when to move to BE, when to take partial profits, when to tighten stops, when to make pre-emptive exits, etc. I never enter the day with a bias, other than weighing the probabilities of a trend day vs a tight, range-bound day. I just look at S/R and go from there. I have no objective that is met by trying to make calls. Rather I try only to be open to whatever the market wants to give me. If it doesn't want to give me anything that day, I wait for the next.
Awesome. Eggheads tell us each trade is statistically independent. They also tell us trading systems "stop working" or go through periods of good/bad performance. They can't have it both ways. It makes sense to size up when the market is working in your favor, and vice versa.
Learning not to trade, waiting for 'my' set up is what I can think of as a major step. However, you have to know what your set up is and that it works in order to have the confidence, patience, etc. to do this. Good thread.
I have had many defining moments in trading. Learning that losing is part of winning. And does not matter. That most "bad" trades can be salvaged to winners. I often am in the right area, but a little ahead....so I average in on dips. Trading is a lot more waiting for the right setup than being in an actual trade. That I should have engraved on my forehead. I always had this picture of daytraders always being in and out of trades like madmen......I do the best when I trade 2-4 times a session. A little Size is magic. Makes it much easier to get in and out of trades. When you only trade one contract, you are stuck with the original entry....when you have more to add....that is when it gets easier to be right.