Discipline.................

robster970

robster970

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So, while my automated system happily backtests itself into oblivion (incidentally it's not doing too badly - 14.88% up on full 3 months of ftse, let's see how the rest of the year goes), I thought I'd use the time wisely to do some trading myself using a demo account.

At night, I look through charts for my suspect stocks and decide whether I should enter trades using just price, support and resistance, no other indicators. I set targets, calculate the r:r ratio I want for the trade. I do the money mgmt stuff and then work out the size of trade I should place.

In the morning I watch the market for about 30 mins to get some context on whether what I decided the previous night still makes sense. It also presents other opportunities that weren't visible the night before.

Here starts my problem.

I then place some of the trades I calculated the night before because they make sense and then also place other trades for the opportunities if they look viable and price action is supporting it.

For the last week, the opportunity trades and the well qualified trades have worked quite well until today where I saw an opportunity, then it went south, so I closed out and went short, then it went north, then I'd lost twice as much and then revenge traded another stock thinking it would be an easy win, only to lose more. If this was for real today, I'd be £1500 down as opposed to £1100 up which is where I would have been had I not messed around.

So, the question is, do you always, always plan your trade and trade your plan, or is it also ok to take the odd opportunity provided it is well considered and you don't shuffle back and forth and revenge trade if it goes pants?
 
robster970 said:
So, the question is, do you always, always plan your trade and trade your plan, or is it also ok to take the odd opportunity provided it is well considered and you don't shuffle back and forth and revenge trade if it goes pants?
Click to expand...

Whenever I don't do the blue stuff above, the probability is that the trade goes wrong. If luck's with you then you can be ok (even very ok!) but trading shouldn't be about luck - it's about probabilities in your favour and I get those with the blue text. :)
 
Wasn't about half an hour into the market the time there were a couple of major news releases affecting the FTSE? I also suspect that planning trades the night before for the FTSE and placing them half an hour after the open is not so clever as it often reverses direction about an hour into trading.
 
@everyone - I get the idea that keeping the long and short open simultaneously might have helped me. What I should do after that is making my head hurt. I can only see that you will always be X out of pocket regardless of the prevailing direction.

@0007 - I got impatient today as well. My Mrs noticed I was quite tetchy.
 
£10kLoser said:
Wasn't about half an hour into the market the time there were a couple of major news releases affecting the FTSE? I also suspect that planning trades the night before for the FTSE and placing them half an hour after the open is not so clever as it often reverses direction about an hour into trading.
Click to expand...

Yep - caught the rough end of that today. What I have seen on ftse though is that the first 30 mins is massively unpredictible hence me steering clear. You suggesting it would be better to plan whilst watching what's going on in the mad first hour?
 
0007 said:
Whenever I don't do the blue stuff above, the probability is that the trade goes wrong. If luck's with you then you can be ok (even very ok!) but trading shouldn't be about luck - it's about probabilities in your favour and I get those with the blue text. :)
Click to expand...

good post.
keep a matrix or checklist of things that need to happen before you take a trade.
record any trade that isnt part of the plan.

look back on your trading results, and see how much money you lost on each occurence of non-planned trade.
keep this record in front of you each day.

remind yourself what happens when you take ad-hoc trades.
 
trendie said:
proof ready and waiting.

can you post a screenshot of your bank-account with a million dollars in it?
thanks
Click to expand...

at attachment..
 

Attachments

  • bank_statement.jpg
    bank_statement.jpg
    122.3 KB · Views: 198
Trading my plan. Back to normal. No suprises. Up nicely today with ftse breaking 4000. Seeing the normal lunchtime lull.
 
GammaJammer said:
Hey - Everyone'sbitch, sorry, everyonerich.

Wtf was that bank account dude? Where you from - Indonesia? somewhere in Asia I'm guessing? You might have a million units of currency to your name, but it sure as sh*t ain't dollars ;)
Click to expand...

Malaysian I think.
 
A trader can lack discipline in many different ways, but for me, it comes back to the following

1) Not really knowing what you are doing.
2) Being a coward.

If you do know what you are doing, and how things are likely to pan out, you will know that discipline to your plan is the way to make the biggest profits, reinforced through hundreds and hundreds of hours of screentime. So that you are at the point of following your plan religiously and instinctively, like a reflex action.
Very similar to how my wado ryu karate sensei explains to new pupils that the objective is to internalise the moves so that they become a reflex instinctive action when they are needed. And that this cannot be achieved in 3 weeks or 3 months, but takes month upon months of practise, both physically and mentally.
 
So said:
In short, (for me at least -YES), like you I have a back tested system, based on that, I have a trading plan, which specifies the criteria for entry, the stop loss and the limit order. Without a plan I couldn't trade, for each trade before I enter I know what my maximum loss could be and conversely what my profit will be. My aim is to get a set amount of pips from each trade and leverage appropriately and sensibly to achieve the outcome. I have a hit rate that provides a living, so when I experience a loss as we all do, I'm happy knowing that I will have more winners than losers. I record the detail of every trade thus having an upto date and accurate record of how my system works and whether it needs tweaking a little to match the current market conditions. I resist all tempatation to take trades that do not match my plan even though visually it looks as though its viable. Discipline is paramount as is carrying through an well tested plan, just my thoughts fwiw.
Click to expand...
 
robster970 said:
@everyone - I get the idea that keeping the long and short open simultaneously might have helped me. What I should do after that is making my head hurt. I can only see that you will always be X out of pocket regardless of the prevailing direction.
Click to expand...

no no no no no

Go and read the thread he's attached and if you then think that keeping a long and short position in the same instrument at the same time is a good idea then you MUST

step away from the keyboard until your sanity has returned.
 
I read the rest of the thread last night after I'd posted that response. My conclusion is that you can only ever lose doing that. Thanks for the warning though.
 
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