my journal

Good job it's Friday. Keep writing. I think that you have done me some good but you, still, have to convince yourself.

You are right. I am a good preacher, but I don't put my preachings into practice. Well, maybe you can tell me if you have similar problems. That way maybe you can do me some good, too. Finally I closed the series of trades (about 10) and ended up losing, once again, about 100 dollars. Lucky again, like the other day, because I usually lose thousands. Anyway, guys. In one week of diary already two relapses. Am I not disgusting? There's something inside me that pushes me to trade, and that overcomes all the barriers I try to place between myself and discretionary trading: hiding the trading platform, getting rid of quotes and charts in it (it has to stay on for automated trading, or I would uninstall it), hiding excel... but it's never enough. In the past the only thing that kept me from investing was having an empty account. BUT. There is one period, in early 2008 and 2007 when I was just back-testing and forward-esting and back then I stayed without making a trade for almost a year. So I definitely can do it, but I need to be frantically developing new systems - something I can't be doing all the time (for lack of ideas and energy).


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Unbelievable! After writing all this **** - it's as if there was another person inside me (one writes and the other one trades) - I went and made another trade and actually made over 100 dollars and broke even for the day (the systems didn't make any money today). So today no losses, after a few two hours of emotional roller coaster and considering I got very lucky. Which means, once again, that for me discretionary trading, from a financial point of view is useless.

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After a few minutes, I thought of yet another thing to add:

After making even just 20 dollars with my discretionary trading, I am left with a feeling that I am good. I am left feeling good about myself. Whereas instead, if I made ten times as much with my automated systems, say 200 or even 400 dollars, I would not feel as good. I would need to make 1000 to feel good, and still I would feel like I got lucky and I didn't deserve the profit made. Instead, with just 200 dollars made every day I think I would feel very good about myself. Only, unfortunately it rarely happens. I wish someone could teach me to trade discretionary and make money consistently. But I wish they taught me almost univocal rules, and not told me to go by instinct like most people do. Many profitable discretionary traders don't exactly know what they are doing, or don't know how to explain it in words, or don't wish to explain it clearly at least. I am different. I enjoy explaining things clearly. If you ask me something, I'll either say I want to keep it secret, or explain it really clearly. Nothing in between.

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13:25 CST

What the hell, another 300 on the CL, just now. I called a friend. He kept telling about how he was losing 2500 in paper trading on the CL, so I figured the CL must be really low for him to be losing 2500 by going LONG. So I went back yet another time to my trading platform and made 300 dollars in a few minutes. So today I am up 300, thanks to my discretionary trading. Which still means nothing because today I am up 300 but - as far as discretionary trading - I am down several thousands in the past 30 days, and several thousands in the previous 30 days. All it means is that I have an addiction - that's for sure.

Another note. If you want to go against the trend this is the best time. At around this time you tend to have reversals, viceversa if you want to go with the trend, you should have traded until a few hours ago. It's interesting: some traders tend to do one thing and they should trade at certain times, others do the other and should focus on different hours, others can do both. I can only go against the trend, but I can't wait till around these hours - so I just lose and lose.

I am with Tenbobtrader ... "You got to learn to cut his water off."

Maybe my experience with stopping smoking may do some good...

I couldn't give up. Each time I decided to quit, I would buy cigarettes again. It started to feel that I wasn't in charge! :^) So after many attempts, I started to watch myself to see what it is that makes my go get another cigarette *even though I do not want to*. So I would smoke, enough to satisfy my craving, and then make a promise to myself that I will not break down and start smoking this time. Then I would watch myself - and observe how I talk myself out of stopping *this time* because there was some important reason and I would definitely do it tomorrow. This was the pattern few more times so I promised myself not to fall for this, to remind myself that it is just a ploy an not real. So again I watched myself talking myself out of quitting. It was quite unreal. But closely observing myself I could feel that **I did not want to quit**. The rational me said "quit", my subconscious said "forget it, why now?". I could see I stood no chance. So I decided to work on my subconscious, I created an image of my lungs being, as a result of smoking, rough like a sandpaper and each time I breathed the walls would rub against each other. After about a week, I felt I didn't want to smoke a gave up with no problem and never smoked not felt a need to since then.

My guess would be that you are addicted to some hormonal rush (endorphins?) triggered by your trading. You might try to observe your thought processes that lead you to 1. resuming your discretionary trading and, when you succumb :^), 2. stopping you bailing out when the trade goes against you. Then work out how to break the habit.

Good luck,

Karel

Thanks, Karel, for your very good description: what was smoking for you (wanting to quit, and not wanting to quit at once) trading is for me. Definitely a perfect example and description of the feelings I experience.

However, I find it hard to work on my subconscious: my subconscious is smarter than me, and doesn't get deceived by stories of lungs being like sand-paper. First of all, I don't know how to get in touch with my subconscious. Where do I find him, to talk to him? And, if I tell him "look at the balance, discretionary trading is bad...", he's going to tell me "get out of here... it is just because you are not using stoplosses, or else you'd be making 100% returns a month: remember last November?"

"Endorphins"... actually, I have a feeling that a lot of this has to do with not having a girlfriend, because otherwise I would make a sexy time with her every time I have those feelings of emptiness.

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Another thing is that, besides for example today being really happy about making those 300 dollars I eventually made, I actually deep down inside me feel that I am totally capable of making money. I can't accept that so many people make money trading so fast after their start, and I still cannot be profitable after 12 years. I cannot accept my limit. I was taught by my father to always push my limits further, and not trading discretionary because I am not profitable seems like quitting to me.

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But thank you. All the things you told me will stay with me, and will be useful at one time or another. Right now, I don't feel like you gave me the "eureka" answer, but maybe you planted an idea in me that will grow... and eventually make me solve the problem, like you solved yours.

travis

That's your rational self talking and you're right. Unfortunately that rebel demon inside you just hates rules of any kind, even loosely framed ones drawn by your rational self. eg: rational self - " I should cut this trade now": rebel demon " no way, man, let's rock and roll".

If you can't cast out your rebel demon then you have to subvert him in your discretionary trading as you have done in your automated trading. Maybe this somewhat simplistic piece would help T2W Day Trading & Forex Community

Cheers

jon

Hi Travis,

As before, you yourself know the answers to your problem better than any of us here (notwithstanding all the good advice given above). The problem is putting the solutions into effect.

For example, you said that for a whole year while you were developing automated systems, you didn't try trading in a discretionary way. You clearly get a buzz from programming (can relate to that), and it might be an even bigger buzz than you get from discretionary trading (and we should return to exactly what _you_ mean by that phrase below). It seems to me that what you shouldn't be doing is trading, but writing systems for other people to trade, either with their own money, or (under very strict conditions, and of course, only the right people) your money. In an ideal world, you would never even trade your own automated system, let along your discretionary one, so you may be able to uninstall the appropriate software from computers in your immediate vicinity, and have some distance from temptation.

I don't know how realistic this is in your particular situation, but maybe it will give you food for thought.

Quite frankly, I'd be damned prouder of having successfully written an automated system that worked, than being able to trade manually day in, day out, hour after hour. Any fool can work.

Discretionary systems: I wonder exactly what you mean by this phrase. You haven't defined it, and I don't think anyone else has asked. From reading far more experienced traders than myself, I gather that they very often have strict rules, but these rules don't define every possible situation; they are just a framework. Sometimes a setup can be perfect on paper, but the experienced trader doesn't feel that it's right somehow, and passes it up. That's one example of a discretionary (non)-trade, but it doesn't mean there were no rules involved.

I think that what I am getting it is that you seem to be posing automated trading and discretionary trading as two extremes of a spectrum, and I believe that may be a false dichotomy.

The hardest thing to program into any system is what we normally call "common sense". That's the discretion that a human trader brings to the act of trading, or should do.

Yes, thank you. I just read about "Jack" and his method, even though it's not a real person (but maybe the author talks about himself). I've done what Jack has done, by devising a method that allows me to make money - automated trading. I guess the only thing missing is making the system perfect so that it'll make money every day, which it doesn't. That way I won't come home, find a loss, and try to recoup it (and then usually lose more money). Right now the system has a drawdown as long as a few days. To be good enough it'd have to close every day as a positive day. Then I don't know if I'll find other reasons (I think there are) to start trading discretionary - first one I can think of is boredom. As I said I get a lot of excitement by trying to make money in the market. I think everyone will agree that it's one of the most exciting things.

You make interesting points simply by quoting what you quoted and by your remarks. I don't know how to reply, because I am still thinking about it. I will quote in red the things that got me thinking (some things you are quoting, by Brett, I've been saying for many posts, those about psychology not being helpful). Sometimes people make me think about something new simply by quoting something I said. Other times I read my old posts without knowing they're mine... and I say "who said this brilliant thing?", then when I find out it's me I say "wow, how could I be so knowledgeable back then?". Even when I was years away from being profitable I was writing brilliant things that still make sense today, because you could be doing 80% right, but that 20% you're doing wrong may keep you from being profitable. With automated trading it's faster to find out what it is (you find out before you even start trading). With discretionary trading it's foggy world, and you may never find out (so far it's my case).