How did u overcome overtrading?

[rags2riches]

A question to all the successful daytraders out there, be they scalpers or hourly traders - how did u manage to overcome overtrading and the bad days where u have a complete meltdown (like the one I had on Friday Thankfully they are diminishing in frequency)?

I am finding Trading In The Zone by Mark Douglas helpful.

 

[rathcoole_exile]

A question to all the successful daytraders out there, be they scalpers or hourly traders - how did u manage to overcome overtrading and the bad days where u have a complete meltdown (like the one I had on Friday Thankfully they are diminishing in frequency)?

I am finding Trading In The Zone by Mark Douglas helpful.

Personally I use Stop buy and sells on about 90% of my initial set-ups
Often I won't get triggered, which is cool, just means I was wrong about the direction but it didn't cost me anything, least of all comms, spreads etc.
Then back to the drawing board to look for another set-up.
I find this approach takes much of the emotion out of the equation, i can set a potential trade up, and come back later to see how I fared.
Typically then if my Stops do get triggered and I'm in a runner, I might use Limits to add to my position on minor Retracements

Most people who don't buy into the Stop buy/sell strategy for entries often focus on the "lost" profits between the price "now" and the Stop trigger price, but I like having Momentum on my side; it seems to work for me....

 

[rathcoole_exile]

i could go to Victoria and hop on a bus that I think will take me all the way to Glasgow, but it might end up being a local service that meanders about and doesn't really make headway in my direction. Worse still, it might pootle over over the water and head in completely the wrong direction !
I prefer to stand at Brent Cross, take my chances, try to hitch a ride in a Jag.
Okay, he might get off at Edgware or Watford or even worse, get to the M25 and head South; but I feel I've got a better chance of catching a faster, smoother ride North-bound by waiting on the motorway hard-shoulder than by jumping on a bus

 

[tomorton]

Three things have really helped...... after learning the theory of TA. Firstly, I stopped daytrading. This was simply creating the pressure of trying to reconcile my trading results every day, so that every day had to be a winner. Plus I wasn't ever any good at TA and trigger-pulling in real time.

Secondly, I have a documented set of signals / patterns that I personally can trade on with good probability, and try to ignore other set-ups.

Thirdly, I now log the reasoning behind each trade, often I put bits of these on this site, and get others to challenge them. This encourages me to treat a trade like a mini-project, in which I have to justify resources and timescales to a theoretical backer.

 

[RedGreenBen]

The 'successful' filter in your original question should bar me from answering but I'm hoping that 'improving' will let me sneak through......

I found it really useful to record my confidence when I opened each trade (just a 1-5) and then at the end of the week/month plotting the average outcome against each confidence level. Nothing like seeing just how much the 'punts' are costing you in cold, hard cash to help you develop a more circumspect approach to pressing 'GO'.

RGB.

 

[black bear]

Record all trades and limit them per day

Record all trades and YOU and check entry exit rules were followed

limit number of trades per day, note in front of screen YOU DONT HAVE TO FIND ONE EVERY DAY, ITS NOT THE LAW.

Write down market conditions you don"t trade well in, for me its trending, just can not or will not turn round 1/2 way up =

OFF BUTTON

You could paper trade it when that market condition prevails etc, do something constructive, don"t do your Brains in its your choice

1 per day is fine, may even be best in the early days imho you will certainly learn to observe and fire your arrow with care once you have wasted a few

If you like or want to carry on = paper them, but I think your better just watching and learning for the duration of your working day/session, if you can not do that ........:?:

Get over it you missed a move so what..............next

Trade exactly what YOU see, if you think the moves over = it is, if it carries on after your exit..

LOOK & WATCH don"t beat yourself up about it .Learn if there is infact anything to learn

ARE YOU THE KIND OF TRADER WHO LIKES TO BE IN, if you are you will find something............

Anything will do won"t it and thats

Raths gives good advice imho = plan = see your entry before the market gets there, see your Stop.

and that is your best in imho

If market miss your level, it was not the best because your Stop would have had to go right up where you would have liked to get in for a short and vice versa



I find if I dont see it coming its not worth taking, infact I would go further than that, its dam right careless and poor discipline. You are reacting and it can get very emotional very quick under those circumstances because you did not infact have a trade to take did you :?:

All this working out where your going to get in if the market sets up will stop you getting in to quick imho, idle hands and all that

I used to forget this when on a good run and always ends the same ~ churn churn mistake churn churn churn mistake :clap::-0

Latter :clover:

 

[rathcoole_exile]

try this if Day-Trading - imagine you are only PERMITTED 2 trades per day. Once you've used them up, you can't trade again that day, no matter how promising a third or fourth set-up looks.
Knowing you only have the right to make 2 trades, won't that help you focus on the correct, the right trades throughout the day ?

 

[rags2riches]

Great advice ppl

Thanks for all of your comments and advice, I'm sure every struggling newb will find them beneficial.

I do keep a record of all my trades with comments and reasons next to them, reviewing regularly to identify problem areas. Concentrating on the number of trades, quality not quantity is key.

I have now reduced position size and am trying to focus on the longer timeframes. This reduces the noise and forces me to wait longer for each candle to develop. I try not to monitor my trades to closely in real time - the less time I spend watching price bounce up and down, tick by tick, the less chance I have of behaving irrationally and donating money to the sharks.

I think I haven't yet learned to accept losses as an inevitable part of trading because I wanted to always be right. I have written down the 5 fundamental truths and re-read them regularly. I read them before in Shadowninja's post but didn't REALLY understand them. Now I am beginning to.

1. Anything can happen
2. Predictions are unnecessary to make money
3. There is a random distribution between wins and losses of any given set of variables that define an edge
4. An edge is simply an indication of a higher probabilty of 1 thing happening over another
5. Every moment in the market is unique.

Let's see how I get on.
[Having missed the 123 in EUR/USD and Cable this morning looks like I will be watching and waiting and being patient]

Good trading.

 

[new_trader]

You could paper trade it when that market condition prevails etc, do something constructive, don"t do your Brains in its your choice

Very good advice. If you have had a loss or two live trading then you should paper trade the next few trades to confirm your methodology is sound. Don't lament the loss and try to win it back. Paper trading will focus your mind and might even expose a flaw in your methodology. But paper trade it with intent to learn and understand. Being right can be extremely gratifying even if there is no money involved. This cannot be emphasised enough. It is good practice and has priceless educational value.

 

[black bear]

ye.......... do as I say not as I do

Very good advice. If you have had a loss or two live trading then you should paper trade the next few trades to confirm your methodology is sound. Don't lament the loss and try to win it back. Paper trading will focus your mind and might even expose a flaw in your methodology. But paper trade it with intent to learn and understand. Being right can be extremely gratifying even if there is no money involved. This cannot be emphasised enough. It is good practice and has priceless educational value.

Hi new_trader

You are absolutely correct imho,

I like many others and the many who will just pass these words of sound advice in a rush to make their 1st million squid are making a very large mistake

I demo traded after confidence fell apart and just took it upon myself (accident really) to trade one simple method over and over again, market conditions were very favourable at the time and

It works if your a learner and not a gambler

I experienced a minor setback a few weeks back, it would or could have been major 6 months ago

I traded the next trade live and at reasonable size at my signal, no problem at all and none since.

Why :?: because the error was mine and mine alone and not my methods which I know is sound. The two were not connected in any way and measures have been put in place to ensure the error can never be repeated. I now this because I demo traded my method in real time under the pressure of a decision I had come to.

Result = It was no effort whats so ever, never blinked, I am more comfortable than before and I learned valuble information regards myself /emotions etc for the future, I have moved forward again

All because I automated to a larger degree my trading some time back by demo trading method at every signal and took it serious making notes etc as if the trades were real

They were real to me because I had taken full control of me and decided ...........

Nail it or F..ck Trading Off, I was an absolute mess while demo trading because I new the result mattered that much to me.

Far Far worse than anything experienced before or since in anything I have attempted to do

well except

Walking to the table in a team match ~ The Final (4th man out of 5) team down 30 pts and a room full of eyes watching your every twitch, playing a player who was competent but someone I should dispatch pretty easy IF I can produce my game in the moment.

Goes without saying we had come this far many times before as a team but had been found wanting at the last.

Glad I spent those hours on the practice table then I can tell you

5 man team for the next 3 months = Stays with you a lifetime = :clap::clap::clap::clap::clap:

So ..................Train Hard Fight Easy

Latter :clover:

 

[nkruger]

A question to all the successful daytraders out there, be they scalpers or hourly traders - how did u manage to overcome overtrading and the bad days where u have a complete meltdown (like the one I had on Friday Thankfully they are diminishing in frequency)?

I am finding Trading In The Zone by Mark Douglas helpful.

Have a clearly written out plan of when to get into a trade and one for getting out. Don't press the *button* unless you see it on the screen. If you get bored while waiting for your set-up to appear, do something else while sitting there, just stay away from the *button*

Sounds simple, and has been written on here ad nauseam.

Once you can stick to that, you're on your way.

 

[rags2riches]

Thanks again for all the comments. The meltdown was not out of boredom but a revenge trading scenario after being slapped by Cable repeatedly and then trying to be clever.

The golden rule is to quit after 3 trades.

It is ok to make mistakes as a necessary part of the learning process. It is not ok to constantly repeat them.

[is that a genuine EUR/USD breakout?]

 

[nkruger]

The golden rule is to quit after 3 trades.

Agree. Good point.

I think after 3 losers in a row (if you are trading just one instrument) you mind will start playing games, no matter how long you've been at it. Taking the rest of the day off after that gives you time for reflection. It happened to me a couple of months ago, and I came back the next day with renewed vigour. The market was the same, nothing had changed, I was feeling different though, and that's what counts.

Always always go back over your losing trades to ensure you did everything perfectly according to your plan. Don't be tempted to tweek your plan to make those losers into winners though. Stick with your 'edge'

 

[RedGreenBen]

I have written down the 5 fundamental truths and re-read them regularly. I read them before in Shadowninja's post but didn't REALLY understand them. Now I am beginning to.

1. Anything can happen
2. Predictions are unnecessary to make money
3. There is a random distribution between wins and losses of any given set of variables that define an edge
4. An edge is simply an indication of a higher probabilty of 1 thing happening over another
5. Every moment in the market is unique.

V.useful list.

If you are interested in fundamental truths then it is probably worth adding a '2(a)' from a Nobel-winning physicist...

Niels Bohr - "Prediction is very difficult, especially if it is about the future"

 

[black bear]

prediction and rsi divergence the same imho

V.useful list.

If you are interested in fundamental truths then it is probably worth adding a '2(a)' from a Nobel-winning physicist...

Niels Bohr - "Prediction is very difficult, especially if it is about the future"

Never had that problem myself Much !

Now where"s those indians to :whistling

bit like rsi divergence its ok to trade it just

BAIL OUT WHEN ITS WRONG........and quick ASAP FAST

Hanging around News was errrrrrrrrrrrrr no impression yet, will have to pm mp se what he thinks :cheesy: sure I must have R in the wrong place or something###

now let me see

got it, I was just out by 20 points ishhhhhhh = no problem :whistling

Latter :clover:

 

[black bear]

Sorry

I agree, good post

 

[new_trader]

do something else while sitting there

Tribal Wars - The browser game set in the middle ages

WARNING: You may take it more seriously than trading!!

 

[nkruger]

Do something else while you're sitting there:

http://www.therightfoot.net/mystuff/whatever/swf/bubblewrap.swf

 

[rags2riches]

Do something else while you're sitting there:

http://www.therightfoot.net/mystuff/whatever/swf/bubblewrap.swf

Bubblewrap was fine and all but there are ideas over at Forexfactory that I want to investigate.

[is that a 123 on usd/jpy?]

 

[rathcoole_exile]

Bubblewrap was fine and all but there are ideas over at Forexfactory that I want to investigate.

[is that a 123 on usd/jpy?]

biggest mistake of my trading career was getting sucked into all the BS on FF.
Leave well alone mate, you'll find all you need here