First time trading nerves

[Olddognewtricks]

Hi there,

Whilst I've spent time working out what to trade, and then decided how I was going to step into trading, I'm still a little antsy about actually placing my first trade.

I'm looking at trading forex, worked out my rules, and found what works for me on a paper trading level so I'm turning a profit.

However, I've already not taken two or three of my normal signals, because I get the sweats! I knew that it would be different with real money, but not so much...

Like I said, I've done my studies, and I've got my rules, but does anyone have any tips on how to steady the nerves?

 

[darktone]

Hi there,

Whilst I've spent time working out what to trade, and then decided how I was going to step into trading, I'm still a little antsy about actually placing my first trade.

I'm looking at trading forex, worked out my rules, and found what works for me on a paper trading level so I'm turning a profit.

However, I've already not taken two or three of my normal signals, because I get the sweats! I knew that it would be different with real money, but not so much...

Like I said, I've done my studies, and I've got my rules, but does anyone have any tips on how to steady the nerves?

Yep, its normal for a newbie. I suggest cutting your size to the smallest amount you can trade, 10p per point if spread betting etc.
A successful day, is a day when youve have completed it sticking to the same plan you had at the beginning of the day. Win or lose. Imo.
The stress should lessen up as you get used to things, when youre more comfortable.

Give yourself a pat on the back for admitting it too! Is a good sign!

Cheers
D

 

[I'vereadthemall]

I agree with darktone. The amount you are risking per trade will be the key determinant in how edgy you feel of not feel as the case should be. Seeing as you admit to being edgy my guess is that you are trading too large a position.

 

[BeginnerJoe]

All trading problems can be fix by reducing bet sizes.

 

[I'vereadthemall]

I think you're right there beginnerjoe. I was just reading another thread where the question was about if it is ever ok to average a losing trade....
If you cut your normal risk by a quarter...you then have 3 extra units of risk to average into losing trades. This can be a very successful idea when executed properly because your extra units of risk can be used for loss prevention purposes. I worked for a few months at a prop trading firm where this was one of the risk strategies that was actively promoted.

 

[vettelsfinger]

Hi All,

I have not started even defining a strategy yet but I feel that I will also be beset by the same problems as OldDogNewTricks. To elaborate on his initial question are there any non trading based ideas of how to relieve stress when trading that you use? such as relaxation methods etc?

I can only dream of even having a strategy to follow at the moment! So I think OldDogNewTricks has half of the game won

Thanks
Tom

 

[timsk]

I have not started even defining a strategy yet but I feel that I will also be beset by the same problems as OldDogNewTricks. To elaborate on his initial question are there any non trading based ideas of how to relieve stress when trading that you use? such as relaxation methods etc?

Hi vettelsfinger,
Great name, btw!

I think what both you and the OP are really saying is that you're afraid of losing. If you knew that every trade would be a winning one and that the only unknown factor is the amount you won, I suspect the apprehension you experience would quickly evaporate. Now, back to reality. In the real world of course, not only will you have losing trades but, potentially, you could have more losing ones than winning ones - and still turn a profit. So, the issue is how does one embrace losing trades, or at least not care about them? Well, if your methodology has a positive expectancy, then there really is nothing to fear.

My first job after graduating from Bristol Uni in 1982 (actually Bristol Poly back hen) was to pound the streets flogging life insurance door to door. I did that by night and hit the phones during the day, making 1,000s of cold calls. As anyone who has ever done any selling at the sharp end of the industry will confirm, those that do well master a number of skills. Number one on the list is losing their fear of rejection. And I gotta tell you, it doesn't take many doors to be slammed in your face or for people to hang up after telling you to copulate with the natives in some far off exotic land before you get very dispirited! It's a tough gig. What's this got to do with trading? Well, like traders, all salespeople have their own stats. As an illustration, they know that if they talk to 100 people that, from that, they'll make 10 appointments and, from that, they'll get 2 sales. Let's say that 2 sales equals £1,000 in commission. That, averaged across the 100 initial contacts is £10.00 per door knocked or number dialled. So, as salespeople, we were taught to love rejection, to welcome it even, for two reasons. Firstly, the more no's we got, we knew we would be getting closer to the person who said yes. Secondly, and more importantly, with every 'no'; we knew that nominally we'd earned £10.00.

So, coming back to trading, a losing trade may record a debit to your account of X amount but, when the winning trade(s) come, they'll more than compensate. So, don't worry about the losing trades, worry about trading well and executing your game plan correctly, safe in the knowledge that if you do - the equity curve will rise - slowly but surely. I must stress that all this is entirely dependant upon having a positive expectancy. Anyone who isn't sure what that means can learn about it here: Essentials Of 'Risk & Money Management' (If you don't want to read the entire Sticky, scroll down to the heading: 'Do You Have a Positive Expectancy?')

Lastly, the other obvious point to make is that all this boils down to good ol' psychology and, if you're head isn't in the right place, chances are you're going to struggle. Sorting out your emotions is paramount. There are lots of excellent contributions in the Psychology category of the articles section on T2W to help you with that. Go read!
Tim.

 

[pboyles]

To be honest for the vast majority of people the winners don't compensate for the losers, the vast majority of people do not make any money trading. So don't let me stop you from trying but be aware that what you are attempting to do is beyond the ability of most people, don't keep trading and losing money in the belief that you will easily make it back, you most likely won't. Have a plan as to how long you will attempt this for and get out when you discover you can't make it.

 

[NVP]

Hi there,

Whilst I've spent time working out what to trade, and then decided how I was going to step into trading, I'm still a little antsy about actually placing my first trade.

I'm looking at trading forex, worked out my rules, and found what works for me on a paper trading level so I'm turning a profit.

However, I've already not taken two or three of my normal signals, because I get the sweats! I knew that it would be different with real money, but not so much...

Like I said, I've done my studies, and I've got my rules, but does anyone have any tips on how to steady the nerves?

reduce trading levels to not make you antsy .........theres plenty of low $ per micropip brokers around

N

 

[NVP]

All trading problems can be fix by reducing bet sizes.

agreed..... ZERO (0) pence per pip for 95% of traders would have saved them a lot of money

N

 

[Hate2Lose]

Hi there,

Whilst I've spent time working out what to trade, and then decided how I was going to step into trading, I'm still a little antsy about actually placing my first trade.

I'm looking at trading forex, worked out my rules, and found what works for me on a paper trading level so I'm turning a profit.

However, I've already not taken two or three of my normal signals, because I get the sweats! I knew that it would be different with real money, but not so much...

Like I said, I've done my studies, and I've got my rules, but does anyone have any tips on how to steady the nerves?

Start off small. Condition yourself with trading with real money. It is hugely different to trading with paper money.

Take your time, start small and slowly get bigger.

 

[Triggerfish]

trading problems?

All trading problems can be fix by reducing bet sizes.

agreed..... ZERO (0) pence per pip for 95% of traders would have saved them a lot of money

Lets say we're going to reduce the bet sizes to zero.....So what happens when someone trades with a demo?.....does that mean everyone will win?.....clearly they don't.....isn't it?

So do we understand where the "problem" is?.....or do we even know?

 

[bwge]

I have a great trading plan, in fact achieving 80% success rate in terms of my entries, but overall I do not make as much money as I should,
Reason - I panic and exit when a small loss, or I panic and snatch a profit, or if I intend to stay in for a long ride, as soon as it starts retracing, i panic and close.

Last 3 months I started the following:
> Art of living Meditation
3> Pranayama

and I must say slowly I am building up the confidence to stay in, Try it out

 

[vettelsfinger]

Hi vettelsfinger,
Great name, btw!

I think what both you and the OP are really saying is that you're afraid of losing. If you knew that every trade would be a winning one and that the only unknown factor is the amount you won, I suspect the apprehension you experience would quickly evaporate. Now, back to reality. In the real world of course, not only will you have losing trades but, potentially, you could have more losing ones than winning ones - and still turn a profit. So, the issue is how does one embrace losing trades, or at least not care about them? Well, if your methodology has a positive expectancy, then there really is nothing to fear.

My first job after graduating from Bristol Uni in 1982 (actually Bristol Poly back hen) was to pound the streets flogging life insurance door to door. I did that by night and hit the phones during the day, making 1,000s of cold calls. As anyone who has ever done any selling at the sharp end of the industry will confirm, those that do well master a number of skills. Number one on the list is losing their fear of rejection. And I gotta tell you, it doesn't take many doors to be slammed in your face or for people to hang up after telling you to copulate with the natives in some far off exotic land before you get very dispirited! It's a tough gig. What's this got to do with trading? Well, like traders, all salespeople have their own stats. As an illustration, they know that if they talk to 100 people that, from that, they'll make 10 appointments and, from that, they'll get 2 sales. Let's say that 2 sales equals £1,000 in commission. That, averaged across the 100 initial contacts is £10.00 per door knocked or number dialled. So, as salespeople, we were taught to love rejection, to welcome it even, for two reasons. Firstly, the more no's we got, we knew we would be getting closer to the person who said yes. Secondly, and more importantly, with every 'no'; we knew that nominally we'd earned £10.00.

So, coming back to trading, a losing trade may record a debit to your account of X amount but, when the winning trade(s) come, they'll more than compensate. So, don't worry about the losing trades, worry about trading well and executing your game plan correctly, safe in the knowledge that if you do - the equity curve will rise - slowly but surely. I must stress that all this is entirely dependant upon having a positive expectancy. Anyone who isn't sure what that means can learn about it here: Essentials Of 'Risk & Money Management' (If you don't want to read the entire Sticky, scroll down to the heading: 'Do You Have a Positive Expectancy?')

Lastly, the other obvious point to make is that all this boils down to good ol' psychology and, if you're head isn't in the right place, chances are you're going to struggle. Sorting out your emotions is paramount. There are lots of excellent contributions in the Psychology category of the articles section on T2W to help you with that. Go read!
Tim.

Hi Timsk,

Thank you for your advice, I have heard elsewhere that trading is all about psychology and I think your post emphasises and rationalises this very well. I have started looking at the psychology section of the site and find this helpful too. I was wondering what your personal techniques (in addition to being at peace with rejection) to manage stress whilst trading are?

It is great to see so much information on the operational side (money management etc...) I think once I get some ideas together on how I am going to approach the market it will definitely be useful.

Thanks
Tom

 

[timsk]

. . . I was wondering what your personal techniques (in addition to being at peace with rejection) to manage stress whilst trading are?

Hi Tom,
For me, trading stress means boredom. I'm not a very patient trader and sitting watching a trade doing nothing is a tough gig for me. I'd almost rather it went against me and I'm stopped out - so long as it does it quickly - than be stuck in a trade going nowhere. (Note emphasis!) By the same token, I'm hopeless at putting on a trade and then walking away from it and letting it play out - I want to monitor it all the time. It's for this reason I've never liked swing trading. That's what I find stressful - rather than the stress some traders feel in terms of whether or not the trade is a winner.

The way I try and manage it is to only trade the first 2 hours of the U.S. session - which tend to be the most volatile. (I only trade U.S. equity indices.) Even so, there are days when the Dow just meanders around within a 40 point range and I loathe days like those! So, I'll do other things - e.g. spend time on here - but the danger there is that one isn't then focused on the market and paying attention when volatility suddenly reappears. If I'm honest, it remains an on going issue for me and one which I'm constantly trying to find ways to address.

Tim.

 

[vettelsfinger]

Hi Tom,
For me, trading stress means boredom. I'm not a very patient trader and sitting watching a trade doing nothing is a tough gig for me. I'd almost rather it went against me and I'm stopped out - so long as it does it quickly - than be stuck in a trade going nowhere. (Note emphasis!) By the same token, I'm hopeless at putting on a trade and then walking away from it and letting it play out - I want to monitor it all the time. It's for this reason I've never liked swing trading. That's what I find stressful - rather than the stress some traders feel in terms of whether or not the trade is a winner.

The way I try and manage it is to only trade the first 2 hours of the U.S. session - which tend to be the most volatile. (I only trade U.S. equity indices.) Even so, there are days when the Dow just meanders around within a 40 point range and I loathe days like those! So, I'll do other things - e.g. spend time on here - but the danger there is that one isn't then focused on the market and paying attention when volatility suddenly reappears. If I'm honest, it remains an on going issue for me and one which I'm constantly trying to find ways to address.

Tim.

Hi Timsk,

Hope that you are well, I am in a similar position as due to work constraints I may have to place trades and then leave them to play out! I think there will be little boredom using this approach!

I have managed to place a few smaller trades recently to get in the swing of things, and I am quite pleased to be around break even at the moment. When the market is flat or very volatile would that be your advice... to get away from the screen and leave it potentially for another day? It is not as though I am a day trader reliant on daily profit so this would work for me. Is your strategy time intensive or is it more focused on big positions?

Hopefully from my side once I start placing bigger positions the prior experience and guidance will help.

Thanks
Tom

 

[timsk]

Hi Tom,

. . . When the market is flat or very volatile would that be your advice... to get away from the screen and leave it potentially for another day? It is not as though I am a day trader reliant on daily profit so this would work for me.

I'm not in a position to advise you I'm afraid as this rather depends on your trading style and the market conditions that suit you best. Some people prefer jack in the box type instruments - others prefer plodders. As a generalisation, I think it's fair to say that most traders prefer volatility as it's tough to make money out of an instrument that doesn't move very much.

Is your strategy time intensive or is it more focused on big positions?

I'm not entirely sure what you're asking here? I aim to catch intra day swings and am flat at the end of the day. Although I have open candlestick charts (3m, 15m and 60m respectively), I pay much more attention to my Renko charts which are not time based. I adjust the brick size according to the volatility on the day. If you're unfamiliar with Renko - check out this link. I hope that answers your question!
Tim.