Help-mental block

[2468steve]

Can anyone help.Just recently I've had considerable difficulty going long whenever I get a signal from my system.I seem to have developed an inability to accept the market is going higher and just freeze.I think this stems from the fact that I believe that the market is overvalued and risen too far too fast,but obviously it hasn't as it continues higher.I'm normally OK at just trading what I see unfolding,but just recently I can't bring myself to go long.I've tried just trading to the short side,but if anything this has just made setups more difficult to spot.As I say,normally I have no problem being long or short,but these last few days I just sit there staring into the headlights.Any help/advice appreciated.

cheers

 

[china white]

I am glad u brot this up mate. 1st bit of advice - dont worry, it hap's to EVERY TRADER from time to time. An example from my career - remember Bookham Technologies? floated in June 2000 at 10 quid, peaked in August same yr at 50? In a selling off US mrkt? here we go - its October 2000, Bookham is trading @ 22 quid, 2 days b4 trading statement. Our head of desk (who is a brilliant trader btw) gets some inside whispers about what the statement is gonna be like and we go MASSIVELY long issue. I get a green light from our compliance and buy cartloads of Bookham on my personal acct. The statement WAS brilliant but 2 weeks down the line the issue traded at 10 quid! YES, TEN QUID! I cud not commit to a long position for a good cupl of months after that.... However, scarred and bruised as I was, that was a BRILLIANT trading lesson - on discipline, and well not taking anyone's view as a basis for YOUR trading. Listen to your guts mate, and if yr gut is telling u not to go long, play shorts b4 this feeling fades out. It will, trust me

 

[Grey1]

Steve,

Donot go long or short if you need to predict the market.. You are very right in saying market is overvalued based on fundamentals.. However market always looks into future..


My Long term portfolio is Long Biased ( 70% )
My Swing trade portfolio ( 3 days ) is Short biased ( 20 % on very over bought stocks such as VRTS )
My day trading account DONOT HAVE ANY BIAS WHAT SO EVER ( 10 %).. I trade the market as it unfolds..

I feel there is more risk attached to being short for a longer time frame such as next 12 month...

 

[joffliver]

I thought it was just me! I also can't see how this feel good stuff can last. All these bloated Q3 earnings reports and economic data seem stangely 'rosie'.

I'm either getting paranoid or somethings got to give. I also made the mistake of looking at a 10 year chart. It's a long way down from its present level.

Shorted the dow after closing (it's the gut that made me!).

 

[2468steve]

Thanks for replies.I should add that my trading style is to look to buy weakness and sell strength.I've never really found myself suited to buying breakouts,selling breakdowns,and tend to look for reversal setups,trying to catch a change in trend.This suits my style as I normally swing trade,and gives me an identifiable stop/target.
Going long recently though has been getting more difficult,as I don't just take the trade,but talk myself out of it in my head,then of course the opportunity has gone.
eg today I had a buy signal at 9732,but just watched, convinced it would break down.

Perhaps I should give it a rest and just watch for a few days.

cheers

 

[twiggytwo]

Hi Steve ,I have a few words that I say to myself if i'm not sure of the market direction (if in doubt hang about ) and this is what I do.
I spread bet the Dow by the way, you can see what I think in the Dow contest. best of luck twigglet

 

[barjon]

Steve et al

I suffer from the same thing. My worst day trading comes
after I've spent a happy few hours establishing a long(er)
term view of the market - ftse in my case. I then find it very
difficult to approach each day "cold" without any inbuilt
prejudice as to direction. I've not got an answer - but if I
find myself "over prejudiced" I trade half position on signals
against my prejudice (then pat myself on the back if they don't
work out or kick myself for a wimp if they do!!).

good trading

jon

 

[rossored]

I've had sort of the same problem but with both long and short positions!! I stopped having the problem when I stopped doing EOD analysis. As I'm a daytrader, I suddenly sat there and thought "what the hell am I analysing overnight for? I never hold overnight anyway!".

Sometimes I think I'm too dumb for my own good.

 

[stevet]

markets are just for gambling in - like casinos - so they can never be over or undervalued - just figure out the predominant trend and go with that - and if you cant figure it - that means no one else can and its time to kick back with a beer and wait for someone else to get the ball rolling one way or the other

 

[2468steve]

Thanks for responses people.I've traded today with everything turned off,no TV,no bullish screams coming from CNBC.....just my screen.
Information overload had set in I think......back to basics...

thanks again