Safe Gaurds - For when discipline breaks down.

NVP

Legendary member
37,760 2,100
Hi have same problem too & replying in this thread is self therapeutic to me.
But i figure out a way to control this emotion & also developed a philosophy on this. I might be wrong, but this is the only way to stop myself from getting into "Mad Zone".

I limit myself on the number of the trade I will make per day. So if cross the limit & made day loss, then I consider its not my day.
If I constantly win all trades & market is giving me a good trend, then I go further than my trade limit but with a protection. My extra trades are like free trades.

I count loss & profit not weekly but monthly. Most of the prop trading firms follows that.
End of the month I see myself where i'm standing.

Lastly risking less is blissful.

good post (y)

I see the point of the limits set - but remember the market has no boundaries so if it moves you have to fill your boots ................trading is about feast and famine.........markets don't understand the concept of averages ...it is us as traders that try to fetter those chains on it

I would try to set limits more within the rules of the system..........if you've messed up on x trades and losing hand over fist all the time that's not a problem solved by limits.....that needs a new system ;)

N
 

barjon

Legendary member
10,705 1,809
..................... If you were a professional trader working for a firm, your risk mgr would shut you down ............... ?

ffsear

This bit of the DOW's post is very pertinent I think. You are really looking for a risk manager to shut you down when madness strikes.

Your own mindset stops you being your own risk manager - changing ones mindset is so much easier said than done - so you have little option but to look elsewhere. You may be able to impose position size restrictions with your broker, your account size is also a good limiter, or a trading buddy who can log you out of your account if they see you acting against your rules. Or anything you can dream up that gives you some sort of hurdle to jump before you can trade to give you pause for thought.

Personally, I found it impossible to change my mindset despite years of trying so I eventually stopped trying and tried to build my strategy around my strengths and weaknesses instead. The important first step in that is to fully recognise your weaknesses and more power to you for having done just that :)
 
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NVP

Legendary member
37,760 2,100
hes a palace fan as well................so he needs to admit that one first
 

sun11

Experienced member
1,474 337
good post (y)

I see the point of the limits set - but remember the market has no boundaries so if it moves you have to fill your boots ................trading is about feast and famine.........markets don't understand the concept of averages ...it is us as traders that try to fetter those chains on it

I would try to set limits more within the rules of the system..........if you've messed up on x trades and losing hand over fist all the time that's not a problem solved by limits.....that needs a new system ;)

N

Thank you NVP!
Yes you are absolutely right about losing hand. In fact I have faced those & of course I changed system, but I changed my mind set more than the system...Cause sometimes i believe its the actual culprit. :rolleyes:

Recently i found an article by Van Tharp, The Loss Trap. Its relevant with the OP's issue.
http://www.vantharp.com/Trader-Test/The-Loss-Trap.htm
 

ffsear

Senior member
2,243 490
ffsear;2561682 [USER=4601 said:
@DowJones[/USER] Because i'm only human... I dunno. Emotion just takes over..

Some recent results... All in line with my rules, system etc, I can keep going like this... but at some point in the next 6 months will i do it again?


I should have added that I was diagnosed with adult ADHD 5 years ago, which can makes me very impulsive. (Act now, think later). I have medication for it, but I don't like taking it. Maybe i should take the medication and see if it stops me from having these blowout moments @DowJones
 

Fugazsy

Veteren member
3,661 677
I should have added that I was diagnosed with adult ADHD 5 years ago, which can makes me very impulsive. (Act now, think later). I have medication for it, but I don't like taking it. Maybe i should take the medication and see if it stops me from having these blowout moments.

Hi ff

I went trough the same as you are doing it now, I use to make consistent returns for a couple of month and then blow it up in one day.....anyway to make the story short I got to the point I had to change or stop trading

In the "zone" book that you mention the other day, there is a lot of material really helpful in regard especially the chapters : the dynamic of perception and the market perspective, but I think all need to be read and reread and when you do it get involved as much as you can, you need to feel it.....

Remember is a about a proper set of mind, we need to totally embrace uncertainty before we move a step higher in trading or else, when we do a trade will became just a trade and nothing more.
 
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ffsear

Senior member
2,243 490
ffsear

This bit of the DOW's post is very pertinent I think. You are really looking for a risk manager to shut you down when madness strikes.

:)

Pretty much yea! Or I just need to be in front of a chart, shouting "Buy Here, Sell Now" I need someone else to press the buttons.!

I called Capital spreads and asked if they can limit my trade size to £5pp

"No can do sir"

Typical!
 

Dinos

Veteren member
4,112 714
FWIW, I keep sufficient capital in my account to allow me 10 consecutive losing trades, not a penny more, I have a set number of trades I target a day broken into 3 sessions, if I have 2 consecutive losing trades in a session, I stop trading until the next session and use the time reflect and review the losing trades to analyse what went wrong.

I record every trade in a Trade (daily) journal and have sub journals for eg: Mondays, Tuesday etc and also journals for the 3 time sessions I trade, so I have an accurate record knowing my strongest / weakest days and times and this allows me to see any particular patterns, I can then adjust the R/R to reflect my edge on each trade.

Helps me manage "the revenge trading", trading the plan, trying to keep the emotions in check, accepting the losses and taking profits when I see fit.

Have a daily target pip count, when its hit stop trading.

All the best
 
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Charles Bronson

Member
75 12
Only briefly skimmed through the thread. The problem I see with discipline is that it conforms to a set of rules that will only work in some markets. Most systems have this problem, they work for a while then go uppity, then begin to work again.

I experienced this myself in my early days and blamed my strategy, my plan, my discipline. But it was only later that I discovered that it was the market.

What you may be struggling with is the bigger picture and how to integrate that into your trading. Once you can get a firm understanding of price movement then discipline is no longer an issue. By price movement I mean trading without any indicators, losing all reliance on indicators for they will keep your attention on something that happened before and seeking a similar result. I agree that patterns repeat, but without fully understanding the flow of price they will always create confusion and maintain the air of uncertainty.

I understand it is different for all traders, just hope i it helps someone.
 

DaxSlut

Well-known member
301 13
Doubling up a losing trade is a common mistake that has hit us all but we sometimes do it nonetheless.

Just don't double up too soon. Assess the point where you add is it realistically going to break even ? If not close accept the loss and walk away - don't under any circumstance rage trade trying to make up for points lost.

I have plenty of instances of perfect entries where I simply take a profit without giving thought of the 100+ points profit I could have had. Walk away from such instances without regret is the best answer.

Here's what could happen if you lose it in rage.

I correctly predicted the DAX buy back at 4:30pm so went in and bought in hard at the bottom at £50pp. The trade went straight into profit and started to creep up to £2000 (40 points) considered banking but I was anticipating a massive spike up and despite seeing the trade turn I decided to hold just in case I missed it.

So as you've guessed I watched 2k profit go down to ZERO and let it b/e LOL At this point I was about to re-enter when the DAX fell another 20 points which threw me a little .... about to buy the DAX spiked 100+ points in a minute and yes I raged and shorted in anger. Instead of pocketing £9k from that trade I ended up losing £2k before I finally walked away.

Moral of the story rage quit don't rage trade and don't dwell of missed opportunities. Market will still be there tomorrow and the day after - time your entries and you'll be golden
 

JER08

Well-known member
278 11
Only briefly skimmed through the thread. The problem I see with discipline is that it conforms to a set of rules that will only work in some markets. Most systems have this problem, they work for a while then go uppity, then begin to work again.

I experienced this myself in my early days and blamed my strategy, my plan, my discipline. But it was only later that I discovered that it was the market.

What you may be struggling with is the bigger picture and how to integrate that into your trading. Once you can get a firm understanding of price movement then discipline is no longer an issue. By price movement I mean trading without any indicators, losing all reliance on indicators for they will keep your attention on something that happened before and seeking a similar result. I agree that patterns repeat, but without fully understanding the flow of price they will always create confusion and maintain the air of uncertainty.

I understand it is different for all traders, just hope i it helps someone.

One of the best posts I've seem for a long time, IMHO.
 

tokyojoe

Established member
874 289
Only briefly skimmed through the thread. The problem I see with discipline is that it conforms to a set of rules that will only work in some markets. Most systems have this problem, they work for a while then go uppity, then begin to work again.

I experienced this myself in my early days and blamed my strategy, my plan, my discipline. But it was only later that I discovered that it was the market.

What you may be struggling with is the bigger picture and how to integrate that into your trading. Once you can get a firm understanding of price movement then discipline is no longer an issue. By price movement I mean trading without any indicators, losing all reliance on indicators for they will keep your attention on something that happened before and seeking a similar result. I agree that patterns repeat, but without fully understanding the flow of price they will always create confusion and maintain the air of uncertainty.

I understand it is different for all traders, just hope i it helps someone.

Good post
 

tomorton

Legendary member
8,409 1,338
Going one step back, why do people's systems keep on churning buy signals in a weakening market, and why do they keep obeying them?

My suggestions are firstly over-focus on entry - the hope for the signal that will never fail, the holy grail that makes trading into a daily ATM.

Secondly, optimised backtesting using selected ideal chart periods - flattering the entry signals' performances.

A system that produces the same signals in the same markets under all conditions just isn't finished yet.
 

ffsear

Senior member
2,243 490
Well, I've had no financial meltdowns since I started this thread.

And I think its down to 1 change that I made with my trading. I don't trade live any more, by that I mean I'm still trading real money, But I only use orders, I don't physically hit the sell or buy button any more. This way I'm sticking with my original plan that I set out every morning.

Discipline is still required obviously. But as I stated my major weakness is impulsiveness (act first, think later) But by setting orders and logging off, I've removed the impulse trades from my life.

So far, so good!
 
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BSD

Veteren member
3,819 985
Another idea might be jump up a couple of time frames.

Gives you less opportunity to get excited as you get fewer (valid) signals per your system.

You could compensate for fewer signals in one market by adding a couple more uncorrelated markets, and doing that get your 20% per month anyway.

But looking at dailies, for example, is going to keep the adrenaline more at bay than looking at a 2 range bar chart of the Dax, say.

;)

Or just think of long term results, of what longer term compounding is going to provide you with if you remain disciplined and just trade the plan.

Thinking of a longer term outcome - and the freedom that entails - makes the outcome of any single trade - which is pretty random anyway unlike your edge over a large sample of trades - pretty inconsequential.

Best of luck anyway.

You are one of the very few with an edge, so use it to the hilt.

And if that entails popping Ritalin, I'd do that.

:)
 
 
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