Who makes me lose money?

[shadowninja]

Since starting trading, I have realised that once I had a system in place that I know can make regular money, the only person to stop me being successful is myself. So, to help people new to day trading or who are yet to turn this hobby into a source of income, I thought I would write a few things to check:
-Greed. I have lost so much money through being greedy. When it goes into profit and bounces around, I am desperately hoping it will increase. Of course, the reality is that many times it just drops. But it is still in profit, so I start thinking, "Oh, it was £50 just now. It will happen again." but it drops further. Again, I think, "Hey it was £50 just now. Ok, it's £15 now but it could rise..." And before I know it, I'm in loss. Or it's a situation where the profits are minor and it starts bouncing around. Once more I start willing the profit to increase. At that point, it's best to get out, I've found. Sure, it could go up. It could also go down. Ascending rolling stoplosses help here.
-Impatience. I have a set of rules and through experience, I know that I will more likely profit by sticking to them. However, I start to get impatient and then go in when the conditions are not perfect. Yep, I lose money.
-Boredom. Staring at the screen can get boring. And I start to spot opportunities that aren't really any good. So I buy in. And find out I was wrong. (I do this less now because I occupy myself with other things like computer games.)
-Discipline. I guess it is covered by impatience and boredom. However, the problems above are increased because I do not obey my stoploss. Additionally, sometimes, I am just wrong even if the conditions were perfect. I start thinking, "Well, I've seen it turn upwards when it's been like this before" or "The conditions were right so it should rise!" when it's gone through the stoploss. And I find that it continues to plummet. I eventually stop out at double the stoploss. If I was more disciplined, I'd get out earlier and save myself a lot.
-Eagerness. It is an exciting hobby. Watching your profit increasing and decreasing, not knowing when to sell, or if this time, you're in for a massive profit. So I start trying to buy in thinking, "It's worth a punt." I might as well put money on the horses if I am doing that.
So there you go. How to lose money the easy way. I will add more when I think of them.

 

[new_trader]

Me Too

Since starting trading, I have realised that once I had a system in place that I know can make regular money, the only person to stop me being successful is myself. So, to help people new to day trading or who are yet to turn this hobby into a source of income, I thought I would write a few things to check:
-Greed. I have lost so much money through being greedy. When it goes into profit and bounces around, I am desperately hoping it will increase. Of course, the reality is that many times it just drops. But it is still in profit, so I start thinking, "Oh, it was £50 just now. It will happen again." but it drops further. Again, I think, "Hey it was £50 just now. Ok, it's £15 now but it could rise..." And before I know it, I'm in loss. Or it's a situation where the profits are minor and it starts bouncing around. Once more I start willing the profit to increase. At that point, it's best to get out, I've found. Sure, it could go up. It could also go down. Ascending rolling stoplosses help here.
-Impatience. I have a set of rules and through experience, I know that I will more likely profit by sticking to them. However, I start to get impatient and then go in when the conditions are not perfect. Yep, I lose money.
-Boredom. Staring at the screen can get boring. And I start to spot opportunities that aren't really any good. So I buy in. And find out I was wrong. (I do this less now because I occupy myself with other things like computer games.)
-Discipline. I guess it is covered by impatience and boredom. However, the problems above are increased because I do not obey my stoploss. Additionally, sometimes, I am just wrong even if the conditions were perfect. I start thinking, "Well, I've seen it turn upwards when it's been like this before" or "The conditions were right so it should rise!" when it's gone through the stoploss. And I find that it continues to plummet. I eventually stop out at double the stoploss. If I was more disciplined, I'd get out earlier and save myself a lot.
-Eagerness. It is an exciting hobby. Watching your profit increasing and decreasing, not knowing when to sell, or if this time, you're in for a massive profit. So I start trying to buy in thinking, "It's worth a punt." I might as well put money on the horses if I am doing that.
So there you go. How to lose money the easy way. I will add more when I think of them.

Yep!

 

[shadowninja]

Interestingly, today I was looking at my profit/loss. I felt indifferent. I knew that profit was good and loss was bad. However, I was just as indifferent about my stop being hit and that I didn't move it back as I am currently indifferent about another position being in profit. No feelings of panic or depression or excitement.

I think I may have cracked it.

 

[nkruger]

With regard to your problem of watching a large profit be reduced slowly into a small loss on the screen in front of you - I found it helped me in the early days to have a 'pip target' for the day. Onced I'd reached that (25 pips) I would walk away for the day and go and do something completely unrelated to work. I found if I carried on, I would normally give back the gains ! I also remember some large losses as well - again just walk away and don't trade for a couple of days. You then come back to it with a clearer head.

Just my opinion......

NK

 

[new_trader]

Interestingly, today I was looking at my profit/loss. I felt indifferent. I knew that profit was good and loss was bad. However, I was just as indifferent about my stop being hit and that I didn't move it back as I am currently indifferent about another position being in profit. No feelings of panic or depression or excitement.

I think I may have cracked it.

No, I don't think you have cracked it. Don't look at your profit/loss so much, instead, look at the market and try and tune into it. Let it tell you when you should enter or exit. Don't think "profit is good and loss is bad". Think of good entry and good exit. A loss is simply the cost of doing business which will diminish as your business acumen improves.

Just my opinion too

 

[ampro]

I also remember some large losses as well - again just walk away and don't trade for a couple of days. You then come back to it with a clearer head.

I hear what you're saying, & that's fair enough when you're stuck in the middle of a big, bad pile of doo doo.

But stepping back into the ring a couple sessions later (with the clearer head) isn't necessarily going to equate to clicking the mouse to the positive side of the deal again. It all depends on why & how the losses occured in the first place?

Until the reasonings behind the cause are unearthed, you will/could be merely setting up to repeat the exercise all over again.

Particularly if you're a new entrant into the game.

 

[grantx]

NT,

"good entry, good exit". I reckon this is the crux; very simple, but for the beginner, difficult to initiate and the major weakness. Once overcome, increased profits/reduced losses.

Grant.

 

[rols]

Some worthwhile articles here...

http://archives.tradersavvy.com/2006/0808.shtml

 

[laptop1]

Since starting trading, I have realised that once I had a system in place that I know can make regular money, the only person to stop me being successful is myself. So, to help people new to day trading or who are yet to turn this hobby into a source of income, I thought I would write a few things to check:
-Greed. I have lost so much money through being greedy. When it goes into profit and bounces around, I am desperately hoping it will increase. Of course, the reality is that many times it just drops. But it is still in profit, so I start thinking, "Oh, it was £50 just now. It will happen again." but it drops further. Again, I think, "Hey it was £50 just now. Ok, it's £15 now but it could rise..." And before I know it, I'm in loss. Or it's a situation where the profits are minor and it starts bouncing around. Once more I start willing the profit to increase. At that point, it's best to get out, I've found. Sure, it could go up. It could also go down. Ascending rolling stoplosses help here.
-Impatience. I have a set of rules and through experience, I know that I will more likely profit by sticking to them. However, I start to get impatient and then go in when the conditions are not perfect. Yep, I lose money.
-Boredom. Staring at the screen can get boring. And I start to spot opportunities that aren't really any good. So I buy in. And find out I was wrong. (I do this less now because I occupy myself with other things like computer games.)
-Discipline. I guess it is covered by impatience and boredom. However, the problems above are increased because I do not obey my stoploss. Additionally, sometimes, I am just wrong even if the conditions were perfect. I start thinking, "Well, I've seen it turn upwards when it's been like this before" or "The conditions were right so it should rise!" when it's gone through the stoploss. And I find that it continues to plummet. I eventually stop out at double the stoploss. If I was more disciplined, I'd get out earlier and save myself a lot.
-Eagerness. It is an exciting hobby. Watching your profit increasing and decreasing, not knowing when to sell, or if this time, you're in for a massive profit. So I start trying to buy in thinking, "It's worth a punt." I might as well put money on the horses if I am doing that.
So there you go. How to lose money the easy way. I will add more when I think of them.

In a word you lack Discipline

 

[nkruger]

1.)But stepping back into the ring a couple sessions later (with the clearer head) isn't necessarily going to equate to clicking the mouse to the positive side of the deal again. It all depends on why & how the losses occured in the first place?

2.)Until the reasonings behind the cause are unearthed, you will/could be merely setting up to repeat the exercise all over again.

3.)Particularly if you're a new entrant into the game.

Point 1.) Going away from the screen was a defence mechanism - I didn't know in those days exactly why the trade went wrong, so I would hope that a few hours quiet reflection would give me a 'eureka moment' and everything would become clearer.
Point 2.) The reason behind the loss would normally be deep rooted un-confidence in my system/strategy. (Is there such a word !!) This is the problem with 'off the shelf' systems that are sold as manuals or monthly systems - because you don't know why the signals are being generated, you can never have complete confidence in the strategy, no matter how good the past performances is, and so you are always in danger of not following the signals to the letter and let emotions enter the fray and panic buy/sell.
And point 3.) Yes I was a new entrant to the game.

Since I've being doing this full time (5 months now) I devote at least a couple of hours a day to reading up on what I consider to be important aspects of the job. A few things that come up time and time again are:

1) Develop your own plan/strategy, understand why it works, write it out and stick to it religously. You can then learn to trade un-emotionally.

2) Fully understand the ramifications of bad money management. Capital preservation is everything

I realise the above points have been covered in other threads, but they also seem appropriate here.

Nick

 

[nkruger]

In a word you lack Discipline

Exactly LT, and with confidence (in your trading strategy) comes DISCIPLINE....

 

[shadowninja]

I know I lack discipline! I have a system that, when I stick to it, works or limits loss. Sometimes, I forget and things go wrong.

 

[shadowninja]

hahahahahahaha I am a pillock. Closed out a trade today 10 minutes early because I thought the market was going to close at that time rather than... 10 minutes later. Took a loss of about 15 points versus a profit of about 30 points as just after I closed, the instrument changed direction as I expected.

Also had to bail on another position because I had too much water and didn't want to leave it open with a forced wide stoploss. 1 point profit vs the potential 50 I would have gained had I not needed the little boy's room. A expensive toilet visit if ever there was one. :cheesy:

 

[Splitlink]

With regard to your problem of watching a large profit be reduced slowly into a small loss on the screen in front of you - I found it helped me in the early days to have a 'pip target' for the day. Onced I'd reached that (25 pips) I would walk away for the day and go and do something completely unrelated to work. I found if I carried on, I would normally give back the gains ! I also remember some large losses as well - again just walk away and don't trade for a couple of days. You then come back to it with a clearer head.

Just my opinion......

NK

Sometimes I make my losses first

I'm on holiday so, yesterday, I traded FT and SP. Lost on FT, got most of it back on SP.

It makes a long day, though.

Split

 

[nkruger]

Sometimes I make my losses first

I'm on holiday so, yesterday, I traded FT and SP. Lost on FT, got most of it back on SP.

It makes a long day, though.

Split

You trade when you're on holiday !! Blimey.

Now I'm more experienced, I know that a loss is just one of the small percentage - so I don't get all worked up about it. I will now just carry on trading. Still have my daily pip target though...

 

[MSP Trader]

Hmmm interesting read, this thread. For my own penny's worth if it helps? i will give you my thoughts........

Point 1. You have a system for a reason - USE IT - PLAN YOUR TRADE AND TRADE YOUR PLAN
Point 2. Never let your loss run, follow your trade into profit and move your stop - LOCK IN YOUR PROFIT then your in a no lose position
Point 3. If you forget your own RULES put them in a place where you can see them ALL THE TIME SO YOU DONT FORGET
Point 4. A loss is part of the job, get use to it, and DONT TRY TO TRADE YOUR POSITION BACK
Point 5. READ READ READ READ - GET TO KNOW THIS JOB - GUT FEELING MEANS NOTHING - SYSTEMS MEAN EVERYTHING - WHEN YOU THINK YOU KNOW IT ALL (THINK AGAIN COZ YOU DONT)
Point 6. Just remember - only 5% ever win all the time.... BE PART OF THAT 5% DONT BE JUST ANOTHER PUNTER
Point 7. Just relax and enjoy the money

if the above helps? not sure but there you go ..........

Good luck

 

[shadowninja]

Definitely good advice. Thanks. I think I have to read my plan every day before a session.

 

[Splitlink]

Hmmm interesting read, this thread. For my own penny's worth if it helps? i will give you my thoughts........

Point 1. You have a system for a reason - USE IT - PLAN YOUR TRADE AND TRADE YOUR PLAN
Point 2. Never let your loss run, follow your trade into profit and move your stop - LOCK IN YOUR PROFIT then your in a no lose position
Point 3. If you forget your own RULES put them in a place where you can see them ALL THE TIME SO YOU DONT FORGET
Point 4. A loss is part of the job, get use to it, and DONT TRY TO TRADE YOUR POSITION BACK
Point 5. READ READ READ READ - GET TO KNOW THIS JOB - GUT FEELING MEANS NOTHING - SYSTEMS MEAN EVERYTHING - WHEN YOU THINK YOU KNOW IT ALL (THINK AGAIN COZ YOU DONT)
Point 6. Just remember - only 5% ever win all the time.... BE PART OF THAT 5% DONT BE JUST ANOTHER PUNTER
Point 7. Just relax and enjoy the money

if the above helps? not sure but there you go ..........

Good luck

It's the market that changes its plans, not me!!:-0

All any of us can do is try out the trade and drop it like hot cakes when it goes against.

When you fail, check out the trend, make sure you've got it right but don't get mesmerised, that should only happen to bunnies.

Split

 

[MSP Trader]

Your welcome, i dont know how long you have been in this game, i have traded for years, and it has given me many things that no other job could ever do. Take advice from those who know, and listen, learn and READ

Money management is vital to survive in this line of work, a little book that gave me a lot, and helped me sort out a few of my own in house problems, i suggest you read my friend.

It's called the The Richest Man in Babylon by George S. Clason It will be the best self investment you will make.

 

[shadowninja]

Only been in this game about 3 months. I try reading something new every day in the Traderpedia on this website as well as other websites. Have bookmarked the psychology stuff!

Will check out that book.

One thing I've noticed in trading (as much as in real life) is that you have to learn to adapt. Adapt or die.