Finally, I was able to get a win under my belt with my new account. The past couple of days, I haven't even had the ability to trade the full day because I hit my risk limits right at the open. It was a mix of performance anxiety and trying to press the trade. I did a lot of reading and reflecting last night on what the problem would be. Scouring through the 101 lessons Dr. Bret writes in his newest book The Daily Trading Coach, I came across what I believed I was doing. I was attempting to force the trade and when that clearly was not working, I believe, I experienced performance anxiety. I spent a significant amount of time doing my preparation and visualization pre-market today. A little bit of meditation to balance myself and entered the market with orders where I wanted to do business. I waited a bit longer today to let the market find its way and then I settled in, business as usual. Stepping back and letting the market find its way definitely helped to trade with a more calm and balanced focused. The past three days where I hit my risk limit of 300 dollars have been great learning experiences. Each day, after wanting to put my head through a wall, I stepped back, exported my trades into TraderDNA, and reflected on what I could improve on tomorrow. I just really needed to get a win under my belt after experiencing three straight losing days with a brand new account. I knew it wasn't my strategy or tactics, many times after hitting my risk limits, I would watch the market play out one of the scenarios I had prepared for. I knew it wasn't my tight risk management and how I "campaign" position size, there was no need to increase my risk limits yet. I distilled the problem down to, can you guess... psychology. Dr. Bret's books came in handy here, and I would recommend them to anyone with a conscious. Funny thing was, I didn't spend a very long time reading it, I just flipped to the Chapter Index and found what I believed was the problem (Lesson 15: Pressing: When You Try to Hard to Make Money). Yea, I was definitely pressing in the previous days. That lesson hit home immediately.
Video:
Grinding Out a Win in a Crap Market
Thursday, November 5, 2009
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11 comments:
Good stuff, when trades go bad it definitely puts my methods into question. The hardest part is to get up and go again, I don't think much of Brett most of his stuff looks like fluff to me I know he has lots of fans including you but nothing worth my time IMO. He might be good one on one. Could definitely sense the nervousness in your trades, but come come back this are the times you want to be trading as IV is picking up.
Looks like you should go back to using Fibonacci or Andrews Pitchforks...LOL. J/K...When things change...results change.
I still think the 300 Risk Limit is too tight and puts you even under more pressure when the first trade doesn´t work out. Since you seem to go for 3-4000 per week I think 500 is more appropriate.
sorry I forgot to add this : think of this: if Federer has lost the first set he is not going to give up and quit the tournament , since he is confident in his ability,talent and experience. He presses on and 90% of the time he will win set 2 and 3. You on the other hand have created exactly what is a traders worst enemy : performance anxiety. You are a bit over analyzing things , keep it simple. I have looked at Market Profile 22 years ago and read books and seminars etc. but it was not for me.
I use it as an add on but not to trigger trades.
No method is perfect ,it is still the person that matters the most and i think you are starting to get a bit too tight. Chill out and relax , things will come back to you but not with 300 risk limit.
hey Matt....i havent commented much on you page but sent you a PM every once in a while but i would have to agree with the last comment. i ve been following you blog now for months and in the last couple of weeks u have changed your attitude and self talk quite a bit in my opinion and you seem too tight and eager which i think has not really helped you.....when u just traded easily a while back it looked as if you are one with the market and especially your strategy/method, dont think its the same now looking at your videos. obviously reviewing your performance and everything around your trading makes sense but you should not forget to just trade while you do these other important things. as Dr. Brett says find what you are doing good and repeat it, dont just dwell on your mistakes. u seemed to have done that perfectly and now its gone a bit....
anyway, was just meant as feedback, so keep it up !
It's always different when you trade real money, which is what I believe your change was, from simulated to live. Keep it up, but count ticks or points, not money.
In regards to method, nothing needs fixing. In regards to
Risk management, I believe 300 dollar risk limit is
still sufficient. Risk limits will increase proportional to
my psycholohical comfort using an increased number of contracts.
If volatility greatly increases, I will adjsut the limit in
accordance with it. Psychology is now my central focus in
regards to market study.
Wait were you really trading SIM before?
Yes,I'm 22, not until recently did I have enough capital to correctly fund an account.
I had enough to make the probability of risk of ruin near 100%,
but not enough to actually conduct business correctly.
Businesses fail when undercapitalized, it is no different in trading.
If brokers wanted to give you a fighting chance, they would
not ever let you open an account for 2.5k or 5k
With all the talk above about risk of ruin and small account sizes on the ES, I thought it might be worth mentioning that ETF's, such as the Proshares S&P 500 (SSO) or the (SPY) might be good for someone who has enough money to open a pattern daytrading account, but wants to only trade 50 or 100 shares. This way they can trade the S&P 500 without the $50 per point risk of the ES futures contract, and be able trade as small as they want.
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