I have been trading for about six months. I have 3 set-ups I use which are sucessful about 65-70% of the time with a 1:1 or 2:1 risk/reward ratio (when executed correctly). I am very pleased with my progress so far but I have a stumbling block!..
My problem lies with coming out of a trade too soon and not allowing the trade to arrive at it’s conclusion for fear of a sudden reversal. On a trade where I have a 10 pip target, I may get out with 4-5 pips or if I have a 25 pip target I may come out at 10. As you experienced traders will know, this completely screws my risk to reward ratio as it means I will feel losses more severely than I should. The frustrating thing is watching my target get hit when I left the trade a while back.
Does anyone have any good, sound advice as to how to keep calm and on top of your emotions when in a positive trade??? I am very good with self discipline with regards to all other aspects of my trading.
If your emotions are causing you to exit too soon, then you need to consider your options.
1.) Trade smaller lot sizes so the % change in your account isn’t causing you panic and badly manage trades.
2.) Practice, practice and practice with sticking to a sound trading strat that lets you exit based on solid information from your chart.
3.) Utilise a mechanical exit strat that will only permit you to exit a trade when the rules say you can, such as using an ATR trailing stop.
4.) Strengthen your psychological side by reading free ebooks, online tuts etc.
Bottom line though is that if you develop a comprehensive trading plan that forces emotions from your trading day you will be one step closer to consistent profits.
Oh, and I forgot one more - If you are in a trade, and have set a stop loss and take profit already, just minimise your trade platform until the trade is done (use an alert to let you know it’s closed). You can’t interfere with a trade if you’re not on your platform!
You know what Cord, that is probably the best thing to do!!! I appreciate your detailed feedback. I am always surprised at the amount of sucessful traders on here willing to help out one of the new kids.
I was going to suggest something similar. If your system is “set and forget” then you might as well do that. Watching the screen isn’t going to do anything for you.
Hello tomm,
Is not a simple as shutdown your computer and leave your trades there. You need to develop a method for taking profits that suits with your trading style. For example in my case, my trades start at london open and some of them last until NY closes. But i take a look at them twice: 1 hour before NY open (before the news), and aldo before london closes. I just take a look to see how are they doing, to move my SL and secure some profits. I dont spend more than 5-10 minutes.
So i would suggest that you take a look at some points to see if how are they doing. Here are some things you can do depending of your system:
move the SL to BE
movel to SL to secure a percentage of profits (50% is a good one)
or just place another trade if your money management allows you.
The thing is that you need to keep record of this, to know what is better for you. If your system is high risk/reward as you say, then you need to focus in not losing because the system will do the rest. So my advice is place your trades, leave them there for some minutes or hours (depending on your system) and come back to the computer to check how are they doing. If you trade NY session then you could take a look before london closes becasue trends reverse a little at that time.
I know where yor fear come from, your afraid that the trend reverses and you end up losing the profits you have made so far. I understand that, i ´ve been there. Is painful when you are 100 pips ahead and then market reverses and you end up losing. But you cant take all the money form the market, just a piece. So you need to develpo a method for not letting the winners become a loser. Learn how to stop losing and the money will come really easy. So the first stepto overcome that fear is to keep a trading journal and record all your trades, and calculate your ratios. If you dont have a trading journal, this is a good reason to start one.
It simply all adds up to pushing that level of confidence to a higher plane.
There have been periods I remember clearly in my own trading when I felt I’d changed level and that created some very positive consequences thereafter. That feeling is definitely worth pursuing, and you seem to be on the right path.
I don’t know if you’ve heard of the term ‘deliberate practice’, but its essentially the name given to the effort that makes the difference between being expert or mastery or being just unexceptional.
It argues talent is a myth and that greatness is a choice that you make rather than some hereditary genetic pot luck.
Neither is it solely about practice makes perfect, it’s more a combination of internal processes of learning that make the difference, and so change our understanding of the subject, in our case trading, and force a reorganisation of our actions.
The market has a rhythm that you can catch onto. Very seldom does it move from one level to another in a single strong move. There is usually a pause or even a pullback. Don’t exit on the first one. But usually there aren’t more than three so don’t wait too long. I guess what I am saying is after the second pause, start looking for an exit.
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