Friends, I have been trading futures from the last couple of years. I am facing the problem where I book profits too early and drag losses too long. I trade with the intention of making 10-15 pips but when faced with losses held on to those trades and worst end up averaging them. After every mistake I swear that I’m not going to make it again but then I keep on repeating this destructive behavior. I feel totally useless and worth nothing. I feel I’m just gambling my hard earned money. How can I get rid of this mentality. Please help.
just stop doing it
or stop with trading
simple as that
Sounds like you expect every trade will be a winner, every day a profitable day.
And that makes me think you don’t have a pre-planned strategy. A full trading strategy would allow you to see the % of losers in every 100 trades, and there is really no reason whatsoever to worry about these, they are unavoidable, you cannot eliminate them.
Your eventual chosen strategy should always use a stop-loss, and never involve averaging down on a loser. Personally, I think day-trading is a fast road to ruin for most new traders and I wouldn’t recommend it until you’re successful on long-term tine-frames.
Thanks, tommor. I use regression channels to plan my trades. I sat down today to analyze what actually was happening:
1 - I was playing with the money that I could not afford to lose, thus the added pressure to not to lose and average to get out at breakeven.
2 - Trying to pick top and bottoms
3 - Trying to justify my bad trading practice based on external factors like when I got out, the markets turned right there. I was not stupid. This was so wrong.
4 - I have just closed my derivatives account and decided that now on I will only focus on swing trades on a 5000$ capital using simple process of buying at support on a daily chart.
5- If I am able to consistently make profit by doing this, then maybe one day I’ll return to day trading.
Thanks, MrDe. That’s what I’m going to do. Give up day trading.
Brilliant analysis. Full marks to you sir.
Thanks and more thing I have realized is that too much screen times impairs the judgement and blocks the big picture. I feel so light today as if a lot of weight has shifted from my shoulders.
@alokmonk
ok mate
YOUR PROBLEM IS HABITUAL
Research and learn the following
Neuro Linguistic Programming
you can also search
Neuro Associative conditioning
Very very useful stuff for getting rid of bad habits
alternatively, you can see a psychologist who is an expert in the above topics
they will assess your specific needs and change the way you think and do things
Don’t be ashamed mate, seriously.
it’ll make you function more efficiently
but, you can always download a free pdf of NAC and NLP from somewhere on the net for free
and you could you tube the crap out of it
YOUR PROBLEM IS HABITS, Not strategy
Yeah, Martin. Discipline, habits,and accountability towards actions rather than searching for an excuse for a certain behavior. That much I could figure out today. Becoming a better and disciplined person before trying to be a good trader is the key, I guess.
Here is the system that I have been using. They grey line is the mean and the price on the extreme standard deviations tries to come back to the mean line. The overall slope of the channels gives the overall main trend direction. The system has a positive expectancy, but instead of waiting for the right entry I got too eager to be in the trade that I have taken positions contrary to the main trend on 5min charts and if that goes wrong, then I looked at 1min chart to get some hope or averaged it.
I have been such a jerk. It has been mostly to do with greed and want to be in trade every single day even when there was no clear edge present and the icing on the cake was averaging down my mistakes.
mate, i was once taught 2 things
-
wait for the trade to present itself, don’t force it
-
build a case - it means, if you have a theory… PROVE IT, if you can’t, don’t trade
Simple and profound thought. I will always remember this.
You’re Welcome…
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Many traders make a mistake. They remain in a pressure that I have to earn this much money every month. As a result they become reckless and restless. If you are new forget that you have to pay bills from profits. It’s a learning period. You can try for long term trading. But it’s all about finding your own trading edge.
That’s the need of the hour for me, FerdousAzam. Trade long term and focus on my process than the let’s become a millionaire mindset.
These simple rules made big changes for me.
- All systems work some time. . .no system works all the time. Use a stop loss. Fixed based on pips or % of capital, support or resistance lines. Make sure you understand the pair you’re trading. No pairs have the same spread and you need to understand that to know if you made a bad analysis or it’s just the market moving up and down.
- Nobody ever went broke closing a trade in profit. Nothing wrong with taking small profits. I did and do it myself, I adjust my stop to reflect total a % of total profit.
- A trade plan that is not written is just a wish. Use support and resistance to map out trades. My persona; opinion is you have no hope up trading shorter time frames long term unless you can trade longer time frames. You can also make shorter trades in the larger time frames. Try the daily for trend, the 4 for momentum and 1 hour for entries.
Good Luck
Gp
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This is exactly what I am practicing right now. thanks for sharing your wisdom, gp00053 
In my years as an engineer, I had to analyze data. One of my weak points was seeing what I wanted to see rather than seeing what was there. I’ve found that spectre has come back to haunt me. I have be stung by trying to make the data fit the trader rather than making the trade fit the data. I have changed a number of aspects of how I approach trades and the big one is just watch how the market is developing, there’s no rush and make sure I have all my ducks in a row. I have seen improvement with the changes in just a matter of days.
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That’s cool, rjbabcock. That’s precisely the thing that is key to trading I believe. Wait for the setups rather than force your view on the stock. I’m finding it difficult to master but I’m trying.
This is great insight. It’s why I document all my trades, idea’s and analysis. I’m not a bad trader but I make the same mistakes over and over again. Like dieting or addiction. You have to recognize when you’re about to sabotage yourself. Documenting is key.