For me, my biggest trading flaw is a big no-no…and I know it! Plain and simple…greed. I don’t know how many times I have been 50-75 pips ahead in a trade and let it drift back to 20-30 or even worse, turn it into a loss, before getting out. Luckily for me, I am sick and tired of this happening so I am now doing a much better job of doing 2 - 3 smaller trades per night, picking up 30-50 pips per trade, and being perfectly content with that while watching the account slowly grow.
I know we all have our weaknesses, just curious what some of yours are…maybe we can all learn a thing or two about ourselves and improve our trading a bit:D
When I started out my biggest flaw was cutting my winners short. I hated losing so I would close my trades out way before my trading plan said I should, just so I could call them a “winner.”
What happened was that even though I had a high win rate when I did get a loser it would wipe out the profits from my last 5 or so wins, so I never got anywhere.
Thankfully it wasn’t a problem that caused me to lose money, my account just stayed where it was for a few weeks until I learned my lesson.
I had, and probably still have, a dozen or more really bad flaws, most of them real whoppers. I’ll mention just one.
[B]Hi, my name is Clint, and I’m a revenge trader.[/B]
From the time I first started trading, I took it really personally when a trade went bad. My attitude was, “The market stole my money, and they’re not gonna get away with this!” I would jump back in with a chip on my shoulder, and a big enough position to wipe out the loss, and produce the equivalent of 2 winners. Doubling down, in other words.
Occasionally, this worked, which gave me just enough encouragement to keep trying it, over and over again. As a result, it took me a LONG time to get rid of this bad habit.
Along the way, I noticed something else: whenever I had a trade that worked out just the way I had planned it, I would be itching to jump back into the market, and do it again. Which is sort of the same bad impulse as revenge trading — getting into trades for the wrong reasons.
To this day, I have to keep an eye on myself, so that I don’t trade out of spite or glee.
When I first started my problem was not to get to nervous when I had a bad strike.
Now I still have that flaw hehehe but I would say that now i trade as a habit and there are times when I�m not 100% focus, as I used to be�
I’ve done this one 4 times and let it take out a weeks profits each time:
Put in a trade, with a TP and SL. Trade goes postive just short of my TP.
Trade then proceeds to reverse back, hover around my SL.
My evil head gnome then wakes up and convinces me that it’s just a fake out or stop hunting and convinces me that price will go back to my TP and then some if I just hold on forever.
The more it goes bad the more determined I become to hold on to it, because of course it will reverse, and then I how mad will I be that I got out with a loss!
So, round about -100 or so pips I finally give up and close out…
Then another head gnome wakes up, " hey buddy you look awful mad how bout a nice revenge trade."…
Luckily I don’t listen to the second gnome anymore and automatically go have a beer when he appears. Nicks, “kill a losing streak rule,” helped me with that one.
The first one is almost dead, but I have to kick him to make him shut up.
cutting losers. can cut something if I think my general bias is just plain wrong, but just don’t get the entry balance right, I just hate when u are in a positive trade and all the boxes are ticked, then it just reverses and u think no, it just breathing, so u give it some breathing, then end up cutting for a bigger loss than original point when u began to doubt the breathing room. If it goes the way I initially thought/planned it would go I do fine, but if it doesn’t and bobs about between slightly positive and negative, but not yet hit stop, doubt creeps in, and I end up taking a bigger loss, or cutting winners short. A 20-30 stop loss is of little help becuase that’s the typical move before some retracement occurs and sods law ( not always, but enough to make stop slightly larger) it will then peek out 10 pips below your risk threshold, then turn the way u initially intended - by which time you have been burnt and are too doubtful of the moves strength to re-enter or worse re-enter at the next profit taking point.
biggest trading flaw I had was impatience and not following my trading plan. I know backwards and forwards what is a good trade and what isn’t but yet somehow I get anxious and greedy and just want in a trade. So I’ll enter a trade that I know doesn’t follow meet all the requirements but will enter it anyway.
The other big flaw I had, which now I’m better at, is place my stops at stupid locations. Sometimes i’ll do the old, “I don’t want to lose more than this much money”, so i’ll put a stop there. Thing is, price retraces hits my stop but then keeps going back the way I thought it would.
If I would have put my stop at the most recent swing high/low like I always do I would have been fine.
Oh well. I’ve got control of most of my trading flaws. Now its more or less left to, “should I take this trade that meets all requirements but might not be perfect or should I wait for a better trade so that I don’t have as much risk.”
Which usually appears in the form of not using proper MM by risking too much on a single trade, but its the compounding of this with over trading that really gets me to drain my own bank.
For you newbies, who may not appreciate how EVIL revenge trading can be, here is something that Boris Schlossberg and
Kathy Lien wrote in one of their recent books:
Typically, the greatest point of vulnerability for any trader is right after a losing trade. The need to “get it back” is one of the strongest and most destructive impulses of human nature. Study the history of any blowup from that of the tiniest of retail speculators to the phenomenal flame outs of massive hedge funds such as Long Term Capital Management and you will see that the ruin is always triggered by the desire to recover losses quickly. This impulse typically devolves into random, seat of the pants decision making and ultimately utter destruction of capital. A physical pause in activity is one of the best ways to avoid the very unpleasant consequences of “revenge” trading.
[B]Millionaire Traders[/B], Kathy Lien and Boris Schlossberg, in the summary of their interview with Ashkan Bolour, p.304.
I’ve only been trading live one month and here is what has frustrated me. 1. Demo too long can create bad habits. 2. Be patient - Make sure you follow your plan. I’ve entered trades too soon, just to get in the game. 3. Over-trading 4. I do not want to lose and set stops too tight, then end up missing out on a bigger winner.
I have a problem with missing out on big winners occasionally by getting out too early. However, I do not mind doing so too much. Profit is profit, even if it is a bit smaller. I have had too many profitable trades reverse on me to worry about getting out too soon…as long as my winners are bigger than my losers and more often than the losers, then it’s all good:cool:
Clint I could not agree with you more!!! That is the nervous on a bad strike, getting anxious and wanted to get that back right now is the worst trading state ever.
Regards!
PS: It seems a great book, I�ll see if I can get it�
Would you recommend it?
Thanks!
but I would say that now i trade as a habit and there are times when I�m not 100% focus, as I used to be�