You're Got a Trading System...So Why Are You Losing?

You�ve done your homework.

Countless hours of seeking out the right guru (or piecing together your own system). Weeks of monitoring your guru�s daily trade picks (or paper-trading and back-testing your homemade system). You�ve done it by the book.

No seat of the pants trading for you!

OK, now you�re confident. It�s time to put your money where your homework is.

You�ve had your coffee and your first trade signal is before you.

Confidence high. Trade made. First loss. Not a problem.

You understood before you started that successful traders both win and lose and �losing is part of the overall winning�. You�ve also heard more then once that �successful traders don�t win on every trade.�

Moving on, still confident. Next trade made. Another loss, but�

This one hurt your pride a little because you got stopped out early in the trade, and then the market rebounded and would have hit your profit target if you weren�t stopped out.

You double check.

Yep, you placed the stop where your trading system told you to place it.
You kind of had a feeling that the early weakness in the market was just profit-taking from the previous day�s trading, but you�re trading a system and you must stick to it. Wounded, but resilient.

After a good night�s sleep and a few mouse clicks, your new daily trades are in front of you.

Hey, this one looks good! It�s a little bit more risk than yesterday�s trades had, but look at that profit potential!

With a smiling face, the trade is executed. With a nice start to the trade, you�re feeling good and you�ve moved your stop to breakeven, just like your system said.

Surprise piece of news! � market reverses � blows through your stop � an �unexpected� loss.

Is something wrong with the system?

Has the overall market �personality� changed, affecting your system to the Core, rendering all your back-testing irrelevant?

Your confidence turns to doubt.

You decide to �watch� the next trade� I mean, isn�t it wise to make sure the system gets back on track before you �throw good money after bad?�

Isn�t that what a conservative trader does?

Trade watched. It wins!

In your head, you beat yourself up a little because you know that when you started your �live� trading, you made an agreement with yourself to take the first 10 trades �no matter what�� and here you wimped-out and missed a big winner that would have gotten you even.

What�s happening?!!

What�s happening is that you are out of control. Your emotions are ruling your trading.

The above scenario plays out in every trader from time to time… newbee and veteran alike.

The winning trader senses what is happening and nips it in the bud. The winning trader spend time EVERY DAY, working on �the discipline of trading�.
He/she reads a chapter in his/her favorite psychological trading book, scans the �ten commandments of trading� that hangs on the wall over his/her desk, listens to his/her mental training software for traders�

Something� Every Day� before trading begins.

There are many more losing traders than winning traders� and it�s seldom about the trading system.

In my career, I�ve come across at least 50 systems that I consider A+, yet I know, for a fact, that MOST traders that have traded these systems have lost.

Why?

They were not in control of their emotions.

Are you?

your emotions are nothing to underestimate!! Great post!! Can you recommend a good read about psychological trading ??
Thanks

I recommend books from Mark Douglas and Van Tharp.

i would also recommend Emotion Free Trading by Larry Levin

happygilmore,

Good post, good thread.

Ari kiev has wrote some great trading books about trading psychology.

This thread is 4 years old.

lol, boosting that post count.

Still the OP contains some wise words.
I feel that this thread applies all to much to me at the moment. :15:

I could care less about my post count bud. It just annoys me when people bring up threads from several years ago.

not you sigh… the guy who added 4 year late reply. I’ll keep my jokes to myself in future :wink:

go read the book, its very long though…

Oh haha, my bad. :stuck_out_tongue:

You know what Clark, if you wouldn’t have posted I wouldn’t have noticed, here we are necromongering again, hehehe. Hey mods, why not delete some of this old stuff???

The Ever Furyan VIPER

Actually finding some of the old stuff prevents the creation of yet another thread of the same stuff…reduce, reuse, recyle :wink:

Psychology is overrated

if psychology was the holy grail Black box systems would have an edge

the only robots i know of that actually achieve good results are the HFT that big institutions use

I read some very insightful posts from long ago.There was one here from long ago, a sure fire method from a book they tried out.This thread went on for months with highs and lows and then crashing and burning.The method and the traders ego,s was a interesting read.I was going to bring up thread months a go, but didnt want to open up some old wounds!The only thing that cracks me up is when they are asking questions of a 4 year old post.

Good post :slight_smile: