Learn How To Fish
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Good post by Teaja Khoday..CEO FYRES...mostly these points am following
Some ideas to develop trading discipline according to me:
Some ideas to develop trading discipline according to me:
- Withdraw your profits every week & let your capital remain for future trades. This will help you recognize the importance of booking your profits. For example, let's say you make a profit on a few trades and end up net positive for the week. You withdraw those profits and buy something with it. By doing so, you will actually realize the fruits of your labor. If you let the profits remain in the trading account, you will feel like risking it for future trades as it provides a layer of cushion against your capital. More often than note (unless you're experienced), you will squander away booked profits by booking losses in future trades. However, if you withdraw some profits, you will be eager to do it again and thus trade carefully.
- Record your daily performance. Objectifying your performance on a day to day basis helps to stay on track. Otherwise, it's very easy to wreck your own plans the minute you get excited or afraid while trading! A plan is not necessary but recording your daily performance in terms of P&L, No. of Trades, Views, Tomorrow's expectations is very helpful IMO.
Good post by Xray.....IMO we all going or gone through this FEAR pace
Joe Ross Explains
Fearing Losses
There is a huge difference between being risk averse and fearing losses. You must hate to lose. In fact, you can program your brain to find ways to not lose. But not losing is a logical thought-out process, rather than an emotion-based reaction.Two human -based tendencies come into play. The first is the sunk-cost fallacy and the second is the exaggerated-loss syndrome.
Sunk-cost fallacy: You are in a trade that begins to go against you. You reason that you have already spent a commission, so you have costs to make up for. Moreover, you have spent time and effort researching and planning this trade. You reckon that time and effort as cost. You have waited for just such an opportunity and you are afraid that now that it has come you will have to miss this trade. The time spent waiting for opportunity is something you also count as cost. You don't want to waste all these costs, so you decide to give the trade a little more room By the time you realize what you’ve done, the pain is almost overwhelming. Finally, you have to take your loss which is now much larger than it might have been. The size of the loss adds to your fear of ever losing again. The end result is brain lock and inability to pull the trigger on a trade
Exaggerated-loss syndrome: You give the importance of losing on a trade two to three times the weight of winning on a trade. In your mind, losses have greater significance than wins. In reality, neither is more or less important than the other. In fact, wins do not have to be as numerous as losses as long as the wins are significantly larger in size than the losses. Of course, best is to have more wins than losses with the wins greater in size than the losses
IMO ,Sticking to the system to its core solves this problem combo of intra+swing providing enormous advantage
Joe Ross Explains
Fearing Losses
There is a huge difference between being risk averse and fearing losses. You must hate to lose. In fact, you can program your brain to find ways to not lose. But not losing is a logical thought-out process, rather than an emotion-based reaction.Two human -based tendencies come into play. The first is the sunk-cost fallacy and the second is the exaggerated-loss syndrome.
Sunk-cost fallacy: You are in a trade that begins to go against you. You reason that you have already spent a commission, so you have costs to make up for. Moreover, you have spent time and effort researching and planning this trade. You reckon that time and effort as cost. You have waited for just such an opportunity and you are afraid that now that it has come you will have to miss this trade. The time spent waiting for opportunity is something you also count as cost. You don't want to waste all these costs, so you decide to give the trade a little more room By the time you realize what you’ve done, the pain is almost overwhelming. Finally, you have to take your loss which is now much larger than it might have been. The size of the loss adds to your fear of ever losing again. The end result is brain lock and inability to pull the trigger on a trade
Exaggerated-loss syndrome: You give the importance of losing on a trade two to three times the weight of winning on a trade. In your mind, losses have greater significance than wins. In reality, neither is more or less important than the other. In fact, wins do not have to be as numerous as losses as long as the wins are significantly larger in size than the losses. Of course, best is to have more wins than losses with the wins greater in size than the losses
IMO ,Sticking to the system to its core solves this problem combo of intra+swing providing enormous advantage
from TraceBullet,,,,,
There is no black and white approach to patterns. You can do everything right and yet be wrong in a trade. Your small edge will play out over large sample of trades. So say take 100/more trades and your wins might be more than your losses. That's how the market works. No one knows what will happen next with 100% certainty.
There is no black and white approach to patterns. You can do everything right and yet be wrong in a trade. Your small edge will play out over large sample of trades. So say take 100/more trades and your wins might be more than your losses. That's how the market works. No one knows what will happen next with 100% certainty.
Good post by ncube.....
Its important to understand that Trading capital & Risk Capital are not same, Risk capital is the max drawdown amount that one is ready/comfortable to lose on a trading system before concluding trading system is not working or trading is not for him.
The suggested 50L for full time trading is the trading capital and it dependents on how much one needs to generate as returns comfortably without taking much stress. For example if one needs to generate 10L per year as returns and if only 5L is the trading capital then he needs to generate 200% returns consistently on 5L ending up taking unrealistic risks and easily blowing up his account unless he is among the top 0.001 % of profitable traders as mentioned by ST da in one of the posts. However with 50L as trading capital one just need to generate 20% returns which is quite feasible.
During wealth building stage if the trading capital size is less than 10L, one can conservatively target 25-50% returns but once it goes above 10L its better to start diversifying/use higher time frames and attempt for returns in the range of 25%. The thumb rule I follow is that if the system backtesting result gives me a return of 100% then in real trading my expectation is only 1/4th i.e 25%, and any additional returns is an added bonus. Having a lower expectation will have a positive psychological effect on our mind and we can trade with more confidence.
Its important to understand that Trading capital & Risk Capital are not same, Risk capital is the max drawdown amount that one is ready/comfortable to lose on a trading system before concluding trading system is not working or trading is not for him.
The suggested 50L for full time trading is the trading capital and it dependents on how much one needs to generate as returns comfortably without taking much stress. For example if one needs to generate 10L per year as returns and if only 5L is the trading capital then he needs to generate 200% returns consistently on 5L ending up taking unrealistic risks and easily blowing up his account unless he is among the top 0.001 % of profitable traders as mentioned by ST da in one of the posts. However with 50L as trading capital one just need to generate 20% returns which is quite feasible.
During wealth building stage if the trading capital size is less than 10L, one can conservatively target 25-50% returns but once it goes above 10L its better to start diversifying/use higher time frames and attempt for returns in the range of 25%. The thumb rule I follow is that if the system backtesting result gives me a return of 100% then in real trading my expectation is only 1/4th i.e 25%, and any additional returns is an added bonus. Having a lower expectation will have a positive psychological effect on our mind and we can trade with more confidence.
One old post by Xray....
Patience is not about doing nothing. It’s about doing the right thing at the right time. And that is exactly what traders need to succeed.Most traders have a strategy they follow that tells them when and where to get into a trade. That strategy, if traded correctly, should yield a profit...otherwise why are you using it? Sounds simple, but traders face a problem: when watching a fast moving chart in real-time the mind gets tricked into thinking you should get into a trade before the trade setup has fully formed. You don't want to miss a trade, so you get in a bit early and end up with a loss (usually).
Wait for the setup to fully form and trigger your trade (a trigger is a precise event that tells you NOW is the time to act). Be OK with missing a trade. If you're trying to profit from every price move, how is that working for you? Only take trades that give you a complete setup and trigger your trade. No trades occur unless the market triggers it.
If you're following your strategy and are still getting in a bit too early, have a psychological drill before jumping in ...
Patience is not about doing nothing. It’s about doing the right thing at the right time. And that is exactly what traders need to succeed.Most traders have a strategy they follow that tells them when and where to get into a trade. That strategy, if traded correctly, should yield a profit...otherwise why are you using it? Sounds simple, but traders face a problem: when watching a fast moving chart in real-time the mind gets tricked into thinking you should get into a trade before the trade setup has fully formed. You don't want to miss a trade, so you get in a bit early and end up with a loss (usually).
Wait for the setup to fully form and trigger your trade (a trigger is a precise event that tells you NOW is the time to act). Be OK with missing a trade. If you're trying to profit from every price move, how is that working for you? Only take trades that give you a complete setup and trigger your trade. No trades occur unless the market triggers it.
If you're following your strategy and are still getting in a bit too early, have a psychological drill before jumping in ...
Another post from Xray bro...
Every traders wants to earn ,but stock market is zero sum game,traders are two types discretionary and systematic traders ,discretionary will almost have problem with trade size scaling,provided he is expert in his discretionary skills,other wise he will end in blowout ,systematic traders needs to follow his system like slave ,he should remember that your system dictates your actions, not your emotions or desires.
Systematic trader have to face deadly DD phase,his MM should be FRMM in case of Fut and FFMM in case of cash market ,have to follow his system irrespective of DD and mechanics to keep DD under tolerable limit is the most key factor for this..
Every traders wants to earn ,but stock market is zero sum game,traders are two types discretionary and systematic traders ,discretionary will almost have problem with trade size scaling,provided he is expert in his discretionary skills,other wise he will end in blowout ,systematic traders needs to follow his system like slave ,he should remember that your system dictates your actions, not your emotions or desires.
Systematic trader have to face deadly DD phase,his MM should be FRMM in case of Fut and FFMM in case of cash market ,have to follow his system irrespective of DD and mechanics to keep DD under tolerable limit is the most key factor for this..
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