[natedredd10]

Originally Posted by BlowFish »

rxs005, there has been lots of good advice. One thing I did not see mentioned was your plan. I wonder if that is 'solid enough'? You should have built some sort of confidence through sim if you where doing it consistently. If your plan allows too much discretion it is hard to build confidence in it (the plan). You will tend to equate outcomes with your analytical abilities if the plan is not well defined.

To me another interesting aspect that traders can take from pro online poker players is learning more about sample size. If you look on the poker forums, people will post equity curves just like on trading forums. The huge difference though is you will see someone post having played 1500 hands and everyone will chime in that the sample size is simply too small to know if you are simply viewing variance itself.
The other end of this is that you can't really wait in a SIM to make 10,000 trades and get a good sample size, not to mention the market is a moving target so it won't mean much anyway by the time you are done.
Faith is super important because at some point you need an aspect to your mind of being a degen gambler who knows they are right and can push an edge but also disciplined enough to cut losers fast.

[FXGirl]

Hi, Natedredd10: You said, "Faith is super important..." I agree with you. Lack of faith in their system seems to be a big issue for many traders, and results in hesitating to get in, then once in a trade, getting out too soon. For those whose systems have a high win/loss ratio, developing faith can be relatively easy. For those with potentially profitable systems, but with win/loss ratios closer to 50-50, faith may be a hard won commodity.

Many traders have a personal rule that after losing so many pips on a given day (or percentage) or having so many losers in a row, they stop trading. Obviously, from a statistical point of view, this is a formula for ruining your win/loss ratio. Most traders stop because they are so emotional frayed at that point that they feel they can't, or shouldn't, continue trading.

My mentor taught me that if you have a losing trade, you must always take the next trade that meets your criteria. The market moves in cycles of trends and consolidation. If you stop trading, you miss the next payout cycle. But psychologically, if you don't take the next trade, you miss learning at a gut level that if you stick with it, your system does work.... and you can have faith in it. And at another level, you miss developing the psychological muscle to do the heavy lifting. In other words, you never develop an effective strategy to manage the strong emotions of trading.

Taking the next trade, and the next trade, and the next trade can be tough until you develop faith in your system. One of the best ways to do this is to reduce the overall size of your trades so that a series of losing trades doesn't trigger the same level of emotion distress. This makes it is easier to see it through to the payout cycle and, thus, easier to develop full confidence in your trading system. Once you have solid faith in your system, then increase your trade size gradually, a step at a time, until you are back up to your normal size. If you find that you start to do any of the things that indicate that you aren't trusting your system (hesitating to get in, getting out too soon, etc.), decrease the size of trades again for a while.

P.S. In all the above, I'm assuming that you do have a system that works: that you have backtested and know what the win/loss ratio is, and that you have clear criteria for entry, stop placement, and taking profit.

[JEHs]

Originally Posted by FXGirl »

One of the best ways to do this is to reduce the overall size of your trades so that a series of losing trades doesn't trigger the same level of emotion distress. This makes it is easier to see it through to the payout cycle and, thus, easier to develop full confidence in your trading system. Once you have solid faith in your system, then increase your trade size gradually, a step at a time, until you are back up to your normal size. If you find that you start to do any of the things that indicate that you aren't trusting your system (hesitating to get in, getting out too soon, etc.), decrease the size of trades again for a while..

There is always talk of reducing size, but for most of us who are learning, and, I would guess, many who are successful, they are only trading one or two contracts anyway.... I dunno...can't get any smaller than that...

[FXGirl]

Hi, JEH: Yes, if you can't reduce your lots or contracts, it makes it tough to try out this strategy. The only alternative is to go back to a demo for a while. Of course, you don't have the same emotional response as when there is real money on the line, but trading in a demo may still be a help.

[Gabe2004]

Originally Posted by JEHs »

There is always talk of reducing size, but for most of us who are learning, and, I would guess, many who are successful, they are only trading one or two contracts anyway.... I dunno...can't get any smaller than that...

Actually you can reduce your trading size.

Switch to ETFs that mimic the futures.
IWM for TF (1000 shares = 1 contract)
SPY for ES (500 shares = 1 contract)
USO for CL (2000 shares = 1 contract)
GLD for GC (1000 shares = 1 contract)

The above equates the size of the move in $ for the two instruments (shares vs contracts) in a given timeframe

If you trade only 100 shares in each ETF, commisions will take a large portion of your profits and can even cause you to end up with a loss compared with trading futures but this is a good way of training with live ammunition so to speak.

The only problem with switching to ETFs is that you need an account of at least 25,000$ because of the PTD (Pattern Day Trader) rule.

Gabe

[jaykay71]

Originally Posted by rxs0005 »

Hi

i need some advice i have been paper trading on a strategy i have had quite a decent success with about 76% wins


but i just cant seem to pull the trigger in the real market

what do i do


thanks for your advice

cheers

rxs0005

Sounds like your operating in a state of fear, we all know that successful trading is about eliminating emotion from your decision making.

You should try these links:

Mark Douglas August 2005

Mark Douglas June 2005

[symmetrics]

bottom line, JUST DO IT...

effectively your instinc is to not fail and protect- your heart says one thing your mind the other... THINK WITH YOUR HEAD NOT HEART. the lump in your throught goes away and you can focus on your plan. the entry comes up say aloud thats a GO ! and press that damn button... then your focus is on stops and levels for exit... hell you should be able to get up and walk around grab a coffee etc.. relax and let your system do the work... you must realize you cannot do anything you must allow the market to give to you or take ... good management and allocations will provide you with sound exits and entries

good luck

[FXGirl]

"we all know that successful trading is about eliminating emotion from your decision making." - JayKay71

There is no such thing as eliminating emotion from trading; there is only learning to deal with your emotions in a way that supports your trading goals.