I know I have had trouble remaining positive and unemotional the past few weeks as well as being disciplined.
On top of your ideas for the webinar, my question would be, how can a new trader have confidence when they have never made money? How do I know this can really work? I know other people can make money, but how can I build confidence in myself when I have never made decent money. And I definetly have a problem trading not to lose, instead of trading to win. How can I stop that? Most days, I am just happy to get back to even. I never have the confidence to get over the hurdle called "fear of losing". Today, I was up $133 by lunch, and I was done. I was too afraid of giving it back to the market.
Also, my brain tells me to do the opposite of what i should be doing. My intuition tells me to buy into the strength instead of selling into it, when I should have been buying the weakness that was before the strength. Then I am long at the top and the strength (pop) just disappears and the stock drops. Does that make sense? Because it is really hard for me to flip such strong beliefs and feelings.
On top of your ideas for the webinar, my question would be, how can a new trader have confidence when they have never made money? How do I know this can really work? I know other people can make money, but how can I build confidence in myself when I have never made decent money. And I definetly have a problem trading not to lose, instead of trading to win. How can I stop that? Most days, I am just happy to get back to even. I never have the confidence to get over the hurdle called "fear of losing". Today, I was up $133 by lunch, and I was done. I was too afraid of giving it back to the market.
Also, my brain tells me to do the opposite of what i should be doing. My intuition tells me to buy into the strength instead of selling into it, when I should have been buying the weakness that was before the strength. Then I am long at the top and the strength (pop) just disappears and the stock drops. Does that make sense? Because it is really hard for me to flip such strong beliefs and feelings.
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First of all, you are not in a unique position. Most of us have been there. The odds are stacked against the new trader. You have to go against seasoned pros that have lived through the ups and downs and emotional turmoil right from the start. It's a tough business.
" How do I know this can really work? The markets can actually pay you nicely once you can get you mind around how it works. How many times have you only been looking at a play but not actually trading and have seen a great opportunity that did go the way that you thought it would? Many times I would guess. And if you look back at the days you can see the telltale signs of dojis, candles and volume that indicated an opportunity was coming. So if the markets provide the information and you don't take advantage of it, then what you need to happen is to have a fundamental shift in your thinking.
1. Start by looking back at when you saw your very first chart. If you were like me, you were absolutely clueless as to what all those lines and numbers meant. Now think to the present day and how much more you know. Congratulate yourself on applying yourself and learning. See the tiniest step of progress as another step in the right direction to the destination of becoming a successful trader.
2.Confidence in yourself can come in several forms. If you can follow your trading plan without deviation, it will give you confidence. If you can focus your mind on only the task at hand without being distracted, it will give you confidence. If you can cut your losers quickly, it will give you confidence. If you can build a couple of winning trades today, it will give you confidence for tomorrow.
3. Trading to win and not to lose is a change you must make. A winners mindset allows them to focus on the probabilities of the future instead of the problems of the past. The only time you should think about the past is when you take a cold blooded look at the trades you did, critique them and learn from the mistakes. How can you stop doing it? Well this issue goes to your core as a trader. You must believe in yourself, your plan, your ability. This comes about by acknowledging the small victories. You can build on this base one trade at a time. Maybe you are trading with money that you can't afford to lose. If that's the case I would recommend that you stop trading while you build up your account and work on your edge and your emotional components that will in the future led you to be a winner. The market will wait for you.
4. Ask yourself the following questions and answer as truthfully as you can: Am I afraid of losing money? Why? Am I afraid of being wrong? Why? Do I stick to my plan? If not, why not? Do I have a edge? If not ,why not?
These will all work together to either make or break you. When you do develop an edge that works for you and you have a trading plan in place to take advantage of the opportunities that come your way, then trading will become as easy as it looked before your mind got sidetracked.
Making the mental shift from negative to positive requires first your goal to change into a successful trader, then the will to carry it through, then the plan to make it happen, then your skill to put it into practice. You need all these steps.
Nobody is different from anybody else in that we are all born with the same body and mind. Life experiences colour your ideas but in the end we all have free will to decide what we want to do. If we are not happy where we are then we must decide to change our situation for our betterment. You can decide to change. You can carry through with those ideas. It takes hard work. If you stumble and fall, you must want to dust yourself off and try again. Focus on the areas that you want to change. Think about how best to go about it. Put your new plan into action.
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3 comments:
excellent. thank you for the response. i am going to have to sit down and take some time to go over the suggestions and advice.
Joshua, at some point you just have to go for it and not be afraid to lose. Work on your plan through a paper trading account that is as "real time" as you can find until you decide to go for it.
This market has been extremely tough to put on a trade and not get stopped out quickly. When you're buying into a break out you might want to examine the 3 bar patterns and 3 push pattern. I've noticed since the selling stopped in March that a lot of "breakouts" are only good for 3 bars. 5min charts, 15min charts, almost never on the hourly chart. There's a serious lack of "continuation" once a pattern develops. This market is no where near the level of enthusiasm we had in 2008. You could be late on the trade, jump in and hang on, and still come out ahead. Reasonable stops are being gunned to death in this market and that's helping to creat a lot of the choppy conditions.
3 bar reversal pattern:
http://thepatternsite.com/ThreeWhiteSoldiers.html
3 push pattern:
http://blog.afraidtotrade.com/the-dual-three-push-reversal-patterns-in-the-spy/
Do a search on "3 push pattern" on Cory's site and go a few pages in and he gives multiple examples of it with excellent explanation. The 3 push requires a day long trend to work properly or multiday trend on longer time frames. We're getting maybe 1 trend day a week on the major indexes if that.
Blue,
Thanks for the help. I think for the past months, I have been trying to learn the market,orders, yadda yadda. Now, I need to push and not be afraid to lose. My problem is a classic one. I skip a trade and then it works so I take the next and it doesn't work, over and over. Like today, I easily should have had TM, ADS, and RL. And they were huge movers. It makes me crazy knowing I had those stocks on my radar but did nothing about it. Then later in the day, I try to catch RL short, and I get eatin up. After Scott said "how many times have you seen a stock go the way you want" I realized it is right in front of my face. I see it happen all day long. There is no reason why it is not me making money on those moves. I think I am all over the place and just need to focus. Maybe I need to stop looking or searching for a trade, and let the trade come to me. Concentrate on a few stocks, and trade them like a champ. Lets see what happens. I have been very positive every morning this past week believing that I would trade everything properly and make money. When I see money being made everyday, there is no reason why it is not in my pocket. These past few weeks I have watched all the great moves instead of being positioned in them. I need to focus so that I have a piece of the move.
And no paper trading for me. I don't pay attention when it isn't my money on the line. As unfortunate as it is, I need to lose my money in order to learn the lessons.
Tomorrow is my day.
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