Trading Psychology

[Trader Question]

Delighted I renewed my sub to the institute. The Mogs are excellent - well worth while, mind you it helps having some clarity to start with (which I think I do now). Actually the talking to self series where valuable - The early ones nudged me in the right direction with my trading plan (actually those could have been called less is more).

I have been trading the DAX with a simulator for a few months now (gave up losing real money ages ago) and am quite encouraged. I have decided to focus on the hourly using 2000 tick / 15 minute for entries. Daily and weekly give good context. DAX seems to dance to P&L's tune quite well (I know that should be the other way round but this is how it feels sometimes). This may sound like rather a close view but the DAX moves more in an hour than the S&P does in a day (maybe a week) and that seems to fit my trading personality.

OK time to come clean I have a small 3 minute chart in the corner of my screen too! it seems to help me finesse the entries though I may be deluding myself. Of course this can 'drag your focus down' too.

I'm pretty sold on the 'official' P&L stop method as I see time and time again a level tested from the other side after breaking - I do wonder if it will be quite so comfortable with real money on the line.

My last remaining problem (famous last words) is what I talked with you about almost 2 years ago! Closing good trades a few points into the green. (Tactic re fear loss and stops was an excellent response, thanks again.) I am no longer aware of any fear and am not quite aware of the emotional centre acting, it just nips in and closes the position without me 'knowing'. Funnily enough entering in sensible HTP/FTP areas there is nearly always a profitable reaction of a few points (LTP refresh or congestion, whatever ) regardless of whether the line breaks or holds. Coupled with the P&L stop strategy and it is possible to have a very high percentage 'winners'. I know a simulator is a completely different to for real but it does give an indication of what's possible.

I'm tempted to fit the plan to this quirk however as this is appears to be a flaw in my trading this would probably be a mistake. I think my problem is based in fear of 'failure' and despite examining my beliefs, relationships and aspirations I am not sure how to deal with this except by succeeding! Perhaps this leads to a desire to 'be right' on a trade though intellectually I know that this is not the case and actually damaging. I thought I had managed to adopt this as a fundamental belief ages ago but maybe my emotional centre does not know this?

Anyway I just made an appointment with a guy who is a sports coach / therapist / whatever. He used to work in the city in corporate finance and later in the "secondary market" seems to know a bit about traders. He is an NLP practitioner but I forgave him that as he seemed OK on the phone!

I must have another try with Epictetus, I found it a little hard to get into before.

Anyway any thoughts and observations are welcome.

N.A.

[pldot]

Thanks for this. Sounds like you are making good progress. Congrats.

The one thing that comes to mind in connection with the issue that you mention is the possibility of trading multiple contracts and taking off some soon after you get into profit (as you do now) but letting the rest run till you get to a target area. Some recommend trading three contracts: take off one a few ticks into profit, the next off at the first major target area, and letting the last run until the trade flow changes. Although this is not part of the P&L theory and ultimately when your skill level is high will not be as profitable as holding multiple contracts to the target, it does have the benefit of accommodating some of the psychological issues.

Epictetus will reward the time spent on his work but I do think the translation can make a big difference. I like the one by Sharon Lebell, which takes a few liberties but is very clear and powerful.