Mind Circus

Dear forum members,

I’m facing a situation in my trading and I’m looking for a solution. I’m sure the experienced traders will be able to understand the problem well. I’ll be grateful if some of you can give me some ideas on how to work out on this one.

Mind circus during live trading

I have worked with two systems for three months paper trading. I’ve my set of rules and then few fine stuffs that act as clues when to stay out. In short, I’ve knowledge plus a little experience of the systems. What happens is when I sit for live trading my mind plays a circus and it makes me doubt the setup or outright reject the setup. I call this as a circus because it is well orchestrated and it happens every day.

But then there also comes the add moment when I’m able to get out of the trap and get in the zone where I’m clearly seeing what is happening in the market. I want to be in a situation where by I can access that zone when I want and not at the mercy of my mind. I do have the feeling of how it is when I’m in the zone but it happens on very few occasions.

In past one year, I’ve also worked on my overall thinking process to clear out a lot of biases and emotional clog that I had held for a longtime in my life. After having released a lot of negativity out of mind I’ve been able to look at the price movement and it has helped me find more opportunities and get the clues and also at times the intuitive feeling about the market. But it is taking long time to translate the same thing in the real time environment.

I’m keen to work on myself so as to make trading effortless. I can understand the resistance I have inside and sometimes I can see myself clearly as two people inside me, One who knows about my system and method of trading and other who is creating doubt, anxiety and fear. I’ve developed this personal frustration as I can see that what I set out to do is out there but I’m not doing what I’m supposed to do.

I hope I have been able to convey m problem. I’ll be thankful to anyone who can suggest me how to go about this inner change that I need to do.

My friend, why don't you try trading smaller positions. Keep halving them until you feel comfortable. Your broker does not let you trade any small sizes? Find another one then. You gotta be the circus master, not the clown!!

Isn't time just too short to feel sick and tired all the time?

Hi buc..13,

I think what you have described is an effect - effect of the fear of lose.
Effect of the fact that you are not really -in true - willing to risk that amount of money on that trade.

1.You will find it helpful to drill in your mind the fact that you must risk something in order to gain.
2. Reduce your lot size to mini or even micro if needed in order that you will feel very comfortable with the amount you risk on a single trade.
3. Meditate on the fact that the outcome of a single trade is meaningless in the long run.
Hop this help

.... You gotta be the circus master, not the clown!!

LOL..

Eradicating negative thought processes is possibly one of the most health beneficial enterprises that any of us can do. It's something I've done but something so few people ever think of doing. Most people believe it's some kind of new age hocus pocus and wouldn't give it a moments credence.

Yet people will spend hundreds a year going to the gym or eating health foods. Why spend so much time on the body and so little, or nothing, on the mind? The mind is what makes us who we are and if yours is full of negativity and doubt, you will be living half the life that you could live. I just wish more people realised this and acted on it, the human race would be so much better off if they did. Kudos to you for having the gumption to recognise this and act on it, you're in a lucky minority.

As you are no doubt aware, a lot of the negative thought processes we harbour are a result of "back end" hardwiring, where your negative connotations from the past re-create similar feelings in the present. A lot of this occurs before the age of six and is largely governed by our upbringing. People might think that something so deeply engrained in our psyche would be near impossible to remove but actually, it's entirely feasible for anyone to re-wire themselves to totally turn around their metal approach to life - regardless of how "scarred" they are.

So it's of little surprise to find that your trading life will mirror your life more generally. Who hasn't struggled during their first, second....maybe even their third, fourth or fifth year into their trading life? Every time you lose money, particularly if the setup seemed sound, another negative seed of doubt gets planted into your cerebrum. It's these painful memories that begin to make you have clowns juggling and acrobatic routines gong on in your head.

So how do we kill the circus? Well, you go for the juggler, of course! The simplistic answer from most people will be to have a rigid system with defined stops and TPs. If you can really stick to it and it delivers profit overall, magic. I have two problems with that, though. Problem one being I don't believe that trading can be viewed in such a black and white way. I'm not absolutely sure that real progress can be made with such a rigid mindset. The human element for me is what makes me money. Understand when a good time to take profit is, when to close down a flat trade before it slopes off into a big loss or when to close a losing trade down before it hits my fixed stop to minimise the damage. I don't always get all of that right but I get it right enough that it gives me a bit of an edge.

So I think the only true answer is that you have to re-wire your thought process in trading - as you clearly have done in the other parts of your life - through your results. Whether that be lowering your risk to something small and very comfortable, going back to demo trading or my personal favourite, using a simulator, is up to you. But the key answer is to have enough unswerving faith in your own judgement that you no longer fear a loss on a winning trade, no longer get too greedy on a winning trade and no longer take a loss personally. You have to reach a point that you know that more often than not, you will serve your own self interests well and even when you get it wrong (which you will), that's just a part of the process and will not knock you off what you know to be the right track. You may just have to take a step or two backwards before you're able to take a big leap forwards.

That's one of the biggest factors in why trading is hard. It's not because reading charts is necessarily that difficult an exercie but it's the amount of time that it takes to build up sufficient confidence in your own abilities that you know you won't self-sabotage any more that is such a hard place to reach. A select few people have the discipline and mental fortitude to get to that place and they are the lucky people that go on to live a life on enviable luxury thanks to this seemingly simple endeavour.

Excellent thread and the very best of luck.

So how does anyone know the outcome of the next trade ?

You don't. You just know that one outcome is more probable than another because of your tested system / methodology.

All you know is that over a series of trades you will have losing trades & winning trades, and your system will/should produce a net positive outcome.

You cannot possibly trade on the outcome of a single trade at a time.
If you are doing this, then you are trading with money that you cannot afford to lose & have set yourself unrealistic profit targets for each trade.

Read Mark Douglas's Trading in the Zone, until it sinks in.

buccas 13


Placing market orders on short time frames = maximum stress


Placing pending orders on long time frames = minimum stress

buccas13
If you have doubt or fear, you do not trust your plan or yourself. Do you have backtesting data about your system? If not, get it. If so, make sure you have tested at least 100 occurrences - preferably 200-300.

Trade what you see, then walk away. Part of your fear and second guessing comes from the natural instinct to manipulate the trade and fear of loss. This is a biological reaction that can only be overcome by practice and confidence from your plan's backtesting data and repetition.

I have written many post and articles about this challenge, as have many others, and it all boils down to repetition. If I see this, then I do this - period. Just like stopping at a stop sign. This only comes from seeing and doing, seeing and doing - over and over again.

The circus you describe is you trying to impose your will on the market - ain't gonna happen. The other thing you must realize is that you will not be a consistent trader overnight. What expectations have you set for yourself? Are they realistic? Much of the anxiety comes from impatience.

Slow down, do the work and the money will take care of itself.

All the best.

dcginc

Was from CrucialPoint's post;

..and Demo trading Forever ... ZERO stress ... LOLZ

Trotty's post is a fine one. I'd add just a couple of things.
You get positive spirals of events and negative ones. A series of losses almost certainly leads to more losses - you cut off each successive win because you're want to recoup losses and so you never quite climb out the rut unless you stop, reassess and instil some discipline in your actions to get you out this cycle. Or worse your position size increases in a bid to get back to where you were to feel like you're moving forward. But in doing so, you're moving backward.

Just the act of recognising is often enough to stop it, and more importantly, get you moving on a positive cycle.

But if you still find yourself doubting your abilities and method, get back to working on some concrete rules. Price moves from range to range with a trend in between, it's as simple and difficult as that. When you start off, you're so bad at recognising range v trend, you need to let them ride for as long as possible to justify your bad entries. It's torturous, I know. But then as you get better, you can justify more entries, earlier TPs, more trades, more compounding. It all starts to hang together, but the first part is the toughest.

Anyway, it's a long weekend in the UK and I've a pint with my name on it.
GL

Ouch! I suppose i asked for that one.lol.

Trotty, very good post...

but i will argue with this one about taking care of your body,

from my experience it is extremely connected together, when you really try hard in gym and going for your targets it develops also your personality....

for example I go to gym regulary 4-5 times / week (while studying and working a lot), it takes a lot of discipline and hard work to do it consistently, another much harder stuff is food, you cant eat random food (also u have tostop with drinking etc).....especially this time when summer is coming and you want to get into good shape all is have to do is eat only : rice, chicken meat, tuna, eggs and few other things, you are nervous and you cant be focused because of lack carbohydrates......imagine going out with friends for barbecue and all you drink is mineral water and eat dry chicken......so its really a good test of discipline which is essential for trading

in statistics,

100 trades is nothing, 200-300 still not enough, i had systematic approach i was demo testing which had quite good results after 200 trades and in the end it just came back to BE and started losing

Lets take that 200 trade sample size.These 200 trades could mean different things to different traders.For example take two traders:

Trader A trades off 1 min charts @ ave 10 trades/day.

Trader B trades of daily charts @ ave 10 trades/year.

Which one of the traders should be more confident in the results of his test,bearing in mind the purpose of the test is to take account of as many market conditions as possible?

They are both in the same situation. The important thing here is the sample size, not the timespan.

Really?Are you sure?I think you need to think carefully about what you just said.

i see your point,

but who trade 10 trades/year?? its not trading but investing....and i dont see a much advantage there....you can have a year with really bad series of losess, what you gonna say to your investors??

anyway why to waste so much time in such a big way and trade 10 years for 100 trades and not be able to judge the profitability at all.....because 100 trades is nothing in statistics even the markets conditions were changing - because they are changing always and there is nothing like - we went trough the all possible market cycles

But they both have (trader A and trader B) the same 200 trades sample. What I'm saying is "time" is not relevant when it comes to mathematical expectancy.

Following your previous example, if we assume that both traders are using a system which produces a positive expectancy, both traders will profit in the long term, the only difference being that trader A will get there much faster than trader B. Same thing if they lose, trader A will learn his system doesn't have any edge in a couple of months maybe, while trader B will have to wait years to realize his system doesn't work, but in the end they will both reach the same conclusion.

It sounds like you don't have enough confidence in your system. Maybe you can manually back test your method and document your trades. When you have taken 100's of trades over and over and you can see it winning (if you have a positive expectancy) you'll have more confidence when you trade live because you have seen it work over and over and over again. There is a big difference between 'thinking' it works and 'KNOWING' it works.

This is a starting point only. There is a lot more to the journey but you need to get over this hump first, if I understand your post correctly.