Struggle with trading mindset | Forex Factory

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Struggle with trading mindset

  • #1
  • First Post: Jul 16, 2012 7:47am Jul 16, 2012 7:47am
Hey guys,

I've established a system that is based on support and resistance levels. Here is a problem that I tend to encounter. I have no problems dealing with losing trades. Occasionally, price tend to go against me for a while before heading in the direction of my trade. I have no problem with this, and I have no problem if it hits my stops that I place strategically.

The problem I encounter is when the trade becomes profitable. When the trade is in the money, my mind becomes f*cked up! It starts to haunt me. It terrorizes me! I have to close the trade to lock in the profit the moment I'm 10 or 20 pips in the money. Usually, my target is above 40 pips in the money, and most of the time after hours, price does reach my profit target without approaching my stops at all! This is seriously affecting my R:R and in the long term, how profitable I will be!

It is a constant struggle and after more than a year of trading, I still cannot come to terms with. I need help guys! Is there any way I can "train" my mind to accept the fact that I'm making a right decision? It's weird, I have no problems crashing down a steep rocky slope on a bicycle, yet it irks me to see the market fluctuating when my trade is in profit.
  • #2
  • Jul 16, 2012 8:48am Jul 16, 2012 8:48am
You should try partially close profit, when price goes 15 pips in profit close half or 1/3, then you will easier let other part run to your target.
  • #3
  • Jul 16, 2012 9:16am Jul 16, 2012 9:16am
You have to control yourself that is very important... Emotions will ruin you.... About the profitable trades... what i do... is that once i have set my profit target i let the market do it`s thing... if it reaches halfway between my profit target and entry i will move my stop on the entry... you want to trail it but not to close thou cuz you will be stopped out.. and in case it turns against you, you don`t leave nothing on the table and get out even without a loss...once it passes the halfway point i will move it on the halfway line (between entry and profit target) so that i will secure half the profit in case it turns against me and never reaches my target... one thing is that since you use support and resistance levels try to use THEM for trailing your stops..and don`t get into a hurry with the trailing ...be patient..let the market do it`s thing..GO ALONG WITH IT...
DanielTTC
  • #4
  • Jul 16, 2012 9:22am Jul 16, 2012 9:22am
I have 2 suggestions...

1. Try some breathing exercises when you can feel the anxiety rising.... if fear is pumping through your veins you wont make the right decision... theres a webinar on it somewhere... i will find you the link.

2. Do what I do... walk away for a set period of time, go to the shops, have a shower... remove yourself from the screen...

Good luck... sounds like you're on the last stage anyway...
tradewith60
  • #5
  • Jul 16, 2012 9:36am Jul 16, 2012 9:36am
Quoting sargedessy
Hey guys,

I've established a system that is based on support and resistance levels. Here is a problem that I tend to encounter. I have no problems dealing with losing trades. Occasionally, price tend to go against me for a while before heading in the direction of my trade. I have no problem with this, and I have no problem if it hits my stops that I place strategically.

The problem I encounter is when the trade becomes profitable. When the trade is in the money, my mind becomes f*cked up! It starts to haunt me. It terrorizes me! I have to close...
This:

For example, your SL is 20 pips, your TP is 40 pips. When price reaches 20 pips in profit, take 1/2 of your position, move SL to Break-Even for the rest and go elsewhere.
  • #6
  • Jul 16, 2012 9:43am Jul 16, 2012 9:43am
Thanks for the suggestion guys. I guess this is a problem that I eventually will have to face. I believe closing half of my position while letting the rest run would aid in conditioning my mind to have more confidence in my trading plan.

I've found a good article posted by hagadol. This is the link to his thread:
http://www.forexfactory.com/showthread.php?t=5390
  • #7
  • Jul 16, 2012 9:57am Jul 16, 2012 9:57am
http://thedisciplinedtrader.com/oneminute/#one
tradewith60
  • #8
  • Jul 16, 2012 10:43pm Jul 16, 2012 10:43pm
"You've got to know when to hold'em, know when to fold'em, know when to walk away know when to run." ~ Kenny Rogers

It looks like you don't have an Exit strategy set in place.

 

  1. If you don't know when to exit, you will cut your winning trades early.
  2. If you exit early and you didn't follow your trading exit... then discipline is the issue.

There is no try, you either do or don't. If you have an exit plan, you have 2 choices; do it or don't.

Don't focus on the outcome. Detach yourself from the outcome. Focus on sticking to your plan and things will go on their own accord effortlessly. If you focus on the money, you'll do silly things. If you focus on executing your plans, the money will come to you effortlessly.

  • #9
  • Jul 17, 2012 12:10am Jul 17, 2012 12:10am
Personally believe there are two hard things in trading, cutting your losses and letting your profits run. You must go against human nature in your trading if you intent to let profits ride or ride trends.
For example if you lose your wallet or keys you say to yourself it will come back, if you find a ten dollar bill your instant thought is to pick it up. . .guess what this also transfers to our trading. You'll always want to take profit sooner as it could vanish if you wait longer, you will also feel like letting your loss ride longer because you know that it will return back to you as your keys did.
What helped me was an article I read way back about stress free trading, it talked about letting your profit run by simply moving your stops to breaking even and clossing losses short in case the trade goes against you.
It works for me till this day.
  • #10
  • Jul 17, 2012 1:29am Jul 17, 2012 1:29am
Hi sargedessy,

Your problem sounds very much like something I faced in my earlier days. I couldn't stand watching open profits disappear, I always wanted to ring the register even though the accepted wisdom is cut losers and run winners. I dealt with this in the following ways:

1) Use a mechanical trailing stop. It's a reasonably effective solution but I don't personally use it any more, it just doesn't suit my psyche

2) Use a fixed profit target and look to move the stop up to breakeven pretty quickly so as to create a free trade that will either scratch out or make a nice profit, but no loss is possible. The cost is lots of scratches that then go on to make huge profits without you but not having losers is way more important to me so I'm happy with this and use this method routinely now.

3) Try a set-and-forget style. Once the stop is up to breakeven and the exit mechanism in place, turn off the machine and accept the outcome. I don't do this, I prefer watching and learning each time but it is effective if you are just too edgy.

4) Trade a shorter term momentum style that inherently has sharper, straighter moves than a longer term trend following method that just has to ride through major fluctuations to be successful. I moved gradually to become strictly a day trader using momentum in conjunction with support and resistance and it suits me extremely comfortably

5) Don't worry about only taking a small bite out of a big move. If your stop loss strategy is sound and you effectively control risk the consistent smaller profits will be more than enough. As you become a better and better trader you can work on taking bigger chunks out of moves from a position of comfort.

6) Reduce your profit target so your exit gets hit more regularly with less fluctuation. It means you'll have to tighten your stop and sharpen up your entry technique, but if your method permits this it will work well. This is my standard style and I am cosistently profitable with it.

The most important thing is to adjust your trading style so it fits in with your psyche. Don't beat yourself up for being who you are. Work with it and adjust your trading so you are doing something you feel inherently comfortable with. There are an infinite number of ways to trade, just ensure what you do suits you and you'll have few problems - especially if you are OK with stop losses. Most people aren't and ignoring them is the #1 route to disaster. Solid risk control and a method that suits you. Good luck!
  • #11
  • Jul 17, 2012 2:00am Jul 17, 2012 2:00am
I got this problem too, but then i was trying to do

1. set break-even+1 when flow profit reach 20
2. shut down my computer or platform
  • #12
  • Jul 17, 2012 3:05am Jul 17, 2012 3:05am
Quoting sargedessy
Hey guys,

I've established a system that is based on support and resistance levels. Here is a problem that I tend to encounter. I have no problems dealing with losing trades. Occasionally, price tend to go against me for a while before heading in the direction of my trade. I have no problem with this, and I have no problem if it hits my stops that I place strategically.

The problem I encounter is when the trade becomes profitable. When the trade is in the money, my mind becomes f*cked up! It starts to haunt me. It terrorizes me! I have to close...
It's a common problem that everyone face... So don't be too hard on yourself. What you can try...

1. Have a fixed method of taking profit, based on clear rules. For example, take profit in M5 TF when it hits major support or resistance. I prefer to take profit when I am certain of a M5 reversal. Although I may lose some of my profits while waiting for the reversal candle, I can be certain that I will ride my profit for a bit longer.

2. STOP WORRYING about what happens to your trade after you take profit. Be grateful for the profit, no matter how big or small, and stop thinking about the potential profit. If you continue to regret the potential profits that you could have made, you WILL live in misery. You will never be able to run the full course of the move, so accept it and embrace it.
  • #13
  • Jul 17, 2012 4:28am Jul 17, 2012 4:28am
Hey guys thanks for the suggestions and insight. I guess the discipline part of trading is not easy to instill. I'll keep your advice in mind!
  • #14
  • Aug 15, 2012 7:30am Aug 15, 2012 7:30am
Quoting marcmarc
Hi sargedessy,


The most important thing is to adjust your trading style so it fits in with your psyche. Don't beat yourself up for being who you are. Work with it and adjust your trading so you are doing something you feel inherently comfortable with. There are an infinite number of ways to trade, just ensure what you do suits you and you'll have few problems - especially if you are OK with stop losses. Most people aren't and ignoring them is the #1 route to disaster. Solid risk control and a method that suits you. Good luck!

I have been on a very similar path as you and have arrived at the same conclusions. When you read a response like this there is no doubt that you have paid your dues to become successful at trading. More than anything I found learning to trade to be a sometimes painful but very rewarding journey of self discovery. The best part is that what you learn can have valuable application in all aspects of life.
  • #15
  • Aug 15, 2012 8:22am Aug 15, 2012 8:22am
Quoting sargedessy
Hey guys,

I've established a system that is based on support and resistance levels. Here is a problem that I tend to encounter. I have no problems dealing with losing trades. Occasionally, price tend to go against me for a while before heading in the direction of my trade. I have no problem with this, and I have no problem if it hits my stops that I place strategically.

The problem I encounter is when the trade becomes profitable. When the trade is in the money, my mind becomes f*cked up! It starts to haunt me. It terrorizes me! I have to close...
try this, use a EA or program like Myfx to trail.

take off partial profits, 25/50/75 %, set entry to BE.

DONE. Now that u had pocketed some, closed off the terminal and go out to have fun or go to sleep.
  • #16
  • Aug 15, 2012 8:27am Aug 15, 2012 8:27am
Quoting sargedessy
Hey guys,

I've established a system that is based on support and resistance levels. Here is a problem that I tend to encounter. I have no problems dealing with losing trades. Occasionally, price tend to go against me for a while before heading in the direction of my trade. I have no problem with this, and I have no problem if it hits my stops that I place strategically.

The problem I encounter is when the trade becomes profitable. When the trade is in the money, my mind becomes f*cked up! It starts to haunt me. It terrorizes me! I have to close...
Problems such as this arise when you are emotionally attached to the outcome of every single trade. Maybe your entries are based on prediction/anticipation, which makes matters even worse. Or that you think that the outcome of a trade is about whether you were right or wrong.

The problem dissolves into thin air when you realise that
1) you can't predict the market,
2) trading is a game of probabilites, and you don't need to win on every trade to come out ahead in the long run.

So the state of mind you need to get to is one where you more or less don't care whether the trade entered ends up a loser or winner. Which requires the confidence that you have an edge, and that if you follow your rules for entry and trade management, you will be a winner long-term.

Individual trades don't matter. They're like London buses - if one is a loser, soon another one will come around the corner.
  • #17
  • Aug 15, 2012 9:25am Aug 15, 2012 9:25am
Agreed, just a different spin:

Trading s/r w/o explicit understanding of how price action works around s/r, needs gut to describe pa around s/r.
S/r is very simple, and thus, while reliable, is also necessarily with a high risk:reward compared to more accurate and complex line drawing.
Thus, one must accept a higher randomness with the naturally relative nature of one's gut as applied to the fact of the s/r's drawn.
  • #18
  • Last Post: Aug 15, 2012 10:35am Aug 15, 2012 10:35am
Quoting ha-pattern
Agreed, just a different spin:

Trading s/r w/o explicit understanding of how price action works around s/r, needs gut to describe pa around s/r.
S/r is very simple, and thus, while reliable, is also necessarily with a high risk:reward compared to more accurate and complex line drawing.
Thus, one must accept a higher randomness with the naturally relative nature of one's gut as applied to the fact of the s/r's drawn.
Agreed. I'd summarise that by saying that while S/R trading seems simple, it actually requires more market understanding than most approaches to trading.
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