How do fellow Traders deal with the pain of missing out on good Trades?

General
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Ofcourse, one would miss out on a million good trades every session. I am not talking about those. You know what I am talking about, those trades you contemplated on, felt it in your bones, were just about to enter. But then stared at the screen, had a brainfreeze, and let it go. Checking back a while later, and disappointment is staring at you with a smile :slight_smile:

Then you do the same gestures that Batsmen do when they get out. That air-waving of the bat as to how that shot should have been played. But by then its too late and you’re walking back to pavillion and trying not to kick something on your way.

Its been years of this, and it is still not going away. Kya Karun ?

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understand risk and reward.

if you miss this trade you will miss out on the maximum profit you make and also if you take that trade max loss you make .

Then,
if max loss wont hurt you, take that trade else don’t bother about profit that trade made.

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Biggest challenge of markets is emotional, even once you have an edge. And emotions can interfere even with finding an edge as biases get in the way.

Intraday trading with discretion probably has the biggest impact on emotions. Markets are running live, and money matters messes up the brain.

Any trade that you did not take was not a trade. If a trade failed you cannot go back and feel good that you missed it and if it did well you cannot start regretting. There is no end to this and FOMO is not an edge.

I think pure discretion is incredibly hard to do, and do not consider it to be worth it. Obv someone may disagree.
But discretion does matter - whether in system design or as part of the system.

This is what helped me -

Test the market data. I dont mean just take an algo and optimize a b c and get a system. I mean to test it to understand how it actually works. How it responds to large moves, momentum or mean reversion ? Impact of Volatility etc. From a basic understanding of a market, you can get a feeling and a source of ideas to derive a system.
You can also test your discretionary ideas and check if they have any basis in reality. Its hard to map discretion with logic but an approximation may be enough.

For me, it was a major change once i went from pure discretion reading only charts to testing the data to understand how it works. For ex, Pullbacks work but when do they work ? How should i manage trades etc etc.
Testing this manually is incredibly and deceivingly hard to do. Emotions and biases get in the way along with the need to test a large sample of data. I was a loop of making changes to plan and testing them and again changing them based on recent result which is pointless.

We need to appreciate how random the market is, how you can get a streak of bad results for a prolonged period of time even with a very good system, even for very good experienced traders. Drawdown is part of trading - both price and time.

All of this takes time, but once you have a probabilistic mindset, you will realize that individual trades do not matter at all. There is no point in banging you head on the wall in response to what happened recently. Its easy to say and everyone will feel something, but it gets easier with time. Moving to completely mechanical trading in intraday has almost freed me from such problems. But i still feel the ups and downs a bit but its easy to ignore.

A single trade can be source of ideas instead, if you missed a trade - do such trades have good edge? Define it and test. Once you have this kind of process, it will be very hard to break your rules - you have be afraid to do that and lose money in the long run. Instead iteratively improve your system based on emotional feedback like this.

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Bury the past and surge forward. Do what one can to prevent a missing trade. Over the years what I have done is to generate signals from daily charts to considerably reduce signal generation frequency, pre set orders, set alerts etc. Automation can also help.

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@MarginCaller If I miss an opportunity as per my trade plan, I get angry :angry:
But next thing I do is just close my terminal & do anything ( like watching TV, talking with family…) to control my this emotion.
That’s because there is a fair chance that If I keep looking at the screen even after missed trade, I would go for unplanned impulsive trade which would either work for me or not. If it worked, I would develop a bad habit of taking such unplanned impulsive trades again and again and one day market would teach me a very expensive lesson.:stuck_out_tongue_winking_eye:

Solution to this problem ( that I found) is improve your execution of trade.
Develop a system with good execution. It means as soon as you see your set up, you take it without any doubt or hesitation. :slightly_smiling_face:

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THE PAIN IS REAL @MarginCaller It gets more painful if we exit any trade with 30-40% and the same option when it becomes 10-15x . The pain is real and intense :sneezing_face: :heavy_heart_exclamation: :broken_heart: :heavy_heart_exclamation:

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I do swing trading on the weekly TF and thus need to have patience for months to take the trade. When the price arrives at my level, a lot of times, there is gapup or gap down thus playing spoilsport to my trade. Weeks of planning goes down the drain. There is a lot of disappointment and frustration at that time, but such is the game. Shrug off and look for next opportunity.

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This happens to even investors, but who cares, there is always another chance. Why should there be pain.

Example: Wipro was available at 520, wanted to buy when it touch 500, but it went to 620 or so.
Indian Energy Exchange on the Ex date was around 253. Now it is around 285. I own this business but only bought small quantity on the ex date.

This happens to everyone and should not be taken so seriously, You will always get another chance.

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Is your position size too large? If so, try reducing your position size and see if this recurs…

My 2 cents…