I just wanted to share my experience with everyone here. I hope it helps others understand the mental game of trading.
I spent a significant amount of time developing trading strategies and finally I developed a very good profitable strategy. Looks great in backtests and works superb in forward tests. But I am still struggling to make money. Why??
Because I am an emotional mess while trading. I am a calm person IRL but I turn into a disaster while trading. My strategy will make a LOT of money if and only if I could I could follow my rules strictly. Means if a SL is hit, wait for the next signal to take a trade.
But no matter what I do, my inner mental demon takes control of my while trading. A small SL is just that. A small loss. But when I take a small loss, which is part of the plan, somehow I cant control myself. I jump into revenge trades, I abandon my strategy etc.
So you might ask, why can’t you control yourself? I don’t know, i just cant. Everyone wants a profitable strategy. I have one, but its useless. Because my strategy is not the problem, the problem is me.
Now I am looking at automating my trades. Let the computer do the trades while I step away seems to be the only solution. Because if I look at what’s happening my inner demon will come out again. I just want to drill down this idea - controlling yourself isn’t easy. And it’s scary how easily your mind can give you losses when you should be making profits.
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Automated trading does make things easier on your mind. And after that you will need discipline and just not look at the market at all. Let computer handle stuff for you ( except if there is an issue).
Easier said that done yes, but it does get a lot easier to follow rules vs trading manually.
And reduce risk if needed to reduce emotions, good luck.
Hopefully not replying to a bot …
Man same thing i too struggling, With small quantity, i follow my trading discipline but when i try to increase quantity and if taken trade goes in loss, game overs there because mind just goes in reactive mode . I follow discretionary trading and I’m quit good at it but not having discipline becomes hurdle, However I have started figuring out it.
Imo Discretionary trading is way more profitable than systematic one but lacks objective signals like specific setup formation ex. ema crossovers. Hence systematic trading gives clear indication of trade on chart itself and requies less practice of discipline. But in discretionary, taking a trade depends upon subjective understanding and experience, there maybe indicators on chart but there is no deciding factor on chart, hence requires more practice, patience and discipline to take trade on right condition formation.
One reason that i have found is due to the basic working of our psychology, that it doesn’t want to hold bad or sad situations, it just want to come out of it ASAP, but when it comes to good or happy situations, our mind just don’t want to let it go. Generaly, we are not in hurry or greed while taking our first trade of day, but if it goes wrong, then psychology degrades and a chain of bad trades starts happening. All because the beggage of loss of first trade in mind, that is the main point of problem.
Our mind just don’t want to be in that loss state of pnl or don’t want to carry that beggage, and wants to escapes from it ASAP by doing anywhere trade. All i can say for now is keep practicing and just don’t become reactive when loss happens, stay calm and have patience. Accept the situation and Wait for your proper setup formation again.
In such conditions, taking break for some time also helps a lot, atleast when you are not so disciplined and beginner. That’s why there is kill switch in zerodha, so that if you loss in your first few trades, you can disable your terminal and escape from overtrading, clearly a good feature for beginners, because following discipline is the main factor in successful trading.
may be trading is not your cup of tea. try quitting trading, you might actually make some money.
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Why don’t you learn trading pyschology in details a lot of good content is available
I have been trading in FnO for sometime, and this was one of my issues!! These can be tackled by:
- Start with a low capital (like 1 lot). You should have an idea of your average drawdown period of your system. Increase by 1 lot towards the end of drawdown. Do not increase anymore, if drawdown continues. Wait until full drawdown recovery + 5% profit. Wait for next drawdown and repeat the steps (1 lot increase).
- Convert your strategy into system trading, and don’t break rules!!
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