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I totally agree with what A.J. said, especially the part about looking at
it as "collecting your due". After 2-3 consecutives losses, I'm alway
optimistic that the next trade will be a winner. I'm usually exonerated.
This has helped me stay confident even when my system is not doing that
well. Outside of trading diversified systems to help minimize account
volatility/drawdowns, staying disciplined and not flinching has always
saved my butt.
Regards,
Craig
omega-list@xxxxxxxxxx on 01/23/98 07:02:31 AM
To: omega-list@xxxxxxxxxx
cc: (bcc: Craig Nelson/NY/SBCM)
Subject: Re: investigating possibility of experienced trading system
partner
Jerry Baker wrote:
> Some of you, long on this list, may recall some of my requests for
> suggestions regarding overcoming trading fears, afraid to pull the
trigger,
> fear of any loss and the rediculous change in focus I make from system
> signals to involvement in tick by tick movement that takes place when my
> money is on the line. It has not changed....My fears, relative
> to the performance of the entry signals, are absurd, but they are a fact
> that I must recognize and work around at this point.
This is the *real* challenge in trading...I've definitely been there big
time
in the past, and there's no doubt that I still could use improvement in
this
area. I know traders who have been at it for a *very* long time who still
have
this problem to a degree. Is there an easy answer to this? Of course, as
one's ability to pick good trades increases, we would expect one's
confidence
to increase accordingly. Still, though, fear can continue to intrude on
our
trading decisions, causing us to forego good trades, or exit too early.
Here's a suggestion that might help those who are really struggling with
this.
First, decide what your average profit would be per trade if you acted on
all
your good trading ideas and signals (this doesn't have to be anywhere near
exact, anything realistic will do). Whenever a trading opportunity comes
up,
see it as COLLECTING rather than "risking." In other words, a good buying
opportunity arises, and you ask yourself - "Am I going to collect my $X
here?"
Of course you are. Should the trade not deliver the $X, then you are
"owed"
this amount in further trades - you will get paid for it later. On the
exit
side, if you *don't* stick with the trading strategy as planned, you
*won't*
collect your due, so you have to stick with it.
This might appear to be simpleminded, but it may help get your head
straight
when you've got good trading ideas but are having trouble putting them in
action properly.
Regards,
A.J.
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