# My Obstacle to Trading Success



## James Austin (7 March 2009)

I’ve been slowly learning to intraday index trade. The index, especially the smaller time-frames, is a difficult instrument to master. Overall things are sort of progressing. My technical knowledge is sound and the system I use is robust. 

But I have recognised a significant obstacle to my success.

Surveying my trades I notice a reoccurring pattern. My trades can be nicely grouped into “technical trades” and “emotional trades”. My technical trades follow my rules, and demonstrate patience and discipline. My emotional trades in contrast, disregard my rules and are driven by hope, fear, greed etc.

My trading week just gone has been riddled with emotional trades. Just last night I was “certain”, (without any technical or experiential basis) that ABC would happen. I took a number of trades just like this one. Lo-and-behold, things didn’t go to my plan.

I seem to cycle through periods of pure technical trading, broken up by emotional trading. When this occurs my results swing form consistent profit to consistent loss. And so the cycle continues. It is frustrating to have a profitable trading system, comprehend the rules of that system and know how to apply them in real time, yet to be repeatedly undermining myself with acts of random trading. 

As a rule I don’t consider myself overly emotional. In my life outside trading I tend not to get carried away emotionally. In fact, even as I write this I struggle to comprehend the impact emotion has had on my trading, because my emotional experience isn’t blatant. I’m not smashing keyboards, cursing monitors nor kicking the family dog. My emotion is far more covert than that, operating by stealth, unseen, unheard.

I am confident (or hoping!) that virtually all intraday traders at some time experience what I am experiencing now.

We’ve all read countless stories of successful traders losing $1000s or $100s of thousands of dollars, at some point in their trading career. J.Livermore is a classic example. Here’s a trader held in high regard who more than once went bankrupt because he lost sight of the rules that governed his trading. I assume this was in part due to emotion clouding the analytical mind.

I’ve read research concluding that functional sociopaths make the most successful traders because emotion doesn’t get in the way of their technical analysis. The sociopathic option isn’t a viable avenue for me (given lobotomies are no longer practiced). 

Is there another way to weed out this reoccurring divisive pattern in my trading? I’ve spent a great deal of time patching the hundreds of holes in my trading dingy. But unless I patch this one, me and my dingy are going down.

*I’d appreciate hearing how other ASFers who have experienced the same cycles that I now find myself stuck in. What was your experience? How did you move through this period of your development? Any tips?
*


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## Trembling Hand (7 March 2009)

> As a rule I don’t consider myself overly emotional. In my life outside trading I tend not to get carried away emotionally. In fact, even as I write this I struggle to comprehend the impact emotion has had on my trading, because my emotional experience isn’t blatant. *I’m not smashing keyboards, cursing monitors nor kicking the family dog. *My emotion is far more covert than that, operating by stealth, unseen, unheard.




Well there you go. your not doing the right thing!


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## Stormin_Norman (7 March 2009)

treat the numbers are the score in the game, not money.


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## Trembling Hand (7 March 2009)

But seriously the bullsh!t about controlling emotion is wrong. We have them for a reason. MichealD put it very well recently,



> Mostly, emotional decisions work, but when they don't, they fail spectacularly.




You shouldn't ignore them or try and "control" them. they are telling you something. You need to be able to recognise what they are and then use that info to your advantage. 

We are emotional beings. accept it and use it. work on reading the market and reading yourself. What is the discretionary traders job? Finding info and acting on it. Not suppress it or ignore it. Get a video recorder or a tape recorder and watch/listen to yourself after the market has closed. There's patterns there just the same as in a chart. 



> I’ve read research concluding that functional sociopaths make the most successful traders



 I would like to see this rubbish study. I bet its got more to do with cliched stereotype BS than fact. From the time I have spent around short term discretionary traders the quiet controlled ones are the 1-2 lot traders about to hit drop dead. The loud frustrated cursing ones are the big swingin' dicks flingin 40 lots.


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## Trembling Hand (7 March 2009)

Trembling Hand said:


> *your *not doing the right thing




And I cannot spell!


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## James Austin (7 March 2009)

Trembling Hand said:


> You shouldn't ignore them or try and "control" them. they are telling you something. You need to be able to recognise what they are and then use that info to your advantage.





i accept there is no need to be rid of emotion as a trader,
but there are emotions that will hinder 

case in point, 
yesterday i was quite driven by "hope" and then "revenge", when hope failed


but yes, self-awareness re my trading emotions and what info this is providing me is probably the lesson to be learnt here.


but TH, tell me you've lost the plot at least once! this is par for the course, right?


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## Bobby (7 March 2009)

Run us through one or some of your emotional trades , I'd find it most interesting comparing  
As TH said ' don't try to suppress them '  ..


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## Frank D (7 March 2009)

James,

It’s called baggage and it’s hard to shake regardless how many years
 you have been trading.

Some can’t take a trick when trading and continually take backward 
steps. Others can’t pull the trigger because of fear.

Others can’t let profits run even though everything tells you that based 
on probability that the market is going from point A to point B.

I’m in the latter.

Look at the chart below on the SPI. You can’t find patterns as 
statistically reliable as those. Nothing is curve fitted, it’s simply 
the movement of price over certain ranges within certain daily ranges:- 
*rotation and extension*


But I still have a problem of holding my trades and exit far too early for 
my liking. 

Now what I have to do on most occasions is actually walk away from 
the screen and not look at the market for a number of hours so that my 
exit isn’t over ridden by some minor intra-day pattern.

That's because I started trading with minor indicators and taking small 
profits.

That’s why I like the US markets, you place your trade and wake up the 
next day and see how it went.

That’s also worked against me because I’ve been in profit over 100 points 
on occasions only to see the market reverse and take out my stops and 
then continue to where it was going in the first place. That’s a bummer.

Personally I prefer to use the 5-day highs and lows and place staggered 
limit entries around those levels:- rotation

I did that with the Euro and GBP last night, woke up this morning and took 
a loss on the Euro for 30 pips, but got the near top on GBP and exited for 
a return 115 pips.

On most occasion markets will reverse around those highs and lows.

I had another staggered entry on the euro at higher prices but it failed
 to reach by 15 ticks, which would have provided the same reversal
 pattern down from the highs.

During the Asian timezone. I’ll use other patterns to trade that have
 the same robust probability.

The same with the 5-day patterns in the US markets:-  highs/lows and 
50% levels.

*Therefore James, you probably need to step away from the screen 
and look at probability patterns on a number of different markets and 
only trade when those patterns are confirmed with statistical 
reliability.*

Instead of staring at the screen looking at minor indicators to make 
trading decisions, which is what most short-term traders do. Plan your 
day and how you will trade before the trading day, don’t plan your 
trade around an indicator.


*Find statistical reliable patterns in the market and work out your trading 
rules around them, which should be based around some form of  support 
and resistance and money management.*

You'll soon realise that you'll have a method that is way over 50% expectancy and with a 1:3 Risk reward.

But you'll need to be patient until those patterns occur. That's why
 you focus on a number of different markets & forex.

And use the concept of rotation and extension within the 5-day range.

cheers
Frank


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## Trembling Hand (7 March 2009)

Ok what causes these emotions once they are recognized.

By far the greatest cause is lack of skill. Causing distress and emotional responses. People trade H & S, EW etc without a friggin' clue weather they provide a probable positive result. Then they end up like shell shocked soldiers, pulling out of trades just as they are about to turn, always looking at the wrong thing, always on the wrong side etc. They are just crap traders and don't even know what they don't know - as the saying goes. 

The other cause of emotions is around the frustration from mismatched expectancy and expectations. So you have an edge, you do know to some degree what the hell you are doing, but its not likely to every make you a million dollars this year and certainly not with the size you are trading. So its F...in' frustrating. Which leads you to deviate from what you know will make you money, chasing a bigger/better result. So there is your answer to the cause. Now to actually find the solution......


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## Trembling Hand (7 March 2009)

James Austin said:


> but TH, tell me you've lost the plot at least once! this is par for the course, right?




LOL, Hourly mate


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## James Austin (7 March 2009)

Frank

A few points: 

1]

_“It’s called baggage and it’s hard to shake regardless how many years
you have been trading.”_


I think this is realistic. We don’t ever really get rid of the “baggage”, but it’s important to know what our baggage is and learn to manage it in order to be consistently profitable.

2]

_“Therefore James, you probably need to step away from the screen 
and look at probability patterns on a number of different markets and 
only trade when those patterns are confirmed with statistical 
reliability.”_


Yes, I have found a correlation between obsessive screen time (over-enthusiasm) and excessive number of trades (in relation to the system I am using), and loss. Surprise, surprise!

The best trading weeks I have had, I’ve traded 2x 2hr lots a day and taken 5 to 10 trades in the week. (Vs 14hr days, plus 15 trades a day)

3]

_"Plan your day and how you will trade before the trading day, don’t plan your 
trade around an indicator.

Find statistical reliable patterns in the market and work out your trading 
rules around them, which should be based around some form of support 
and resistance and money management.

But you'll need to be patient until those patterns occur. That's why
you focus on a number of different markets & forex."
_

“Planning” and “Patience”. Two qualities I have been trying to emphasise as I learn the craft. I am working on each trade being calculated and intelligent, or “planned”, as opposed to the sometimes random and impulsive trades I like to take, and then regret.

And the “patience”. Sometimes difficult. An idle mind is the devil’s playground as they say. Less screen time and another market alongside the SPI should help.



Thanks Frank, there is a wealth of insight in your post, it will take some time to process all of it . . . . and the rest of my life practising the skills.


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## James Austin (7 March 2009)

Bobby said:


> Run us through one or some of your emotional trades , I'd find it most interesting comparing
> As TH said ' don't try to suppress them '  ..





the chart may not make much sense because its Franks unique system.

but basically the red circle represents a high probability short on the ftse last night if the range bar hooks under the dotted pink line.

my rule is to *wait for the hook* and then go short, because all to often the range bar looks like it will hook but then reverses. 

so, 
deciding to break my rule i went short 3538, thinking "great, nice early entry, prior to hook completion". 

16 seconds later, stop hit, trade closed. someone had other ideas.

all so easy and straightforward in hindsight; my most profitable form of trading; but dumb decision, been caught so many times!


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## tech/a (7 March 2009)

Well TH I dont agree.

If your running a business you do it without emotion.
*I'm talking about the emotion which governs major decisions not the odd spit.*
Emotion creeps in only if your outside of your comfort zone.
Iliminate this and youll eliminate the emotion.

Find out what it is that triggers your emotion and then deal with it so that it doesnt occur again.

Taking any business. Some of the triggers are.
(1) Undercapitalisation.
(2) In experience as you have said.
(3) Lack of proven plan
(4) Lack of risk controls
(5) To big to quick.

To name a few.
Any of the above and I'm sure others will have you second guessing and lacking in confidence.

On the flip side
Ask yourself why you dont panic in situations which you find a snap.
Spot the difference.

It can be done so that you go from one decision to the next with confidence.


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## Bobby (7 March 2009)

James Austin said:


> the chart may not make much sense because its Franks unique system.
> 
> but basically the red circle represents a high probability short on the ftse last night if the range bar hooks under the dotted pink line.
> 
> ...




Hi James,
Thanks for the example but before I comment just need a little more information to better understand this trade , what time range are those bars & your stop number ?


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## James Austin (7 March 2009)

Bobby said:


> Hi James,
> Thanks for the example but before I comment just need a little more information to better understand this trade , what time range are those bars & your stop number ?




there is no time, they are range bars,
stop is often around 8pnts from entry.

that aside, the rule, "*dont enter until hook complete*" is tried and tested and its best if i stick to this rule once and for all. 

there are of course exceptions, but there is plenty of time for "exceptions" when i have more experience (he says just hrs after making an exception!)


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## James Austin (7 March 2009)

tech/a said:


> Well TH I dont agree.




i do wonder if "scalping" lends itself to letting yourself go.

but other trading styles, particularly the one i'm using (dilernia's), may be more akin to ballet than rugby.


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## Trembling Hand (7 March 2009)

tech/a said:


> Well TH I dont agree.
> 
> If your running a business you do it without emotion.
> *I'm talking about the emotion which governs major decisions not the odd spit.*
> ...




Sorry tech what bit do you disagree with  I can't see anything here that is in disagreement with what I was saying


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## bunyip (7 March 2009)

James.....Write down the rules of your consistently profitable technical system.
Let's say there are four rules to your system. When you think you have a trade setup, run your checklist of rules over it.
If your proposed trade passes rule 1, put a tick beside it. If it passes rule 2, put another tick. If it fails rule 3, put a cross. If it passes rule 4, another tick.
Don't take the trade unless you have four ticks.

This process won't take more than a few seconds and will ensure that you take only the trades that meet all the criteria of your system.


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## Bobby (7 March 2009)

Ok your like me , can't help myself from jumping in early.
Only trading the SPi day session at present , no stops placed - all  in my head , watch the XJO like a hawk for direction then reverse when this stalls.

Hard to verbalize  entry & exits , fight the urge to take a loss & will throw another contract or two at it .
Get myself in deep sh*t some days but manage to extradite most times , always exit before the close .

I know I'm going to get hit hard but that day is not soon as bias for risk is on the short side . :headshake


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## James Austin (7 March 2009)

bunyip said:


> James.....Write down the rules of your consistently profitable technical system.
> Let's say there are four rules to your system. When you think you have a trade setup, run your checklist of rules over it.
> If your proposed trade passes rule 1, put a tick beside it. If it passes rule 2, put another tick. If it fails rule 3, put a cross. If it passes rule 4, another tick.
> Don't take the trade unless you have four ticks.
> ...




thank you bunyip
this is practical and common sense advice. 
i know to do this, its the "must" bit that i like to deviate from occassionally


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## tech/a (7 March 2009)

Trembling Hand said:


> Sorry tech what bit do you disagree with  I can't see anything here that is in disagreement with what I was saying




Bugga.

We agree then!

Just me being disagreeable.


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## James Austin (7 March 2009)

an interesting article below written by Brett Steenbarger.

impulsivie emotional trades leading to breaking trading rules on a cyclical basis, may not fulfil the strict definition of "addiction", but i see some overlaps. 

whilst my ego would prefer to trade on, i think it would be sensible for me to return to sim trading, until a _consistent application of rules is habitual_.

otherwise i may as well head to the casino


http://www.brettsteenbarger.com/articles.htm




> What I love most about trading is that it exercises the brain and the will. It involves ongoing analysis and problem solving, and it requires the steady development of performance-based skills. I'm sure serious players of chess and poker enjoy similar benefits. Talk to any successful athlete and you'll find someone who has cultivated themselves, not just their bodies.
> 
> There are times, however, when trading becomes a vehicle for destroying mind and soul. You won't hear brokerage firms, trading publications, or seminar producers talking much about this problem, because their common aim is to keep the public trading and buying trading-related products. But, as someone who has worked with many independent traders and traders at firms, I've seen this problem far too often: trading becomes an addictive activity.
> 
> ...


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## MS+Tradesim (7 March 2009)

James Austin said:


> thank you bunyip
> this is practical and common sense advice.
> i know to do this, its the "must" bit that i like to deviate from occassionally




This is a conversation I have with others occasionally (not about trading). In the words of Dr Phil, "How's that working for you?"

If your deviations are not working, why keep repeating them? You must be getting something out of it or you wouldn't keep repeating the behaviour. Is it the excitement? The not knowing how it will work out because it was "against the rules"? The lure of "What if I miss this trade?"

Talk through your mindset, your decision making flow - TH's idea of videotaping it is good - then review it later.


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## Trembling Hand (7 March 2009)

James while it is no good continuing on with trading if you are losing $$'s But what are you going to work on? you don't know what is broken. Going to sim without knowing what points to fix will be wasting time. Are you going to sim to learn how to  be as disciplined as this dude?





Or are you going to sim to work on how to recognise when your set ups are developing. 

Big diff IMHO. because what are the probabilities of your set up occurring in your market. *How often and how much can you realistically expect from that?* No good fighting yourself each day to take trades that will net you 10 points avg per day when you really deep down feel you should be taking 40. Not to mention the need to be taking far more to pay the bills. It seems that just like in other buissness people set themselves up for conflict with their plans, reality and execution.

This is important question right now. We have just gone through the BEST year ever for intraday trading. I would be surprised if I every see that action again. Which leads to the question are you looking for last years action where you simply will not find it? I think you are trading the SPI and I'm  getting the feeling that we need to start expecting far far less from that. Which is were my point about 


> mismatched expectancy and expectations




and Franks point about probabilities.


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## James Austin (7 March 2009)

TH

As you know I use the Dilernia Model. I am happy with it. I have seen Frank consistently profit from it and I have had periods of consistency with it myself.

Reviewing my trades over the months I conclude that it is not the system I use that needs changing, nor my knowledge of it, nor my application of it (when I am trading with a steady mind or in “the zone” as they say). 


What do I need to work on?
My own divisive habits. My tendency, approx 1 week in 4, to lose the plot and start trading more from emotion and less from tech analysis: hope, revenge, fear, greed etc.

How will I do this?
Develop an awareness of my unhelpful habits as they arise in real time.
Take steps to counter such habits: reduce screen time, reduce distractions whilst trading, commit to the trading rules I have developed which I see work well in those 3 weeks in 4.


Re SPI losing volatility: 
we both know there are other markets and that new systems or trading styles can be developed; I’m happy to change when the need arises. Set-ups, trade signals, . . . . trading the SPI am 3hrs and the FTSE pm 3hrs, there are enough opportunities; to-date at least.


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## Trembling Hand (7 March 2009)

I wasn't saying anything about the method.... relax

what i was saying is why would a sane person deviate from what they know works? They need more? I don't know but worth looking at.

Would love to know how you actually plan on working in sim mode on your 







> tendency, approx 1 week in 4, to lose the plot and start trading more from emotion


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## James Austin (7 March 2009)

Trembling Hand said:


> what i was saying is why would a sane person deviate from what they know works? They need more? I don't know but worth looking at.





it is a good question TH, and its the question i need to answer 
so that i can either stay on track or realise i need to find a new one.


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## lindsayf (7 March 2009)

bunyip said:


> James.....Write down the rules of your consistently profitable technical system.
> Let's say there are four rules to your system. When you think you have a trade setup, run your checklist of rules over it.
> If your proposed trade passes rule 1, put a tick beside it. If it passes rule 2, put another tick. If it fails rule 3, put a cross. If it passes rule 4, another tick.
> Don't take the trade unless you have four ticks.
> ...




I think this is right..with the provision that you are constantly scanning the situation so that if your setup materialises you are already at least partly prepared for it...if you havent been analysing price action constantly and then..oh #hit!!..heres my setup..are the confirming factors met,??!...a few seconds may well be too long to get a reasonable entry....if you then miss it or enter late and get stopped out....then the frustration/anger/revenge can set in...the persisent application of concentration I find very demanding..... I relate to your experience James...and I am just simming...still..I am very confident in my method too..the x factor is its execution.


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## MRC & Co (7 March 2009)

James Austin said:


> case in point,
> yesterday i was quite driven by "hope" and then "revenge", when hope failed




LOL.  Welcome to my world James!

As you know, I don't use a system like you and Frank, so there are days, when I simply (I have concluded), don't have the skill to trade and compete against these algo bots (I trade the noise, and they are all about taking advantage of the noise, so they are basically trying to steel my niche)!  They pull orders, and squeeze me out of positions.  On these days, when I go down a bit, I give myself a certain stop (about 1/3 of my daily stop), whereby I sit back, and think on how I am getting bled of my ticks.  It seems to help a LOT, not only it minimizes the down day, but a lot of the time I go back and beat the algo bots at their own game and end up getting back to green.  

When I don't sit back like this, I end up angry and try do size so they have more trouble squeezing me, end result:  I get nailed to a wall and pounded into submission!  And as we know, one big down day, can take 3 up days (after brokerage), for a scalper to recover from!  

Just one way I handle my negative emotions and realise quickly, without too much damage, when it's time to alter the game-plan a bit.  Either by working out what the algo bots are doing in the order book and making money off this, or simply being more patient, waiting for a set-up on the chart, widening my stops and avoiding their BS noise and traps.


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## nizar (8 March 2009)

MRC & Co said:


> As you know, I don't use a system like you and Frank,




Any reason why not?
Just not your style?


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## Bobby (8 March 2009)

Lets talk about how to reduce the number of points  normally lost using stops  ::

                                      Intra day



If you take the loss its real - DONE " you lose those points .

Try this :- have enough margin so you can throw more contracts in to defend your losing position as it goes against you.
Place an another when its 9 points against , then hit again at 11 points farther .
\
 If it all turns to sh*t get out when it goes 22 or 23 your call , I do it with good results , better then suffering continual stop hits like at 4, 6, 8 ,10 ,  your pick .
   :sheep:


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## James Austin (8 March 2009)

I think I might of come to an understanding of the nature of what is undermining my trading.

To summarise my core problem as I see it:

Essentially I have a series of good trading weeks, only to then lose the plot and take a series of random, emotionally driven trades; spoiling not only the week in question but also the good weeks. 
Why, why, why, is this happening? 

Tired of this repetitious cycle and treading water, it’s come time to face my situation head on.

Reading an article by Brett N. Steenbarger (Trading Psychologist) has alerted me to the fact that I may be experiencing a temporary form of ADD; Attention Deficit Disorder: prone to wandering attention, reduced self-control, and impulsive behavior. Assessing my random trades in those disappointing weeks, clearly demonstrates periods of reduced self-control and impulsivity. 

Brett states that to trade in “*the zone*”, that state of mind most conducive to success in any challenging endeavor, we need to be able to “*stay focused*”. 

“_When we operate outside that "zone" and lose our focus, we are no longer activating that executive center of our brains--the frontal lobes--that control planning, judgment, and reasoning. Left with a weak executive center, we become like a person with ADD: prone to wandering attention, reduced self-control, and impulsive behavior_.”

The type of focus intraday index trading has required of me has been quite intense. Previous experiments reducing my trading hours has shown me to experience no ADD like symptoms and be capable of sustaining a productive level of focus for about 3 to 3.5 hrs. After this time a lengthy break of at least a couple of hours is required.

When I trade more than 3.5 hours, it seems I may very well be entering an ADD state of mind. Last week a poor trading week for me, for example Friday, my computer went on at 6.30am and off after midnight with no substantial breaks throughout.

The aftermath of “ADD trading”, if I can call it that, is it *looks like I’m an emotional and undisciplined trader*. But Brett says this is wrong. “_In reality these are the results of the problem; not the causes._” 

This is a crucial point. Much attention is given to emotion and discipline in trading literature. These variables “can” undermine our trading but often they are a symptom not a cause. Hence your trading doesn’t improve if you keep targeting the symptom without changing the cause.


*In summary, to trade in “the zone”, or at my peak potential, I need to be concentrated, focused, absorbed. And each individual will have a threshold when the “executive center”, the part controlling planning, judgment, and reasoning becomes exhausted. When this threshold is reached, a weakened executive center, can give way to ADD like symptoms and behaviours. *

If all of this is true, the solution to my dilemma might be quite simple.

A]  understand the relationship between the brains executive center, exhaustion and ADD symptoms

B]  know my own limits where focus and productivity begins declining

C]  develop a trading time-table to compliment my temperament


To conclude, it might seem pretty obvious that we need to take a break every now and then. But it’s not always easy to see the bigger picture when on the inside. 

Furthermore, we often don’t have the conceptual model, such as the one provided by Brett, with which to understand or unpack our situation and therefore make the necessary changes.

-------------------------------------------------------------------------------------

Any way I shall reduce my trading hours, stick to my new time-table and report back with the results for any one interested.

Thanks to all who have contributed, you have encouraged me to dig deeper.


James


_** Finally, the last obstacle to trading success out the way. Glad that’s over with._


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## Nick Radge (8 March 2009)

> Why, why, why, is this happening?




You are being undermined by your own ego. You have a winning streak, subconsciously think you're pretty damn good, better that your system to be sure, so the only choice is to trade more opportunities. Because its you and not the system that is good you look for other trades.

You need to accept that its the system making the money. Not your own abilities.


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## MRC & Co (8 March 2009)

nizar said:


> Any reason why not?
> Just not your style?




It's how I have been 'trained' at this intraday business.  

Also agree with Nick, sometimes when you go on a winning streak you start trying more things, thinking your good enough to create another edge, only to be brutally beat down by the market and go back to your conventional methods with your tail between your legs.


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## Wysiwyg (8 March 2009)

There is always `gamblers anonymous` if the bull dung gets too thick.


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## Frank D (9 March 2009)

James,

Look at the weeks that you have done well or the trades set-ups that 
have made profits,

And then the ones that have failed.

I bet most  of those trades or weeks that  have done well because 
*price  was matched with support or resistance*:- ie a higher or lower
 open matched with a level that has consistently reversed the direction 
of the intra-day trend with the underlining overall trend.

The worse trades were probably when markets open or a trading away 
from support or resistance which is usually in the middle of a range,
 away from support or resistance.


Even though you might be using a proven method that makes money, you 
still need to optimise the method based on market conditions to increase the edge.

At this stage this might be your biggest problem, understanding the market conditions to opitmise your trading set-ups, which leads to over-trading 
and making mistakes.

This comes from experience.

Today on the SPI is a prefect example:- it might provide the perfect
 trade but it’s nowhere near a support/resistance level.

Therefore there is more chance of you being stopped out early even 
though the price might go in the direction that you were originally trading.

Seriously look at introducing forex and currencies into your trading, as
 there are an abundance of opportunities to make money. But be patient 
and optimise the set-ups.

I bet if you introduce other markets into your trading you will begin to 
be able to optimise the set-ups far better because one of them will met 
the conditions, whilst the market you usually trade (SPI & FTSE) doesn't

Don’t feel you have to be busy to make money.


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## jersey10 (9 March 2009)

Frank D said:


> Don’t feel you have to be busy to make money.




Love that.


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## cuttlefish (9 March 2009)

James,  my  on the topic.

You need to reward yourself for disciplined behaviour.  Currently your 'reward' is a profitable trade or a successful loss minimising exit - thats rewarding succesfull implementation of the system but its not specifically focusing on discipline/restraint.

An approach that may help: After each undisciplined/emotional trade - write down the specific mistake you made (e.g. the example yoiu gave above - trying to enter in advance, before your entry signal completed).   Build up a list of the specific 'emotional' mistakes you make.   This is your 'DON'T DO' list.

Whenever you make an emotional/undisciplined trade and regret it, go back to your 'DON'T DO' list and mark the specific type of trade you've done with a cross next to it.  If it isn't on the 'DON'T DO' list already (i.e. its a new type of mistake) add it to the list.

Whenever you are tempted to make an emotional trade but don't proceed and do exercise appropriate discipline - go and find that pitfall on your list and put a tick next to it for succesfully avoiding it.

I believe that if you follow this you will very quickly start to develop a new behaviour pattern surrounding these emotional/undisciplined trade pitfalls.


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## James Austin (9 March 2009)

Cuttlefish,

It sounds logical. I have built extensive lists of what works and what doesn’t.

But undiscipline, emotional trading, I suspect is actually a “symptom” not a “cause” in my case. I’ve tried to explain my view on this in post #32 above.

It’s more likely that my temperament is not suited to staring at a screen 10hrs a day, and that’s what I’ve been doing. So I am reducing my screen time significantly; previously when I have done this my results have been consistently profitable, and more importantly I am happier within myself.

Trading is still my passion, but as Frank said above, “Don’t feel you have to be busy to make money.” Less in my case, is probably going to end up being more. 

_** Trading is far more involved than I imagined when I began. I never realised I need more than a strategy that works and the ability to implement it in real time. I also need to synchronise temperament with instrument, time-frames and style. Aligning all of these takes time._


Frank,

Yes, there is the issue of too much screen time as mentioned, but also the issue of real time skill/ experience. Your system does provide blatantly obvious set-ups and varying degrees of, along the continuum. Sorting these in real time takes experience.

As you say, a range of markets/instruments will give me access to more high probability set-ups, than the SPI alone does; potentially warding off the tendency to try and squeeze more out of the SPI than it has to offer.

Another instrument or market is something to implement when I decide to increase my screen hours, in the future.



Thanks again to All who have contributed.


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## happytrader (9 March 2009)

Hi James Austin

Having read your posts, it seems obvious to me that your major obstacle to trading success is one of mindset. Forget the excuses and the intellectallising and "Make up your mind" 

Cheers
Happytrader


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## Trembling Hand (9 March 2009)

happytrader said:


> Forget the excuses and the intellectallising and "Make up your mind"



Yeah James stop stuffing around and just make your mind up that this week you will make a heap of $$'s.

LOL always works


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## James Austin (9 March 2009)

Trembling Hand said:


> Yeah James stop stuffing around and just make your mind up that this week you will make a heap of $$'s.
> 
> LOL always works





that was the theme last week, sheer will power!


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## cuttlefish (10 March 2009)

James Austin said:


> Cuttlefish,
> 
> It sounds logical. I have built extensive lists of what works and what doesn’t.
> 
> ...





James - cheers for a very interesting thread.   I read your comments about the length of time and the shift into an ADD type of mindset if you prolong the hours - and agree that this would be a very real phenomenom - so minimising the hours or getting away from the screen when you are starting to notice yourself slipping into a gambling mindset makes sense.    Still - by implementing something along the lines I've described above it might be possible to both prolong the time that can be spent at a screen (ideally to the extent that it is simply inbuilt into your psychology not to adopt gambling/undisciplined behaviour) and also greatly reduce the risk of making poor decisions in a situation where you are under a lot of pressure.   

Clearly using appropriate money management so you are always trading within your comfort zone and within your rules/system help to avoid situations where you feel undue pressure.  Now that you are also making sure you trading within your attention span limits you've implemented a lot of factors for avoiding the emotional state of mind that can lead to the undisciplined/gambling like decision making process.  

But even with the best planning you can still find yourself in a situation where you are tired and/or under pressure - and in those situations you need to be well versed in avoiding the emotional pitfalls that lead to bad decisions. Something as simple as a technical hiccup like a loss of a connection for a few hours while you have some significant trades going could put you into a state of mind where your emotional control is reduced.

Thus my view is that training your mind to avoid the pitfalls, even when you are tired and under pressure, is something that is possible and worthwhile.  

You might even be able to, instead of stopping when you are reaching the 'ADD' state,  deliberately trade for one more hour with the single goal of not making any irrational/emotional decisions for one hour - make this the actual focus of your session.   You might also try tightening up your trading during this time period - for example selecting prior to this extended practice session some classes of trade from your system that you will specifically not trade even if the entry criteria are met - just to practice restraint. You could even try watching the screen for an hour, two hours and not take a single trade even if it completely matches your system - again just to practice and confirm to yourself that you can exercise this restraint.


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## James Austin (10 March 2009)

Cuttlefish, 

no doubt there are ways to increase screen-time without drifting off into ADD mode. 

From a lifestyle perspective, 2x 3hr blocks/ day, should be a nice balance for me. So for the moment, increasing screen-time isn’t a goal.




cuttlefish said:


> But even with the best planning you can still find yourself in a situation where you are tired and/or under pressure - and in those situations you need to be well versed in avoiding the emotional pitfalls that lead to bad decisions. Something as simple as a technical hiccup like a loss of a connection for a few hours while you have some significant trades going could put you into a state of mind where your emotional control is reduced.
> 
> Thus my view is that training your mind to avoid the pitfalls, even when you are tired and under pressure, is something that is possible and worthwhile.





I agree, even the most experienced and skilled will “lose the plot” if mind gets out of control.

For me the relationship is symbiotic; a robust trading strategy will offset “losing the plot”. As will a steady, focused mind maximise a robust strategy’s outcomes.

Personally, I don’t think you can have one without the other (unless the system is computerised/mechanical).

I need a robust strategy and the ability to apply it in real time. But I also need my mind to not be playing tricks. 

Reducing screen-time as mentioned will aid that. But when actually trading, the simplest way I know of is simply to pay attention to the “tricks”. Not easy, particularly in the heat of battle.


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## Cartman (10 March 2009)

geez i somehow missed this thread !!!  --- brilliant --

this is at the *guts* of trading and good onya James for bringing this stuff up



Bobby said:


> Try this :- have enough margin so you can throw more contracts in to defend your losing position as it goes against you.
> Place an another when its 9 points against , then hit again at 11 points farther .
> \
> If it all turns to sh*t get out when it goes 22 or 23 your call , I do it with good results , better then suffering continual stop hits like at 4, 6, 8 ,10 ,  your pick .
> :sheep:




u poor bast@rd Bob ----- u think like i do  --- lol ---



Nick Radge said:


> You are being undermined by your own ego. You have a winning streak, subconsciously think you're pretty damn good,




sorry Nick --- gotta disagree with u again on this one (becoming a habit) -- nothing to do with James' ego ----- he is simply 'unsure' about his trading plan ----- thats y  he keeps deviating from it (join the club James  ) ----  I think TH mentioned simming ----- but as he said ---- 
(i'll paraphrase/elaborate ---- u gotta do it in the same "zone" as the real thing otherwise its a waste of time cause all u r doing is replicating *bad habits *



cuttlefish said:


> Whenever you are tempted to make an emotional trade but don't proceed and do exercise appropriate discipline - go and find that pitfall on your list and put a tick next to it for succesfully avoiding it.
> 
> I believe that if you follow this you will very quickly start to develop a new behaviour pattern surrounding these emotional/undisciplined trade pitfalls.




C/F --- as always yr posts are filled with useful stuff ---- people should read yr stuff ----  insightful info only comes from experience --- hope u r trading  well  


no advice from me James --- other than i know exactly what u r feeling  ---- good luck with it ----


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## acetrader (17 March 2009)

Hi James

I do intraday tradings and overcame the same mental barrier about 1y ago. so I think my tips may help you.

First you need a trading plan package. This trading plan package has 2 parts.

1. Your trading rules. This is you own rule book. Write down your entry and exit rules, your money management rules and  5 of your most critical trading sins as warning.  This plan is not a book or to showoff to  other people. it is for yourself. So it must be simple and concise so you can read everything in one glance (no more than 2 pages). Use those words or pictures when you talk to yourself. print it out and put it beside your keyborad.

2. Your trading journal. This is the records of your dailly transactions. *buy/sell price, entry time, stop loss, target, exit price ,exit time*. Very simple and concise. Normally you can get those info from your brokers, but i'd like to write myself actually I'm filling in a trading records form on paper. To prevent overtrading (it is one of my trading sins), I only give 8 lines for each day in that records form. If you are lazy enough just write down entry price, stop and target immediately after you place the order.

Secondly, you need to change your objective. I realise that at this stage consistency is not the immediate objective, but following your own rule book is. So forget the profit and loss of each day. If you can follow your own rules today you are a winer today. If you break your own rules you are a loser. Set your target like one winning week then 2 winning weeks then one winning month. Give yourself some rewards when you finish your target each time. Just forget counting the beans. Believe me it won't take too long to find out what is the real cause of inconsistency. 

Good Luck!


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## James Austin (17 March 2009)

acetrader said:


> . . . . but following your own rule book is. So forget the profit and loss of each day. If you can follow your own rules today you are a winer today. If you break your own rules you are a loser.




acetrader

i hear you and am with you
my approach to the market is quite rules based, 
rules as central, profit as by-product, focus on the rules not the profit, 
yes, i understand

thanks for the input
James


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