HELP ! Exiting my trades to early

[ap]

RobinHood,


If you are trading a real account you should stop immediately.

It might take some time until you fix this problem. confidence = experience and experience is not build in a day. You should absolutely minimize the cost of gaining experience.

I blew my first acc. exactly because of the same problem and I might say this is a very serious one, It is a secure way to bankruptcy:

With Risk Reward 1: <1 you need to have a very high rate of profitable trades which is very difficult to obtain consistently even if you are an experienced trader.

You need to test different techniques and become confident in the application of the best one for your trading style.

I prefer to trade breakouts therefore I adopted the following techniques:

1. If price moves my way I move the stop just above the consolidation areas or completed reactions forming in smaller timeframes.
Close position when target is reached or in case of RSI (or other momentum ind.) diverges or breaks its trend line.

2. If price moves my way I move the stop at the break even level and forget about the trade for some time.


Take it easy and do not frustrate yourself.

ap.

[FX_Sniper]

Hi there Robin Hood

Long time no see buddy

I was distracted from trading for a while about 3 months ago by some other project, and am now getting my ducks in a row again. It would seem that I have mild symptoms all of a sudden similar to yours. From what I have learned in the past I can offer the following pieces of information for you to ponder about.

In the first place, if you are hopping between systems, this could be a good cause to your problem as you are not allowing yourself to get WELL acquainted with a particular system, well enough to trust it properly and have good confidence in trading it to it’s fullest. I thus concur to some of what “AP’ is sharing about his experience in the above post. After my distraction of late, I got back into the market with a modified version of what I used to trade successfully before, I believe this to be the root to my similar problems and am now working hard to get back to where I left off. The closer I get to this state, the better it seems to be going.

Secondly, you might be experiencing another reckoned to be “evil” in trading circles namely an uncontrollable subconscious thirst to be correct more than being wrong. I guess this comes natural to almost all. Some are just able to control these thoughts better then others, depending on your personality type and a host of other psych stuff. If this is in fact the problem, well then you will need to look deeper into yourself for the solution… I would suggest some easy going NLP if you are really serious about fixing it then. The internet is an over-flowing well of such info.

A final thought/suggestion relates to when you have identified the cause to your problem and decided upon a solution to solve it. During your period of “mind training”, start of by trading abnormally small lot sizes, with O A N D A for example you can trade something simple as 20c per pip for example. A trader’s reaction to market action is most often directly related to the loss potential… I am not saying you are over leveraged etc. and no one can make a living with 20c per pip trades, but while your mind is in training, you need to start if off with baby step’s just like learning to walk…you might very well find you are holding on to your winning trades longer because you are feeling differently about the position due to the size of it…you might not make a lot of money during this period (and it is not the purpose of it anyhow), but you will get used to your system going your way the way you thought it would and gain confidence to trust it.

The first thing I would recon you need to do now is figure out the CAUSE to this situation…is it to big lot sizes, of perhaps the lot sizes are small, but you are under funded, is it more psychological such as my theory about wanting to be correct most of the time, is it more personal, a situation at home/office that is somehow getting to you without you knowing it (this sub-conscious mind is quite a clever fellow and hides a lot from the conscious mind), etc. etc.

Only then can you start looking a a solution.

Hope to hear from you soon and follow your progress, and don’t be so scarce

Good luck and happy hunting

The REAL FX Sniper

[RobinHood]

Hey FX Sniper,

Never thought you're still around

Yes, I agree with the order in which you suggest things should be done. I have been giving this some though and I think the reason for my bad behavior is none other than circumstantial pressure. I have decided to trade fulltime and I guess the pressure to perform could be the culprit here.

Concerning a solution, well, I honestly do not know what to do about it.

Nice hearing from you again and thanks for you input.

Take care

Robin Hood

[RobinHood]

Hi all,

Could anyone please recommend a freeware source for live 10minute Eur/USD charts, I honestly love MT4 to bits, but as you all probably know, it does not support this time frame.

I have tried VT, but find the feed unreliable at times. I have Metastock and TS2k, but without feeds.

In an earlier post I undertook to flip up a timescale after entering a trade, to get me away from the mini volatility of the 5 min charts after entering. 10 Min on my VT charts seems to be perfect for this challenge but not 15min...

So any guidance with regards to this would be greatly appreciated of course. Anything goes, a demo account with a broker who has software that can show these charts etc...anything.

Take care and thanks in advance

Robin Hood

[el cid]

Quote
Why do they do it? Because they know, from high up, your trade, how cool you might think it is, how right, how perfect a signal, it is just one more random entry like a million others in the global FX market done by thousands and thousands of "gamblers with randomness" and a stop 3 times closer to it than a limit, has a three times better chance to be hit. And they then take the winnings
Unquote

By Dr Forex

[Smurf1976]

I just have my entry, stop and exit rules clearly written down for the pairs that I trade. Not too much detail, just a few words which get straight to the point. I also have a set frequency of checking the market against these rules to see if I need to enter a trade, adjust stops or exit.

The key I have found is to do it quickly. I check and adjust positions in 18 pairs in about 15 minutes including the time it takes for the computer to boot up, connect to the internet, log in to the brokers website etc. So in practice I am checking and adjusting a pair in about 30 seconds including placing the orders. This eliminates any analysis which is the point - just follow the rules and do NOTHING else.

If it doesn't meet the rules then, no matter how good the setup looks, I ignore it. NO flexibility - if my rule says that the RSI must exceed 80 to enter this trade (for example) and it has only reached 79 then move straight on. It takes maybe 2 seconds to find that one of the rules hasn't been met so I don't even look at anything else for that pair. The rule hasn't been met so MOVE ON - NOW!!! The analysis has already been done and is in the rules - if any rule isn't met then forget it. The system is completely mechanical with no thinking required. This solves most problems of exiting trades too early etc but you have to accept that sometimes a profit will disappear. But this is factored into the system and I know what to expect in terms of drawdowns, run of losing trades etc. so nothing to worry about.

[bearprofits]

Robinhood,

Deal with this myself a bit. Sounds like your micromanaging your positions way to much and your uncomfortable with the risk. It’s important to manage a position to breakeven as quick as possible ( at the same time we need to allow enough room for the trade to breathe, this is in the mechanics of your trading plan) once we can get the trade to break even then the emotional side should be released there’s no risk and only potential gain. At that point we only need to adjust our profit stops as the market moves in our direction towards the target. At this point if your watching the screen, get away. The market usually charges back towards the last good entry, to pick up more players and to squeeze out the weaker hands, it’s all about emotions, fear and greed, we need to learn to trade without this baggage.

Try multiple lots dropping off a little to cover stops and pocket a few pips early and leave the rest to run. Mainly, imho, one needs to be comfortable with the risk for each trade. Fxsniper had a good point about reducing the size of you trades I am doing this and I believe it helps.

Posted this in another thread but it applies here as well.


durgesh 147,

Interesting thoughts, a couple of bear brained blunderings if I can chime in,……. we battle the markets and ourselves.

First battle is the markets, and the mountain of information to process and from which to derive a trading plan. Be it mechanical or analytical this information is a tool to use to extract a profit from the markets. Like any artisan or craftsman we have a need to understand the tools of our profession, knowing which tool to use when, what their limitations are and how they are constructed. This knowledge could be gained from reading but the master craftsman knows his tools by touch. Traders need to take this approach with their trading, understanding their edge on the markets, intimately.

Secondly, we battle ourselves or better yet, our faults and limitations. A 200 pound hammer is no good, if I can’t lift it. Our tools need that custom fit to our personality, or their sharp edges will harm us. If my trade plan calls for a stop or risk that I’m uncomfortable with, to take this trade is suicide, my own fear will cause me to act irrationally, by closing too soon or hesitating to close when the market proves me wrong.

After we learn how to trade the rest of the battle is against ourselves and how we handle adversity. ( here’s the battle that this ol’ Bear is fighting) To me the secret is not dwelling on the negative but on the positives of my trading. Not to take away the continual need to always reevaluate our performance, but there is a time when we have to trust the tools we have, or get new ones. We know that if we trade like we should, follow our rules / self discipline, our edge / system will produce profits, we also know, because we know this edge / system like the back of our hands, that there will be losing trades, it’s a part of business.

Imho, when we focus on the negative, we trade in the negative, our emotions are geared to limit our loss not maximize our gains. When we accept the loss, at the trade inception, then we are free to trade as we should.

Once we can trade in a successful manner, we see ourselves doing the right thing and manage from the expectations of a positive outcome, not the opposite.

Hope this helps, GL

Just a poor bear’s thoughts,

[RobinHood]

Hi there folks

Yes a whole week has past and I have applied some of the advice I received from all you generous people.

Smurf1976, from your post I might take onboard perhaps the speed of analysis issue… I think I understand the logic behind it, correct me if I’m wrong, but it sounds like applying such a technique kind of prevents a persons mind from getting the slightest chance to become to analytical and either talk myself out of a good trade or into a bad one kind of a thing. I only trade Euro though, so I might just minimize my charts or something, dunno how I can apply this yet, but it does have potential somewhere along the line for me as I understand why you are doing it…will reflect on it a bit more though.

Bearprofits,

I coincidentally did all the things in you post from Wednesday morning until my last trade Friday, I took FX_Sniper’s advice to drop lots off at intervals and changed my exit system in such a way that I basically have 3 drop-off points, the first one gets hit about 85% of the time the second one about 50% and the third one about 25% of the time, by the looks of my manual back testing. My entries are totally unique to my own thinking but my exits are based on the COP,OP & XOP calcs. from DiNapoli. They seem to fit my system like a glove because I enter or try to enter on dips, usually the first dip after a potential trend reversal trying to catch the major third leg of a new trend. I use an indicator to time the entries and set my initial stop loss level and first and second take profit levels all in one go, so when the trade triggers on the platform, it is all set.

For example, I would go long with say 3 lots, then at COP level, I would have a Sell order resting to take off 1 lot, at OP another Sell order to take off another lot, the third Sell order I would place manually later on if it looks like there is enough strength for it to be reached. The moment COP is hit, I move to break even +1, like you have also suggested. I found that mentally this helps me a LOT, I have some pippies in the bank, and the other two targets have ZERO risk and ZERO costs basically, or at least that is how I argue the matter in my head, having this argument well printed in my mind changes its thinking pattern from protection mode to a more accommodating mode where I do not feel the pressure of risk anymore as I already have some pips, the rest is a bonus for sticking to my rules basically and costs me nothing but a little time and some bandwidth.

To make a long story short, since I started doing this on Wednesday, things have improved drastically. I feel a lot better and calmer when in trades. I do my morning pages which helps a ton load, Never knew writing things down like that would ever have such an impact….my mind is clear for most part of the day and the thoughts about all the junk in my regular life just do not come back to haunt me during my trading session. I even find typing here on the forum almost therapeutic. I have typed out my trading plan and stuck it on my notice board….somehow this visual and practical exercise has also triggered some positives. From averaging about 4 pips per winning trade due to exiting to quickly, I am now averaging about 11 pips per trade. This to me is a HUGE improvement. My stop losses are still 6 points.

I know there might be folks arguing that my stops are to close etc…but they where dynamically chosen based on my entry’s strength. I kind of scalp or very short term trade the 5 min charts, anything more than 6 points would show clearly I was wrong…the 6 points sometimes become less, could be 4 even depending on volatility to which it is linked, 6 is however the max.

I am so glad I came to the forum for help and can not thank you all enough for all the input and suggestions…I will keep posting my progress here and how I am adapting to better myself. Perhaps some one else would also benefit from this adventure.

Once more thank you all for generously sharing your thoughts.