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Why not close the trade immediately once you realize that your timing has been off? (Only You will know when that has happened - you can detect the subtle shift in your emotions, and hope becomes the primary driver instead of sound logic)
You are correct that the logical reset is what we all should aspire to, each end every time. However, as Spock would point out, for us mere humans the words 'subtle shift' and 'emotions' are only rarely available in the same sentence.
Anyway, missus is out shopping and I just managed another subtle shift of +10BPI after 2 more glasses of Cava, so we're still doing ok over here.
I used to revenge trade and do it badly. Now - Like you I focus on my setups and keep my eyes on the area. I get emotional now when price comes into my area. My goal is to get my entry perfect within my plan and I am confident my prep work/ evaluation has been completed. If not I have no business being in the trade.
Once in the trade I rarely monitor it or cut my losses - I have to trust the odds. If I have 2 losers in a row though something is wrong and I will need to step back and re-evaluate what I am doing.
I also try and eliminate all distractions. No Skype no checking e-mail. Try and check in here only
after finished for the day.
Something that helps me is to play classical music while trading and I play old school vinyl. The process of flipping a record every 20 minutes is kind of a nice change to staring at the screen.
One way to reduce stress... Retracement candles start to stress me out a bit when trading! Heh... One of the major problems with very low timeframes like 5m and lower is that they get most peoples emotions wired up.
I use to filter candles with Heikin-Ashi's a little, but they strip out too much information and slightly hurt your feel for the price action.
I was just thinking about it again and created a new candle formula which strips noise like Ashi's, but has much less information loss.
My standard timing candles vs new mod timing candles below. Less noise, same signals, and better view of momentum.
Mod candles vs Heikin-Ashi's.
Anyway... Bottom line. If you have real low timeframe charts, it helps your physiology to filter the noise a bit, but go too far and you start losing needed price action information.
Why not preserve mental capital by closing the trade (since the original point was 'a state when heightened emotions start to kick in').
Mental capital is finite like actual capital and both must be preserved, short term trades or not.
Coming back to my point - why not close the currently unprofitable trade (or perhaps mildly profitable trade) when you know that you made and early entry and the timing was off.
I am not saying letting the trade go, the point is you are flat and then enter AGAIN when the entry is correct AND the timing is correct. This will allow you to take a large number of trades without burning out either of your capitals.
It's more profitable to to let the entire setup complete. Especially if it's one of those trades that only comes around a few times a day. The average day only has around three great setups using the 5m and 15m with my system.
I mean, if I'm trading off the 1m/500 Tick/1000 Tick chart... Exiting around breakeven would make sense, but otherwise... Best to just let the trade complete.
