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Jacbravo as you know I focus a lot on the mental approach to trading. You are exactly spot on with the premise that price is going to reach a target. It always does, every single time. The issue is the expectation vs reality dilemma we constantly battle with. Here is a little image I did to illustrate:
One thing I can see is that you have correctly identified some key aspects of yourself.....what all of us go through. The thing is that you are using that information in the wrong way. It will be more useful to you if you use it in constructive ways instead of beating yourself up over it.
So what does this mean?
Well when you enter a trade you have to know that price is going to wiggle its way to target and you are probably going to be underwater for a portion of that time.
1. If you are targeting 50 ticks then you cant balk at the first 10 ticks that go against you.
2. You cannot tell a story about every single price bar. You are giving your mind far too much freedom.
3. You can expect that price will go to a target but you must know its going to squirm its way there.
Here is a trade I took this morning. Im only sharing this to illustrate how simple my approach was prior to this trade:
1. Price has been trending up.
2. The trade line has obvious liquidity and if it digs in again I am going to join.
3. My target will be at or near the previous swing high (because I dont know how much longer this is going to collect for).
4. I know that price wants that higher timeframe level but I also know that I am not comfortable sitting through the wiggle so I will set a modest target.
Thats it. There is no other analysis or reason attached to price movement. I anticipate a push higher but I know the reality is going to be messy. If you look through the crazy choppy seemingly random price movement you can see the obvious pullback and continuation theme.
Am I irritated that I didnt hold for that higher target? Yes! But it wasn't the plan. So, so, suck your toe. This trade was 114 ticks for me and thats where it ends. Im on the lookout for the next opportunity. No stories, no deep analysis, no reasons...just simple stuff. On the next opportunity I know that my mind is going to mess with me but I expect that as well. Charting is easy so focus on what your mind is doing.
hth.
Good luck bro.
So my definition of 'liquidity' is the place where sellers are not willing to push through and where buyers are congregating. Vice versa for the other way around.
Its why I say that individual candle analysis is not very efficient imo. Context is everything and you have to have the patience to wait for the story to unfold. I read a great quote the other day:
'The mark of the trained mind is not to expect more precision than the subject matter permits' Aristotle.
This so elegantly applies to trading. Technical charts are so simple and you must resist the urge to explain whats happening because this tendency will lead to you being overly hard on yourself when its not working out. just do what its telling you to do.
Thanks for the excellent write-up and supportive language. You're right, it's the mind that I'm battling (why brain, why??)...falling for the tangles and tricks of each candle. I do recognize it's about context, as @Inletcap used to say. Implementation during real-time though is difficult, as I don't have concrete rules developed yet (but it's coming!).
What I'm trying to sort out is a concrete line in the sand for when I'm wrong. For example, in your chart, if I had gone long on that first big break out, would I have been able to identify a line in the sand, then wade through the negative excursion? Probably not, so the 2nd thing I'm trying to hammer is once I have a line in the sand, what's the closest, most reasonable place I can enter? And what do I do if I miss that entry, do I go in late and risk more wiggling, or just stay out?
I'm caught too often doing this. But in my brain, I'm trying to do what you did. So my immediate next steps are:
1. Where is a good line in the sand with respect to the story from the chart?
2. How close can I enter to that line?
"It does not matter how slowly you go, as long as you do not stop." Confucius
@jackbravo
I share this because I know exactly where you are at and I struggle with these things every day. Just the same as everyone else does. So this all applies to me just as much as it does to you.
You are too focused on the minutae of the market. You need to step back a bit. The problem is not levels or identifying what goes where. It is that you are trading with a fear/protection mindset. What Im saying is that you are approaching this with the intention of avoiding losses. You have already clearly defined what you are doing wrong. Use those lessons to your advantage but don’t make your home in that place - you need to start defining yourself by the vision that you want to become.
So easy to say but how do you do it? Ill try and explain what I do.
You need to start from scratch again. Can I suggest that you get onto the lower timeframe, disable all trading, and simply watch price movement. This will give you the opportunity to observe price action clearly without the pressure of trying to find trade locations. The point of the exercise is to become conscious of your unconscious thoughts.
You might start getting things like: I would have done this, I would have done that, this looks good, see the manipulation, god whats it doing, this is just so random and impossible, why cant I get the levels right....etc.
These questions and uncertainties you have while looking at the chart is your subconscious programming revealing itself to you . This is what is holding you back. Because how can you become that successful future vision of yourself when you are living in your past negative state?
I know people will call me out and say this a load of horseshit. Its a chicken and egg scenario – is it a proper trading method that brings about positive belief or the other way around?
My belief is that you can have the best trading method but if you trade from fear and uncertainty you will never get it right. Fear causes hesitation. Fear causes FOMO. Fear causes missed opportunities. So the first step is an awareness of the mental blocks. Once you accept and start to deal with the negative mental habits, you will start to execute your trading from a position of confidence.
Ill leave you with a chart I saved this morning highlighting my plan. The reasons for the levels are noted but what is important to me going forward is whether I have the confidence to now trade from those levels
I think I'm gonna hang it up for this year too, been surprisingly busy in the shop and hitting my max drawdown really took the wind out of my sails. Looking for a fresh start next year, I apparently don't take real trading seriously enough and SIM even less, so I'll plug more money in the account... in the meantime, double down, figure out what I was doing right/wrong, and refine the process.
January might be a better month for a friendly competition anyway, since you're not missing out on a week+ of action.
@jackbravo, stick to your guns bro. You can do this.
@Grantx Cheers, buddy. Thanks for the response. I am very much fear driven due to previous losses. Actually, it cycles between fear when I'm on a losing streak and greed when I'm on a winning streak. Both bad. Will plan to be a little more balanced in the new year. Happy holidays to you and your family.
Thanks @FlyingMonkey and all thread participants for the interactions in the thread.
I guess the competition is over? I'm not sure what @JMP3's totals are, but he's the only one I've seen post a positive PnL, so I declare him the winner.
Congratulations @JMP3! If you post your avatar pic here, I'll substitute it for mine.
"It does not matter how slowly you go, as long as you do not stop." Confucius