Sounds like you were all over the map as you were being buffeted around and confused by the market. I think your major obstacle is you! You need to develop better discapline and focus. And instead of abandoning a plan that worked for you, I think it is better to augement or change it. This may mean learning to identify the markets your approach works and only trade those markets. Attempting to be "right", which is what you are trying to do by making profits in all types of markets regardless of initial objectives, plan, and experience, is vain and unrealistic. I feel I can say this to you because I have been there. :-)
Without developing patterns to your behavior that will allow you to work on your focus and discapline, you will always find yourself overtrading and gambling. Overtrading also can mean that you are attempting to scalp, which is also supported by comments later in your post. As mentioned earlier by a very reputable poster who scalps successfully, this is not a good approach to be used by the beginner. Scalping also takes a very high degree of the focus and discapline that you need to be working on. Perhaps later in your trading career you may want to try scalping.
Additional observations:
1. IMO you will not survive your learning curve when you are undercapitalized or feel that you have time working against you, like needing to pay the bills. You should not be trading until these two problems are resolved.
2. One reason traders give profits back is they end up getting a bit overconfident. Once again, this is a focus and discapline problem. Another reason is that the market later in the day tends to slow down and congest leading to "false" signals. This is another major downfall of beginner (and experienced) traders alike, and that is being able to recognize when a market has changed, in particular when it is moving into congestion. Congestion can be a source of many "false" signals for the trader that prove not to be false when the congestion is recognized by the trader.
3. As far as the three areas you noted you need to improve in which is trade less, be more choosy, and possibly quit when you have a decent profit (in other words meeting your daily profit objectives), there is one most important thing you failed to mention. That is having a PLAN. You have referred to it as a trading style that you are having a problem settling on. Since you attempt to be trading without a well-defined and proven plan, you are going to lose you money. And changing ill-conceived plans on essentially the prevailing behavior of the market will move you down the road to disaster even more quickly.
So my solution would be to STOP trading, reevaluate your personal situation to see if it is feasible to trade at all, and then develop a trading plan which can be proven before committed money of any significance. And certainly NOT use your failures to motivate you into day trading. If you cannot handle position trades due to a lack of focus and discapline, day trading is an entirely different animal that will eat you up alive and spit you out, leaving you to wonder what happened to you as you look at your empty account. I have seen many frustrated people go in this direction for similar reasons with the delusion that they will have more "control" in their efforts to solve their problems. But they fail to include one very important part in their thinking, and that is themselves. The real problem is to be found with themselves. Day trading definitely brings out the worst of a person in their approach to trading, for the success in this approach to trading counts much more heavily on the psychology of the trader themselves. While position trading is mostly finding a workable plan that a person can execute profitably in the market, day trading for the most part is all about the person themselves. And any flaws that can influence your performance will come out in full living color. Finding a workable plan turns out only to be LESS than half the problem.
I hope this helps. You DID say that you did not want us to go easy on you? :-)
The best of fortune to you!
Bob Graham
PS: There is a book by Mark Douglas you may be interested in that covers the psychology of the trader themselves that is very illuminating. I am attempting to find a complimentary book that goes into concrete and very workable ways in how a trader can modify their behavior. |
