The great loss mechanism
I remember something being said about eggs in one basket, could this be it?
All reasoning revolves around EMOTIONS...
And this is the main mistake.
You need to completely get away from emotions and switch to purely mathematical methods of calculation ...
In this case, it is easier to optimize your strategy, both in terms of profits and losses ...
I remember something about eggs in one basket, could this be it?
If you just consider spreading the money across a lot of different brokers so that you don't promptly put it into one account, then maybe. As a protection against yourself. Trading different instruments won't do anything, because the account is with one broker.
All reasoning revolves around EMOTIONS...
And this is the main mistake.
You need to completely get away from emotions and switch to purely mathematical methods of calculation ...
In this case, it is easier to optimize its strategy, both in profit and loss ...
It seems to me, too, that the problem is that emotions affect performance.
On the other hand - emotions motivate to some actions. If you don't care whether TS will work or not - then what's the point of creating this TS at all? One wants to do something that is interesting or necessary ... And when "don't care" - it means there is no need, no interest, there is nothing that would motivate to work on improving the TS.
For me personally, this lack of motivation is the most serious problem. As I said before, in eight years of trading (soon to be nine) I haven't lost money, but I haven't withdrawn anything either. And now I always catch myself that there is no point in doing something - I've already "buried" this money, all my efforts lead only to "hanging around zero" - DTs are happy, but it turns out I have nothing to gain... As a result - no emotions, but no motivation to do something either. For a few months I've been thinking over an interesting idea, for which a week would have sufficed for writing... But it's still hanging in the air... It's the lack of emotion and motivation... It's all useless...
All reasoning revolves around EMOTIONS...
And this is the main mistake.
You need to completely get away from emotions and switch to purely mathematical methods of calculation ...
In this case, it is easier to optimize their strategy, both in profit and loss ...
The theory is clear to all, I would like to discuss practical issues, preferably with people who have experience of working with large accounts.
I am dealing with rare cases when trading rules are violated, and problems come in an avalanche. For instance, one of my rules is not to rollover a position overnight and only trade within a day, but it is sometimes violated - I guess I am built that way, so I need a mechanism to protect me from negative consequences in case of violation of some trading rules. How to get out of this situation with minimal losses.
It also seems to me that the problem is that emotions affect performance.
On the other hand - it is emotions that motivate to some actions. If you do not care whether the TS will work or not - then what is the point of creating this TS at all? One wants to do something that is interesting or necessary ... And when "don't care" - it means there is no need, no interest, there is nothing that would motivate to work on improving the TS.
For me personally, this lack of motivation is the most serious problem. As I said before, in eight years of trading (soon to be nine) I haven't lost money, but I haven't withdrawn anything either. And now I always catch myself that there is no point in doing something - I've already "buried" this money, all my efforts lead only to "hanging around zero" - DTs are happy, but it turns out I have nothing to gain... As a result - no emotions, but no motivation to do something either. For a few months I've been thinking over an interesting idea, for which a week would have sufficed for writing... But it's still hanging in the air... It's the lack of emotion and motivation... It's all useless...
It's a hot topic to add this point to a book on the psychology of trading.
Overseeing, and just waiting to see if it goes away...
No, we are not talking about luck at the first stage, we are talking about closing a position on a technical signal, for example when a trend reverses - the formation of the opposite movement of the ZZ cut-off, but then there is a reversal of this tactically correct decision. Or it happens that there is no pullback for longer than there usually is. Just focus on the statistical indicators in the first phase.
It also seems to me that the problem is that emotions affect performance.
On the other hand - it is emotions that motivate to some actions. If you do not care whether the TS will work or not - then what is the point of creating this TS at all? One wants to do something that is interesting or necessary ... And when "do not care" - this means there is no need, no interest, there is nothing that would motivate the work to improve the TS.
Break down the whole process into parts:
1. Creation of the strategy - this is where your emotions are relevant...
2) Trading - better not to let your emotions run wild here...
It also seems to me that the problem is that emotions affect performance.
On the other hand - it is emotions that motivate to some actions. If you do not care whether the TS will work or not - then what is the point of creating this TS at all? One wants to do something that is interesting or necessary ... And when "don't care" - it means there is no need, no interest, there is nothing that would motivate to work on improving the TS.
For me personally, this lack of motivation is the most serious problem. As I said before, in eight years of trading (soon to be nine) I haven't lost money, but I haven't withdrawn anything either. And now I always catch myself that there is no point in doing something - I've "buried" this money, all my efforts lead only to "hanging around zero" - DTs are happy, but it turns out I have nothing to gain... As a result - no emotions, but no motivation to do something either. For a few months I've been thinking over an interesting idea, for which a week would have sufficed for writing... But it's still hanging in the air... It's the lack of emotion and motivation... It's all useless...
By the way, this is of course a different topic, but my experience is that breakthroughs in TC come precisely after or during significant losses, when a "fantasy" of a positive exit from the situation is created. This somehow motivates me to find mistakes in my actions, in terms of technical analysis, and ideas are coming out. But I may not have enough strength to implement them - I have ideas on paper for about a year of coding at my speed.
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Almost everyone has non-systemic capital losses from currency or stock market transactions, and I am no exception. In this thread I propose to think about and understand the mechanism of these accidents to try and prevent them in the future. We are talking about significant one-off losses or a series of them. For me, this is the biggest misfortune in trading, which prevents you from earning over long periods.
Below I am quoting myself from a correspondence with a friend who is not trading, I would like you to tell me if the mechanism I have described is similar to what is happening to you at these moments when losses on open positions become too big, and if not, please describe your thoughts about it.
I know that a fully automated trading system can solve this problem, but so far I have not been able to make a decent TS that earns for years without readjustment.
Outlining my view of the situation:
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Trading is very good to see your weaknesses and is a good tool to work on them. In general there is a very strange effect, it is the denial of reality, which you do not want to accept, something similar happens with tragic events with a loved one, or less tragic with you, but very significant. Logically it's ridiculous - how can money affect your perception of reality, it's not the money that affects you, it's your attitude towards it and yourself. To me money is converted time, and time is the energy expended to get the benefits, i.e. money is part of your past time. And the attitude towards yourself in this paradigm is the threshold of comfortable error, i.e. accepting and forgiving yourself for your mistakes. The pitfall of the perception of reality in trading is that you enter a transaction and must immediately admit your right to lose money, your right to make a mistake and control your losses, your risk. But the perception of reality constantly presses upon you and makes you perceive each loss as a mistake, and as a result you strive to make no mistakes - which is normal from evolutionary point of view, but from the viewpoint of the mathematical model of trading - a big mistake. The other part of the problem is goal setting, i.e.. let's say you set a goal to earn 100k by the end of the month, and on the last week of the month you reach this goal, you are rejoicing and praising yourself - what a good job, you did everything correctly, and then you enter the market with the whole cutlet, and the market goes against you, the deposit starts to melt, you fall behind the line that was the goal for a month, you understand, your past actions begin to depreciate, and it is unpleasant, and then you fall into another trap - you want to get rid of the unpleasantness, and if it is unreal, the human psyche offers a fantasy or a hope, and so you look for options that will reinforce, feed your fantasy/hope and, of course you find that reduces the emotional experience, but instead of fixing a loss of 10k an hour after an erroneous trade, you are already living in your fantasy, which means that you can take a temporary loss (until you exit the trade, the financial result is constantly floating) and not exit the trade, it may last for several hours, or a day or more, then you do the general analysis of the market again and realize that hope is unfounded, and you lose 100k and then you start to deny the reality, go for a walk, watch a movie, do something, but just do not think about what is happening, because at this point the brain is searching in vain for a new fantasy and it should not interfere. So it may happen several cycles, and then when the loss is already 300k comes apathy and indifference and there is no fantasy, but it is a very strong stress of denial, which presses as if for no reason. Everything ends with the acceptance of a mistake, and the loss can already be 500k, which of course leads to depression.
5. Any ideas other than not doing this activity? Or does it all stress you out too much - boring and uninteresting?
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