A problem that might haunt you at some stage of your trading
There is a certain human mental pattern of behaviour that might occur to you when you start live trading or in some stage of your trading. It may even happen to some people while demo trading.
When you are having a losing day you will be more prone to take more trades and suddenly you will find that taking a trade would become so easy. This is because you want to either recover your losses by trading more or you are engaging in “Revenge trading”.
But on the day you have your first few trades as winners you will, all of a sudden find it hard to take more trades. This is because you are protecting your profits for the day
The former case would usually be a choppy day and the later usually a moving trending day.
When you find yourself doing this your losing days will often be double or even more of your usual winning days. In some peoples case that losing day often wipes the profit of the entire week if not month.
This is a trait/habit that is not found in consistently successful traders’, its not one of their habits or they have learnt to overcome it.
So keep an eye on this. keep a max loss for the day limit and don’t keep a max win limit. but if you want to keep a limit on the winning day then keep a max loss lets say 50 pips or 3% then put a max win limit of 5 or 6%. something along these lines. Moreover work on integrating the 5 fundamental beliefs about trading found in the first post of my journal.
(Journal is available to AIMS Members Only)