Here is how you trade bigger

intense trader

Hi Mike,

I am quite consistent stock traders for years. I have a trading matter that needs your professional advice.

I have the tendency to go ‘big’ in size when I have the profits in my account or when a particular stock that I familiar with which I had been making consistent money from it. When under this situation sometimes I will become overconfidence and take over big position for the stocks. When the stock direction move against me will lead me to big losses and sometimes wipe out major part of my trading account profits for that particular month. (this behaviour keep on recurring from time to time especially I had targeted my trading profits for particular months, quarters or I set certain rewards to reward myself when I hit the profit target). I found my overconfidence, greed behaviour lead me to unnecessary losses and unnecessary action.
I had tried to read trading phych books, write my plan, use mental rehearsal, applying hypnosis, get a mental coach  to solve the above matters.it does help a bit but…it does recur the above matters from time to time …Mike any idea to improve on the matters? Really appreciate for your ideas.

@MikeBellafiore

I like the idea of your trying to trade bigger since you are a consistently profitable trader.

In a recent webinar for The Options Tribe, I shared how one of our traders has gone from 4-6k a month to being capable of putting up over 100k in a month.  How did he do it?  For the past three years he has consistently and with a process trading bigger.  He has consistently and with a process been pushing himself outside his comfort zone with trader for which he has edge on a daily basis.

You lack that process.  You just want to start trading bigger when you have trading profits in the bank.  Why would that signal extra edge such that you would risk more?

You have booked profits that month because you are trading specific trades with edge.  Identify what those trades are.  What are their variables?  When you spot them, work on trading those setups with more size, consistently and with a process.  Think about increasing your size ten percent for a few weeks.  If you have success with this increase in size, then increase your size again.

On the strategy side, I wonder if you a fade trader.  Often I see fade traders fail to recognize that their win rate will be very high but when they are wrong, their stocks will act opposite to their thesis for much longer and further than they could have anticipated.  This is the nature of fade trading.  Right and profits, perhaps even 90 percent of the time.  And then wrong, and adding with size and turning a losing trade into a massive loss.  If so, you are going to have to adjust your strategy for adding to losers.

The good news is you are a consistently profitable trader.  The great news is you can be even better.

*no relevant positions

 

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