{"id":43531,"date":"2016-05-02T11:18:54","date_gmt":"2016-05-02T15:18:54","guid":{"rendered":"http:\/\/www.smbtraining.com\/blog\/?p=43531"},"modified":"2016-05-02T11:18:54","modified_gmt":"2016-05-02T15:18:54","slug":"an-antidote-to-trading-on-tilt","status":"publish","type":"post","link":"https:\/\/www.smbtraining.com\/blog\/an-antidote-to-trading-on-tilt","title":{"rendered":"An antidote to trading on tilt"},"content":{"rendered":"

\"antidote\"<\/p>\n

I received this email today from a veteran and *very* successful independent trader.\u00a0 He sends me his thoughts on his trading each day, which I really enjoy reading.\u00a0 And I share some feedback, where I can help.<\/p>\n

Remember, these are the thoughts of a very successful and veteran trader.\u00a0 If he has them, then certainly many of us have the same struggles and thoughts as well.<\/p>\n

I\u2019ve traded on tilt this week and taken a really big hit. I was overly bearish and thought that any rally we saw, we would eventually see lower prices. That\u2019s probably true, but I was misjudging my risk\/reward and then let the pressure get to me and force me to keep trying to catch the trade with big size so as not to admit the loss. I obeyed my stops on my individual trades perfectly, but that does nothing when you just hop back in the same losing idea 5 minutes later and take another relatively small loss and do that 10-12 times a day.<\/p>\n

I started on simulator on Tuesday, as I said I would. However, after we got the morning drop, I was pissed I\u2019d missed it and convinced that it was the start of a larger down move. I opened my account and started shorting and just got run over again and again over on Tuesday and Wednesday. I\u2019ve shut down and am taking the rest of the week.<\/p>\n

This has really shaken my confidence to the core and will require a good while to work back from both from a P&L and a mental standpoint.<\/p><\/blockquote>\n

@mikebellafiore<\/a><\/b><\/p>\n

An antidote for the experienced trader to having one of this crushing days<\/a> both financially and emotionally is to set a daily stop loss.\u00a0 There are a few big traders on our desk for who nothing good happens after they are down more than 10k.\u00a0 Find that number in your trading if you are experienced. Set that as your loss limit<\/a>.\u00a0 Empower someone, usually a risk manager at a prop firm, to shut down your trading when you have reached this daily stop loss.<\/p>\n

For swing traders, you can do this as well.\u00a0 Allow yourself a weekly stop loss.\u00a0 We recently switched an experienced swing trader from a daily stop loss to a weekly stop loss, much to his happiness.\u00a0 If you hit this number, then it is time to shut it down for the week.\u00a0 Of course these numbers should reflect your drawdown from when you opened a position.\u00a0 If you were 20k in the money and then gave back 5k then that needs to be handled differently than straight losses from open positions.
\n<\/b><\/p>\n

Notice how these financial losses have affected the psychology of the successful veteran pro trader above.\u00a0 During earnings season and with markets near highs was forced to take a time out.\u00a0 By not following a daily stop loss, trauma was born.\u00a0 And this caused him to miss other trading days and other trading opportunities that might have been the best of the month.<\/p>\n

There is a reason why coaches pull players out of the game.\u00a0 They are playing poorly and harming the team.\u00a0 All of us former athletes know that some days we just cannot make a shot.\u00a0 Have a stop loss and empower someone to take you out of the game.\u00a0 On this day you stink.\u00a0 But that doesn\u2019t mean that you do stink.\u00a0 And don\u2019t allow a bad day, where you just are not seeing markets well, to be more than just that.\u00a0 One\u2026 Bad\u2026 Day.\u00a0 Don\u2019t let one bad day turn into one bad week or one bad month.\u00a0 It can if you do not limit that bad trading day.<\/p>\n

Related Posts<\/b><\/p>\n

Try automated stops<\/a><\/p>\n

The right daily stop loss<\/a><\/p>\n

How to deal with the frustration of trading losses<\/a><\/p>\n

*no relevant losses<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

I received this email today from a veteran and *very* successful independent trader.\u00a0 He sends me his thoughts on his trading each day, which I really enjoy reading.\u00a0 And I share some feedback, where I can help. Remember, these are the thoughts of a very successful and veteran trader.\u00a0 If he has them, then certainly many of us have the … Read More<\/a><\/p>\n","protected":false},"author":144,"featured_media":43532,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[4958,1823,38],"class_list":["post-43531","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general-comments-2","tag-antidote","tag-tilt","tag-trading"],"yoast_head":"\nAn antidote to trading on tilt | SMB Training<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.smbtraining.com\/blog\/an-antidote-to-trading-on-tilt\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"An antidote to trading on tilt | SMB Training\" \/>\n<meta property=\"og:description\" content=\"I received this email today from a veteran and *very* successful independent trader.\u00a0 He sends me his thoughts on his trading each day, which I really enjoy reading.\u00a0 And I share some feedback, where I can help. Remember, these are the thoughts of a very successful and veteran trader.\u00a0 If he has them, then certainly many of us have the ... 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