{"id":44995,"date":"2017-02-11T12:57:12","date_gmt":"2017-02-11T17:57:12","guid":{"rendered":"http:\/\/www.smbtraining.com\/blog\/?p=44995"},"modified":"2017-02-15T10:49:27","modified_gmt":"2017-02-15T15:49:27","slug":"a-trader-struggles-with-added-risk","status":"publish","type":"post","link":"https:\/\/www.smbtraining.com\/blog\/a-trader-struggles-with-added-risk","title":{"rendered":"A trader struggles with added risk"},"content":{"rendered":"<p><iframe loading=\"lazy\" src=\"https:\/\/www.youtube.com\/embed\/m2-EMDuh4dw?rel=0&amp;controls=0&amp;showinfo=0\" width=\"560\" height=\"315\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/p>\n<p>Here is an anecdote from our proprietary trading desk in NYC.<\/p>\n<p>A consistently profitable trader (CPT) shot me an email this week to chat about struggling with a recent bump in share size and risk. \u00a0He felt he had taken a step back with his trading after being given the opportunity by the firm to take a few steps forward with his newfound share size and risk.<\/p>\n<p>His recent struggles:<\/p>\n<ul>\n<li>forcing trades<\/li>\n<li>forcing size with trades<\/li>\n<li>hitting bids to enter short trades because he could<\/li>\n<li>unease with the new numbers on his PnL<\/li>\n<li>anxiousness<\/li>\n<\/ul>\n<p>This CPT had experienced this before with recent bumps. \u00a0So we chatted about a solution going forward from here. \u00a0If not, the next bumps in the future would be met with similar struggle.<\/p>\n<p>The good news was this trader had been through this before so we shared the optimism that he would find his way forward again.<\/p>\n<p>My textbook solution, literally from <i>The PlayBook<\/i>, was to think in percentages. \u00a0He was prepared for a weekend of review to get back on track by studying his past reasons for success. \u00a0I asked if he could breakdown his past trades with edge into percentages of risk based on his intraday stop loss. \u00a0A+ trades might receive 30 percent of his intraday stop loss, as an example. \u00a0B trades might receive 20 percent. \u00a0Feeler traders might receive 10 percent.<\/p>\n<p>This CPT felt he would be able to do this and could start applying this to his new share size and risk. \u00a0All he would do was change the share size and risk in percentage terms based on his new and higher intraday stop loss.<\/p>\n<p>Moreover, it is common for traders succeeding to become overconfident. \u00a0After all, he earned his bump because he was performing. \u00a0Performing well often requires self-awareness to be careful that overconfidence will set in and infect trade decisions. \u00a0Overconfident trading can be quite dangerous. \u00a0This CPT agreed this was worth taking periodic temperature checks.<\/p>\n<p>Entering more sloppily with larger size is a recipe for underperformance. \u00a0Essentially, you want to be trading the same way you had with smaller size and risk at levels higher. \u00a0Entering shorts carefully on offers substituted for hitting bids will negatively impact PnL. \u00a0Worse you are completely changing your trading and risk your edge. Directly, I said this needs to stop.<\/p>\n<p>Using a Dr. <a href=\"http:\/\/traderfeed.blogspot.com\">Steenbarger<\/a>, trading coach, analogy of lifting heavier weights, we moved to a new observation. \u00a0When you hit the gym and start lifting heavier weights, they are&#8230;.. well heavy. \u00a0Over time your muscles get used to the heavier weights. \u00a0Just like with added size and risk, the trader through exposure will get used to this new size. \u00a0This seemed to comfort the trader.<\/p>\n<p>Talk sessions are just a start. \u00a0Now it&#8217;s up to the CPT to do the work required to push through this challenge. \u00a0He will. \u00a0He has in the past. He is inspired by watching others on the desk excel to do the work. \u00a0He is inspired to become the next High Performing Trader on the desk through smart work, talent, patience, coaching, mentoring and individual edge.<\/p>\n<p>As always, these are the stories from a pro prop trading desk. \u00a0I know they are shared by the new and developing non pros. \u00a0If our guys can overcome these challenges with solution-based techniques, then so can you.<\/p>\n<p><b>Related posts<\/b><\/p>\n<p><a href=\"http:\/\/www.smbtraining.com\/blog\/a-loud-coaching-session-on-the-desk\">A loud coaching session on the prop desk<\/a><\/p>\n<p><a href=\"http:\/\/www.smbtraining.com\/blog\/a-solution-to-improve-your-patience-as-a-trader\">A solution to improve your patience as a trader<\/a><\/p>\n<p><a href=\"http:\/\/www.smbtraining.com\/blog\/we-are-all-working-on-that-on-our-trading-desk-as-well\">We are all working on this on the prop desk as well<\/a><\/p>\n<p>*no relevant positions<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Here is an anecdote from our proprietary trading desk in NYC. A consistently profitable trader (CPT) shot me an email this week to chat about struggling with a recent bump in share size and risk. \u00a0He felt he had taken a step back with his trading after being given the opportunity by the firm to take a few steps forward &#8230; <a href=\"https:\/\/www.smbtraining.com\/blog\/a-trader-struggles-with-added-risk\" class=\"more-link\">Read More<\/a><\/p>\n","protected":false},"author":144,"featured_media":44783,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[5316,5315,4676,653,1354,1349],"class_list":["post-44995","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general-comments-2","tag-consistently-profitable-trader","tag-cpt","tag-day-trading","tag-trader-training","tag-trading-coach","tag-trading-mentor"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.1.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>A trader struggles with added risk | 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\/a-trader-struggles-with-added-risk\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"A trader struggles with added risk | SMB Training\" \/>\n<meta property=\"og:description\" content=\"Here is an anecdote from our proprietary trading desk in NYC. A consistently profitable trader (CPT) shot me an email this week to chat about struggling with a recent bump in share size and risk. \u00a0He felt he had taken a step back with his trading after being given the opportunity by the firm to take a few steps forward ... Read More\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.smbtraining.com\/blog\/a-trader-struggles-with-added-risk\" \/>\n<meta property=\"og:site_name\" content=\"SMB Training Blog\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/smbcap\/\" \/>\n<meta property=\"article:published_time\" content=\"2017-02-11T17:57:12+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2017-02-15T15:49:27+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2017\/01\/forvid.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1280\" \/>\n\t<meta property=\"og:image:height\" content=\"720\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Bella\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@smbcapital\" \/>\n<meta name=\"twitter:site\" content=\"@smbcapital\" \/>\n<meta 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