Basic Spreadsheet Tracking & Trading Psychology Tips

Thank. You all for being here I say, this every year but I love, meeting everybody in person it is so great to get out from behind the screen names and just see faces and, this. Event really energizes. Me every year. Today. I want to talk to everyone about, two, things that get questions about quite. A bit I'm tracking, setups, which i think is a big edge for me and also. Trading, psychology tips, because I think the mental side of trading is one of the biggest challenges, before. I get into that there. Is one thing I need to talk to everyone about and that, is a person that I call Nigerian. Timber Thani and, I, call him that because someone. Sent me a screenshot of a facebook, messenger conversation. Where, they were talking to an account named timber Thani and, it had my photo and the, location, was Nigeria and, this. Has been a big problem in the trading community lately, where there is a scammer, or scammers, who. Are making, fake accounts, of myself, Tim Sykes Ducks other big traders and they, are reaching out to people trying. To scam them out of money saying. You, could either wire me money and I'll trade your account for you and I promise you X returns or, I'll. Mentor, you and, for, mentoring you just, send me this money and a, lot of the times the key tip-off word here is they say send it to my Bitcoin wallet which none, of us will ever say so. I just want to tell. Everybody be really careful who you're talking to. I don't. Do any private, social media messaging, at all I mean this happens on Facebook Instagram Twitter I don't do any of that I can't, speak for ducks or sykes or the other big traders but. I can tell you that none of us will ever say send us a private wire transfer, for any reason if. You are interested, in our services our products, any of that go, to our main websites but don't ever send. Bitcoin. Or a wire, transfer to someone's personal account I just. Really want to make sure that nobody, else gets hand by that so. Now that that is out of the way I will, get into tracking. Setups first and, tracking. Setups let me just start from square, one what. Do I think about when I want to track a new setup. The first thing I need is I need very. Clear, criteria, what, does the stock have to do to qualify under. You. Know a specific, setup and, I have names for my setups overextended, gap down molted a breakout. Parabolic. Short you know all of those things have, their own sets, of very specific criteria and. I. Decided, it would be a good exercise to start tracking something, that I've heard about pretty much my entire trading, career that I'd never really put numbers to before the. Idea that if a stock has a big, strong, first green day it's likely to gap up the second day I've, never really, looked in-depth into that and I was curious what are the odds that you get that gap up what are the odds that you'll be profitable, so. Let's talk about the criteria. That I put out for that and these are just my criteria these aren't right or wrong criteria they're just what I settled, on so. I only wanted to do it for listed stocks there's, differences, between listed and OTC stocks and, I just decided that listed, stocks for what I wanted to track for this example it. Had to be day one of the move that's what I'm tracking I don't really want to look at day two day three day four because, the further into the run it is that, probably, changes the odds of whether it gaps or not so for now just day one I, want.

It To be very volatile, so, I said just 50%, just kind of randomly picked that number I want it to be up 50%, or more on the day and. I want higher-than-normal, volume, that, one you know I don't I don't have a strict criteria not like ten times or twenty times normal nothing like that it's just kind of I look at a daily chart and I make a judgment, call. Same, thing for closing near the high of the day I don't I don't have a firm number for what near high of the day means you, know if I was forced to say something I would say I want the daily candle to have closed in the upper two-thirds of, the day's range and. Then also under $15, because that's just the price range I'm more comfortable with so. This chart here on the right is a pretty good example of what a good day one might look like and the. Question was simple what, if I started buying these right, at the close and sold, right at the open the next day you know whether it gapped up or down I mean, right at the close I'm out right at the open what, would the results look like. And this. Is a picture of the tracker just. Very basic information this, is kind of bare-bones for me I've gone far more in depth on other setups but. Just the date the ticker, the. Day of the day one where did it open what was this high what was it slow what was its close how much was it up on the day and then. The next day open. High/low, close and. Then just, I run some formulas, over on the right there to get some ideas of either odds of the gap up or, just. You know average, returns in certain situations. Now. In this specific, case here. Are the results, I thought. I might racked 44 samples when I made this slide it's actually up to 47, now and. The. Geologists, say the current, odds because I remember this sum I've got 47 samples, 19. Wins 28. Losses, so. That's about a 40 or a 41, percent success, rate. Now. That's, interesting it's less than a coin flip chance so let, me just ask everybody really quick let me see a show of hands here how many of you would take this trade 40%. Chance of working how. Many how many of you would stay far away. How. Many of you need more information. There. We go that's awesome you guys you guys did well yeah, more information, I think is the correct answer because it's, the other side of the trade risk reward so. Here are some more results, so. Like I said it wins 40, or 41 percent, of the time now. Here's. Where the risk reward comes into play let's. Take those 18 or 19 winners, as I mentioned, if. You hate taking the trade and gotten, out for a win in the cases where it did gap up your, average return on those trades is plus 29%. If. It had been one where it didn't work you know one of those 60%, that didn't work and, you're selling for a loss the next morning right of the open your average loss is minus, 13 percent that's. About a two, point two to one risk reward so. Risk reward is on your side even, though it's less than a coin flip chance, so. You take, all of those trades you add them together all of the wins all the losses across 47, samples, the. Overall, average return, on every single one of those trades, it says 4.2, percent here, but given the if you attract this week it's actually more like 5% now. So. Average.

Returned Over 47, trades 5%. Gain that. Is actually over 200%. Potential, return now. This assumes that you trade the exact same dollar amount on every, single of those trades. So, you can't, you can't play one huge and the other small because that's. Gonna kind of skew which, way your gains go depending on you, know whether you were large on the losers or not, but. This. Really is a setup that you might be surprised to hear even, though it has these overall favorable, numbers I stay away from I haven't. Really traded this yet and you might be wondering why and this. Goes into trading psychology a little bit for me it's. Hard for me to be in a setup where I only win 40 percent of the time even. If I know that long term I'm gonna come out ahead I've. Kind of conditioned myself to, really value consistency. And have. More wins than losses for. Me that helps me trade with high confidence and. It's. Just who I am you know everyone's different you know I'm not saying stay away from this setup, it. Could be something that you can keep a scope on the big picture and you can handle psychologically. I just don't think I can and I think it's a mental trap for me so I've avoided it so far just. One other thing I want to say about these results is that of course this is you. Know past data past data doesn't always predict future results the. Larger my sample size gets the more confidence, I'll have in it just. To put this in perspective I've been tracking these since, about mid-may, so, since mid-may I've had 47, examples, that fit all of my criteria. So. Just, to go a little more in-depth on what I track and, how I track, I. You. Know I really. Have trouble telling people this but there. Is no right or wrong way it all depends, on the question that you want to answer and the. Data that will help you answer that question you. Know in this very basic example, here I was.

Saying That I was only looking at just open high/low close for, each of the two days and that was about it now, it's, still possible for me to refine this further this, is just step, one of my journey usually when I go spreadsheet, there, are a lot of tweaks I could make now I could, change my threshold, on percent gain I could I could look and see if the ones that are up 75%, on the day or a hundred percent on the day if those tend to perform better I could. Track additional, information, I could take the float of every single one of those stocks and see, if there's any correlation between the, lower the float the more likely it gaps up so. You can always add more information. I've always liked to just cast a wide net at first though I cast, the wide net, I go from there and then I start to try to narrow it down and find ways to cut out some of those losers and make it more consistent. One. Obstacle, that a lot of people have is they, say I don't really understand Excel I don't, know how to do the formulas, and my. Answer to that is take an online excel class because, you. Can do that for very cheap I recently, discovered you, to me or to me I'm still not totally clear on how to say it but, that's a website that has courses. That span thousands. Of topics, and they're. Pretty good courses, you can see how well they're reviewed and, even, if they're listed at a hundred or 150 bucks like no joke they have a different, sale every single week like, I can't remember the last time I've bought a course for more than twelve dollars so. It's a very affordable very easy way to educate yourself, on something that could really help give you an edge in the market going forward. Spreadsheet. Tracking has been huge, to my success, an, example I love to give of this he's. Back when I was first getting started trading, and one of the setups that I gravitated, towards was multi-day, breakouts, and. Multi-day. Breakouts, I. Had been watching all the video lessons the DVDs and had, the phrase drilled into my mind resistance. Becomes support, so. For, example if I'm watching a stock break, past one dollar on a multi-day chart it's a breakout I expect. That dollar level to hold perfectly I think a resistance, become support so, I start trying to trade breakouts, with this mentality and a. Lot of times what I noticed happening was the stock would dip back under that dollar mark I'd stop, out at ninety eight cents 97, cents I'd say oh this is failing support, didn't hold perfectly and.

Then An hour later the stock said a dollar 20 and, I say man I got faked out how did this happen like this this was just a really tricky breakout so. I started tracking them, I took the extra time on my own and I. Put. Him all into a spreadsheet and I started to see the pattern emerge on on paper which really helped me that. It was not at all uncommon for supports not perfectly holed in many, of these cases you. Would see the stock shakeout, just below the breakout level and then continue on as if nothing had happened, and yeah there were a few breakouts that just didn't work but. I was, able to see that too and prepare, myself to set better risk levels and I. Was off and running that was a big part of what helped to jumpstart, my growth I got, to see the difference between perception, and reality how. I thought things should be versus, how they really were and, that. Helped me start playing my breakouts with smarter risk sure. I didn't win on every breakout but. I became far, more consistent with the setup and it. Was a huge driving, force in my growth. So. I'm gonna move on to trading psychology now. Because. A, number, that has just always astounded, me is that 90 to 95 percent of traders lose and, that. Baffles, me because trading, should be a coin flip thing right like if you're looking at it just statistically. You. Enter, a trade you either win or you lose and, you do it over and over like that should come out to about 50% long run so. How is it that 90 to 95% blow, up what. Pause is that I don't. Think it's that the patterns are too hard I really don't sure, at first you're. Still learning it takes time to recognize it but. That gets easier, over time and yet. You, know we still have this huge blow up rate the. Markets may, be a bit rigged there definitely is a lot of manipulation I'm, not going to get too in-depth onto that but. You. Know despite that manipulation, I actually think that helps my odds I think that that helps make the moves a little more predictable, you know you just you kind of get a feel for how the manipulation, works and you try to play along with it.

And Also, it's not all BS and paper traders I mean there, there are successful, day traders out there so, it's not just a bunch of people faking it so why. Is it that so many fail I am convinced, it is the mental side and the psychological side, and. No. Matter where you are in, your journey that, never goes away you you. Are always going to struggle with the psychological, side of trading yes the patterns become easier, yes, trading overall can become a bit easier take a little bit less work outside, of market hours but. You will never stop having the internal, battles and keeping. Yourself in check is the most important, thing you can do so. What I'm going to talk to you about the rest of this speech is I'm going to go through a lot of psychological mistakes, that I've had to deal with throughout, my career ways. That I've dealt with them and I'm, just going to start off with a few that are kind of geared towards beginners that I especially remember when, I was starting, out. So. The first one is the follow the leader approach, I, signed. Up to penny stock and silver when, I first started and I wanted. To learn I wasn't just looking for quick bucks but, on the side I definitely. Wanted to follow whatever Tim was doing I went. As far when I was. Still, studying and hadn't treated yet I went as far as to track, all of Tim's long trades in an Excel see. What percent he had made or lost on those long trades and try to project it to my thousand, dollar account and be like okay if I just gone all in every single pick of Tim's here's, the gains I could have expected and so I can make some quick money and I can learn at the same time that'll, be great, you. Know I think that hey you know Tim Tim is the pro here I'm the newbie he knows what's up I should just follow him and. The reality of that situation was, I could never match prices the, penny stocks move too fast I'm. Not the only genius with that idea and you. Usually have a bit of an effect of a, lot, of people trying to just blindly chase and that, pushes the alert up way too fast, also. You. Know if you're in the trade waiting, for that sell alert and you have no idea what to do on your own you feel totally lost there, were a number of times where. I'd be in the trade super scared just waiting is Tim gonna sell this I'm gonna sell and, even. When Tim did sell you know it takes, for him to type out that cell alert and talk, about his reasoning behind the trade and again, there can be a lot of price movement in that time between, when. Tim sells and when the alert hits so. I never can match prices and this was just a way that you could slowly bleed away your account I really think that's the main impact, of trying, to follow the leader. At, the other side of it too is that you don't learn to think for yourself, the, idea of trade, alerts is, to, learn the thinking, behind the trade what, pattern are they seeing that's the question you want to answer and how, can I learn that pattern myself but. Blindly, following just, doesn't work so. Solutions. For this, getting. The discipline, and the recognition of this situation so, that you never follow the alerts you just try to learn from them instead. Another. Big, problem for me as a beginner the fear of losing I, get. I get questions about this one a lot in webinars people. Who you, know they feel like they can see the pattern decently and they're just afraid to pull the trigger and believe. Me I was there too I, would. Get so, psyched, out entering, a trade we're. Talking like I would be shaking my heart would be racing, like I was I was like oh my god am I having a cardiac event like it was it. Was scary. It was really, scary when I was first starting out and, I. Mean, that that is the one side of, a potential impact of being afraid to lose that you just are gonna miss a lot of trades because it's, just a really scary idea the. Other potential impact is that you, can get yourself to take the trade but, if it's not going your way you just won't cut that loss because, you don't want to lose you want to wait for that stock to come back in your favour you know it's gonna be okay eventually you tell yourself you know you just try to rationalize, some. Way that you could get bailed out of this trade, so.

What, Causes this fear, I, think it's a couple of different things one. Is that you, just have a really small account and you can't afford to lose I, think, you, know this also ties into maybe how much money you have saved up other than what's in your account and I. Really. Like. To tell people that you've gotta wait until you, have enough, your accounts, that, you don't have to be afraid for this reason I always. Believe you should trade small when you're first starting but. If you are trading small and you're still scared because you just can't afford to take the loss you're. Gonna be fighting an uphill battle the whole way and you're gonna have a really hard time making rational decisions so. I think that the best of course the action is take that time to study to. Learn patterns, you know still make the time useful, but, wait to actually put your hard-earned money on the line until, you. Are rid of a major psychological, hurdle, and you have a little bit more to fall back on. The. Other thing that I think causes it which is a little bit of rationale and I think I fell more into this camp was. Just. Kind of being prideful being, being afraid of being wrong I. Knew. That I was good at cutting losses, early in my career I knew. That I really wouldn't take any major, catastrophic. Loss so that wasn't where my fear was coming from and just. For whatever reason, that's just who I was I was just afraid, of being wrong like I had, a lot of self-worth. And pride tied. Up in. Making a winning trade I would, feel like a failure if I didn't. And. I, wish. That I had like a quick fix for that but really it just took time you, got to recognize that it's kind of irrational every. Trader is going to lose it. I don't have a slide for it this year but the past couple speeches I've done I would have had my prophet Lee chart up there and my win percentage, and in. The, last 3 or 4 years every, year my win percentage, drops a little bit I think it went from 70, percent to 69 percent to, 68 percent. So. I mean I'm probably trading, at about at 60 to 65 percent success, rate over the past few years and. I'm still very profitable, but cutting losses, is a must it, is a is a huge part of trading because that way you don't put yourself in a blow up situation. So. I, mean just, try not to be afraid of being wrong you you have to accept, that you will lose sometimes and. If. You're trading small size there's, nothing to be scared of just. Give it some time keep. Kind of forcing yourself to take these trades with your small size and that, issue it does eventually resolve, itself it got easier for me with time and that the main factor. Well. NASA beginner thing is getting rich quick a lot of people come in and they want to be millionaires tomorrow and this.

Is A marathon not a sprint, you, know what causes this, is kind, of the overconfidence. From how easy that. Video, lessons can make trading look and. Also. What, can quickly decimate, your account is if you take this overconfidence, and it translates, over into. Trying, to trade really big I really. I really cringed, when I have the new students, talking about the large accounts, they're trading and I'm. Thinking to myself you're only a month into this like don't don't trade money that will be really hard to recover in terms of real-world money it, was such, a big deal for me that my first blow up was only $1,500. Because, I worked a summer job at State Farm I made $4,000, that summer so in terms of real-world money that 1500, was no problem to try again now. If I had been trading 10,000, or 20,000, there'll be a totally different story I don't think I'd be up here today so. No. Matter how confident, you feel no, matter how much you think you know early on you're. Gonna face things in the market that you haven't seen before we. Have these plays every year that I like to call the Black Swan events where you might see a pattern that works ninety nine out of a hundred times but, then the one time out of 100 it doesn't work it, just decimates. People you usually short sellers so usually it's the short sellers who get in trouble on those, but. Yeah, like I mean the first time you face a Black, Swan event you don't want that to be ending your account and you, don't want it to be a huge account especially if it does so. Early, on you, have to assume you know less than you think you do and you, have to trade small those, I think are the two big. Fixes, to just put everything in perspective and, again just remember it, is a marathon not a sprint. So. Now some. Other more general things, that I think I would say I've struggled with my entire career, and this, is a big one FOMO, which stands for fear, of missing out so. Some impacts, that you might face if you are trading with FOMO, you're. Trying to trade everything, you're trying to trade outside of your niche setups, you're not that comfortable with you just want a piece of the action you're, forcing stuff you don't understand.

And You're. Gonna get terrible entries as a result you're gonna get really bad results as a result because. If you're trading things that aren't, your niche you're. Gonna get really. Really random results. What. Causes that I think a big part of it is social media and the chatroom culture. It. Is very difficult to. Be. Exposed. Every. Single day and. Maybe. Maybe you have one or two setups that you are very comfortable with very good at and those, setups just aren't there on any given market day, so, you're. Having a slow day you're, in the chat room or you're on Twitter and then, you see someone posting about a big game that made or, on some random big runner some people are saying hey how long this runner this is great it's going straight up and. You start to get that itch you're, like man I'm sitting here having most boring day in the world and I'm watching other people Bank and. That's. So hard to tune out you kind of start feeling like I should be doing something too and before you know it you're, in that random trade you, chased an entry I have. Certainly been there just. Takes. Time but you've got to learn to ignore that noise it. Was difficult for me my, big turnaround after my blow-up was, that I cut out a lot of setups I was focusing on my niche I was trying to only buy new promotions, only, buy multi-day break outs and I. Would go through those days I would go two or three days in a row without making a trade because my setup just wasn't, there and. I'm. Telling you it's not easy to block that out seeing other people in the chat room making money and feeling like you're missing an opportunity but. The most important, thing in trading is focusing, on yourself, that's. Not what you're trying to do you're, not trying to nail that setup you're trying to focus on the two that you're good at the two that you're consistent at that's. Your goal so. There's absolutely nothing wrong with missing something there, are so many different sectors in the market there's so many different types of stocks you can trade there's. Just there's. No way you can do it all every. Single successful trader I know does things differently so don't, try to be somebody else don't try to bank on the ticker just because somebody else is banking on that ticker you, need to focus on where you're good and you need to stick to it. Self. Comparison this. Goes along with what I just talked about a little bit early. In my career when. I was starting to be consistent, I was starting to get good I would. Have a nice day you know for me at the time a nice day was to $300. And I. Feel good about myself I would, go on to Twitter at the end of the day and. I would see a couple of top traders posting, that they made three thousand four, five thousand, and sometimes. They'll be on the same tickers is made and. It's really hard not to look at that and feel. Like you, should have done more or, feel inadequate, and, I. Mean. Again, it goes back to you have to just focus on yourself where. You are in your journey I don't, want to focus on how I profited, compared to Ducks who always trades you know ten times the size I do I want, to focus on how I profited, compared, to the last time I tried to play that set up over.

The Last few times I tried to play that set up you're looking for self growth you're not looking for how. You compare, to others everybody's. Journey is different you're, not going to have the same learning curve as somebody else you're not gonna be, profitable, at the same rate as somebody else and I. Know that we want a benchmark, we want something to compare ourselves to to tell us how we're doing but. That's not realistic and trading everybody, is so different and everybody really, trades, with their own personality. So, all, you can do is just try to take a step forward every. Week I wouldn't even say every day because, different, days have different opportunities it's, hard to look at it on that small of a scale I've, always thought in terms of weeks and. Not even so much that I want every week to be more profitable than the week before but just. That I want to come out of a week and look, at that week as a whole and feel like I made fewer mistakes than last week or you, know the setups that I had this week to take advantage of no matter how many or how few I want, to feel like I traded them well so. It is it is self reflection, you need to go for and again. Like be happy, for the other traders who post the big gains sure, but. Don't, hold yourself to that standard you know just take one step forward every, week in your own journey and. You'll get there before you know it. Fordham, trading I go. Through this one a lot too you know it's you'll, notice I'm saying like I haven't solved a lot of these I can tell you what I'll help but I'm still far from perfect and. Boredom, trading I mean potential. Impact is pretty obvious but you're forced dumb trades you. Do something just because you're looking for a little bit of action what. Causes it it's low market conditions or you know just the chasing, productivity. Is what I like to say you know you it's, hard to sit at a computer all day you feel like you should be making money you feel like you should be doing something and if. You're not it's hard to feel like you're being productive you, feel like it's a wasted day but. Don't know don't underestimate the, value of that screen time the, days early in my career I would go two or three in a row without making a trade I was, still in front of it I still, I still made myself watch, some of these tickers and how they acted and how they performed, at certain points in the pattern and that's, valuable it's valuable just to sit there and watch so, no you're not wasting a day you're not wasting time, sometimes. The best thing you can do is not make a trade and. I think it gets a little bit harder even when you get later into your trading career and you get a little bit more of an ego because you, get used to making a certain amount of money and when those slow weeks come around you. Say whoa what happened I'm not that profitable, this week and then you really want to make something happen that's, that's the mental trap I fall into lately at least and, it. Always turns into instead. Of taking my a plus setups or my B setups I really take a C or a D set up something I don't trade that often that I'm not that comfortable with and, I just sort of grab it and say okay I hope this works out and I. Would say overall in those trades I definitely, am in the red so. Potential, solutions for that, self-reflection. You've just got to look inwards and ask yourself why, am I taking this trade and really, get to the root of it you've. Got to be very disciplined, and again, it's not easy but, it. Takes a long time and a lot of work but, you can start to recognize it you. Also have to have realistic expectations. You can't expect to make the same amount of money every day every, week every month the, market, is going to have its ups and downs we. Have times, where the market is absolutely, insane, I have more plays than I can handle we have times where I want to just go back to bed I.

Mean. I have I have really struggled the last couple, of months because, of overtraining specifically, I think. The. Weed Sox have been going kind of crazy but, in. All the other sectors in small-cap land there haven't been too many parabolic, runners and that, has led to me taking a lot of boredom trades and the weed stocks and shooing myself up since, the start of August I felt like I haven't traded well and. This. Is to blame one. Thing I could have done that I wish I had done is just left the computer, even. If it is that early point in your career and you, do want that screen time if you're having trouble with the discipline I'm not pushing buttons just walk away you know do something fun for a couple hours I mean mid day long we all have heard about the midday lull there's. Nothing, wrong with going out and just getting lunch so. Give. Yourself a chance to separate, from it these, are the little things I think can help. Swinging. For the fences wanting, the big homerun trade. This. Could lead to horrible, horrible, losses or. It could lead to a situation where, you enter a good trade you got a nice winner and you just get greedy you want more you want it to be a huge win and next thing you know that win is a loss and that is a psychological. Gut, punch also. Just inconsistency. If you're trying to hit a home run every trade you're probably gonna hit a home run here and there but you're gonna lose on the vast majority of the rest of your trades, so. The. Mental causes, of this chasing. The big bin and that. Usually happens to me and during, the times of boredom, trading actually where there's not much going on in the market I'm, having a slow week and, I just want a big win to pull myself out of that slow week also. I think early, in your career it could be the potentially, it. Could be you trying to grow your account fast and. Again. Can't rush it marathon, not a sprint I did, not get to where I am by having a few big winners here and there I got here through consistency. Lots, of singles the singles add up I. I remember. Specifically, playing, the new promotions, and the, new promotions, that helped grow my account I would. Say about 75, 80 % of them would run for multiple days and they. Would go to 3, 400% something ridiculous, and wild like that I was, always out in ten minutes I would, buy right upon announcement, I would sail into the predictable, spike and that was it for me and those. Added, up fast, and sometimes. I would feel bad that yeah I sold this stock at 20 cents and it went to $1 two weeks later but. Then there would be the other plays the, ones where they announced the new promotion it, goes up about 20, 30 percent in the first 10 minutes and, then by the end of the day it's down 80% and, they. Totally just sold into it and crushed it I avoided. All of those there, were some there were some major promotion, traps I saw during, my first, year at trading and. I never got burned by a single one because, I valued consistency, over the homerun I wanted. To just be consistent gain, confidence make. A profit, that's what mattered I didn't, need to hit a grand slam every day I just needed to be consistently, profitable because that was my goal I wanted. To be self-sufficient, I wanted to be able to be out of my own I just wanted to make a decent living from trading I wasn't, trying to hit a home run every day and be a millionaire as fast as possible, that, honestly, was never a goal of mine from the start.

Revenge. Trading I go. From I go through this one from time to time also this. Especially, happened, to me after my lake lost two hundred ninety thousand dollars where. You just take a gut punch of a loss everyone's. Going to go through that I mean there's. No avoiding it in your career you're gonna take some losses that really hurt and, it. Throws you for a loop mentally, and you. Just want to make that back you feel so bad and. So for Lake what happened to me was I, started. Trading the other setups after Lake had played out that, I was seeing and, I was trading them with about five times my normal size I was, really going after it cuz I was like I'm just gonna I'm just gonna smash this trade and undo this damage as quickly as I possibly can and I, think the first trade I made after. My two hundred ninety thousand dollar loss with that really big size I think I made about sixty thousand dollars. And then I made another one like that and I lost about 70 or 75 and, I. Mean lake was my worst loss at 290 thousand I think that's 70 or 75, thousand dollar loss was it was definitely a top five or top ten loss at that point in my career and it happened within a few days and. It. Was just because I was pushing I was not trading like myself and, I. Don't. I don't necessarily think that every time immediately after a big loss you would fall into revenge, for me it's more after the plays over so, I have no problem now at this point in my career of taking. Some, big, losses on the way up of a parabolic short if. You. Know as long as I'm cutting them just. Be playing lower highs than normal, but. If, the tank day comes and goes and I miss that main play that I'm waiting for that's. When I would slip into the revenge trading that's when I would say wow the plays over I totally, screwed it up I got, to get this back so. There's a certain amount of time I can keep my head in the game but, if, I blow it at the end of the play then I totally fall into this so. The, solution, I mean again. You should be really self aware of what you're doing yeah you notice I'm repeating that a lot but it's just so important, you really have to be in tune with your inner self and figuring. Out what's going on in your own head but. A lot of times that doesn't help me with this one this this is one of the most gut punch things for me as a trader so, I have to take time off I have to walk away and.

Usually. It's a week two, weeks something, like that and it, always helps, every. Single time I just get that time to calm down and, relax and. Have some time away from the market and I, come back and I'm, no longer in revenge mode you know if you play poker you would compare it to going on tilt you. Just need some time away and then, once you get back you're back to your rational state of mind and you just get back to doing what worked for you before you've. Had time to reflect on the mistake you've had time to figure out how to fix it and. Just. Get back to business as usual and try not to repeat that mistake again. Addiction. This is one that I definitely struggle, with trading. Is very very addictive and the. Impacts of addicted. Trading definitely. Over trading because you just want that adrenaline, rush and, also. You just miss out on life this. Has been something I've been reflecting on a lot lately because, I, spend, Monday, to Friday in front of my screen from about 8:00. To, 5:00. Every day and then I'm checking my phone after hours I feel, like I can't tear myself away from it and especially. At this point in my career I don't like that I want to be able to separate a little bit more I want to be able to take a more passive approach to the markets maybe find a few more longer-term, setups. And. What causes it for me again just I love the adrenaline rush and. You. Want to be productive you want to feel like you're, in front of the screen doing all you can to, be successful, at trading and. Also FOMO that's a big problem for me too with this is you. Know if it's a slow day its midday and, I've. You, know it might be time to walk away I'm. Afraid what, if there's a play while, I'm down to the pool or while. I'm away at lunch I'm so scared of missing something, and, some, solutions for this or you just have to force, yourself away if you notice yourself over, trading every single day recognize, that pattern within yourself force, yourself to step away from the screen, also. If you have friends family or a significant, other who can drag you away that is even better. My. Wife done I'll watches me trade a lot she's around every day and she's. Developed, a sixth sense for this kind of stuff I can't. Tell you how many mornings Donna has said to me I don't think you should trade today and I say you don't know you're talking about and now I'll use money it, happens almost every single time, so. I really, do need to learn to listen to her, but. I mean. When we were down in Puerto Rico together those midday lols where we would go down to the pool together just get some time away from the screen, so. Helpful just so, helpful so, if. You're. Not gaining anything from that screen time of watching the pattern just. Pull, yourself away for a little bit you know it's okay, you don't have to be productive 24/7. You, just don't want to be in a position where you are forcing. Because. You will chew yourself up. Distracted. Training this. Is one that I experienced, for the first time last year and, the. Potential impact of distracted, trading is big losses and what. Causes distracted. Trading is negative, life events things. Outside of the market beyond your control. For. Some people it could be the death of a loved one it, could be you know someone is sick. Could. Be some kind of natural disaster and, that that's what it was for me it. Was around this time last year when Hurricane Maria hit Puerto Rico and I. I. Knew, that the condo, that we lived in was going to probably be in very bad shape after, that it was like a total communications. Blackout out, of Puerto Rico for the couple, of months a couple of weeks following, that and. I, just kind of threw myself into the market I, really. Just wanted to distract myself from that negative thing going on and have something to feel good about and, September, had gotten off to a decent start of a month and, I. Just, for whatever reason, decided you know this is the monster that I think I'll size up I'll trade bigger and I want to try to have my best month ever because. I'm already off to a good start I haven't, had my best month in a, really long time like. This is a good time for it let's do it so. I started pushing my size and. Again. I'm just trying to distract myself from, all these negative feelings about the stuff going out on outside of the market and I. Took a string, of losses I, took I took about $100,000. Loss on him and he I remember.

Talking About that one at the conference last year up here when it was down at like $4, and, I. Took, I took a much larger short than normal on it I think I shorted it at about seven. And I. Wound up cutting it at ten lost about 100k, and I. Had a lot of other trades like that too I think I think MN KD was another one where it, had a day where it gapped up big or something and I threw a ton of size at it short and it stopped me out and I lost 30 or 40 K there and, I did this on about three or four different tickers where I just decimated. Myself and I September. Was one of my worst months in a long long time in fact, I gave back all of my beginning of the month gains and then some. And it was just because I was searching, for something to feel good about and I was really in no state of mind to trade I've. Heard about this with other traders too I know it's not just me I've heard, of people who you. Know find out that they've got a sick kid or, something like that and just, get. Absolutely, destroyed in, the ensuing month or two so. If, you can't come to the market with a clear state of mind if you're looking for the market to fix how you feel about something you. Shouldn't be there at all it's, okay to step away during those times, again. I know you want to feel productive I know you feel like you should be in front of it this is supposed to be your job but. If, you're just gonna do more damage than good don't be their. Main. Issue stubbornness. Took. Me a long, long time to work through this one. Potential. Impacts, big. Losses and. A trading career. And. What causes it not wanting, to admit defeat. Or. Your current loss just feels big what I mean by this is, sometimes. We sort. Of accidentally, find ourselves in a situation where, maybe we sized into something a little too big and. Hits the point of our stop loss and we know that hey it's time to get out of this like the chart is not right, but, you look at that number of how much you'll be down if you close that trade, and, that.

Just Does not sound good to you and, it's which just kind of flips in your mind where. You say you know what I'm, just gonna wait for the market to hopefully, fix this maybe. Maybe I'll get you know for me it happens a lot when I'm short so I say maybe I'll get a pullback I can cover in two and lessen the damage but. Yeah just that switch flip moment where you know maybe $5,000, loss feels bad and you're like well 10,000 is gonna feel just as bad so why not just give us a chance to work out. Also. I hear the excuse a lot I got stuck there's. Only one time you maybe would get stuck and that's if you're in something overnight and they release surprise news there's not a lot you can do in that situation that, might happen from time to time but. Getting, stuck is not my, stop-loss is coming on I've chosen not to cover and now, I'm down a lot and I just don't want to you. Always have the choice to push that button you always have the choice to get out like. I said I went through this for a long time I took, my 290, thousand dollar loss on lake because, of stubbornness and because of fighting it and trying to fix it and that, loss sucked and, I said to myself okay, well I just took that loss I've learned my lesson that'll, never happen again and, six months later I lost 180,000. On PPMD and. I said okay well I'm a little surprised this happened again but I've. Got it this time won't, happen again and three, months later I lost a hundred five thousand on TANF, and every, time it was the same mistakes I would get stubborn and then I would fight. And. Here's how I dug myself out of that mental hole this, was not a one-day, fix even, three six-figure losses couldn't fix this for me so. How did I fix it I held. Myself accountable. I made. A spreadsheet, after. Reading a trading psychology book. A hundred. And one what. Is it trading in the zone. Yeah. I'm. Blanking on it. That's. It daily trading coach 101, lessons, to being your own trading psychologist, that's the book I read Brett. Steen Barger very, very good read and it gave me the idea for this spreadsheet to track my losses not.

Every Single time I lost but every single time I made a mistake and. I, forced myself to sighs way down to, sizes that, were smaller than anything I had traded in a couple of years. And. That was not easy it was hard to see some prime setups and playing, with what felt like puny, size but, I knew I had to fix my discipline so. Every, month I would. Go through the month I would tally my mistakes and at the end of the month if I felt like I did a good job I could increase my size a little bit the next month I felt, like I did a bad job my. Size had to stay the same or, go back down. This. Was about, a 10, or 11 months process, for me and if. Any of you have seen this on my youtube channel you. Would just search timber Thani to find my channel I chronicled. These months at the end of every month I would do a recap of my month mistakes, I had made how, I felt like I performed, how I felt like I could do better. And like. I said this was not a one-day fix this was months of work but, eventually I got my size back to where it it used to be even larger and, I had completely, killed the stubbornness bug in my system, I broke the bad habit, now, yes I still take large losses sometimes, and that's, really more due to the mistake if I trade something too large, TLR. Why gave me fits over, the last two weeks I probably. Took about six, or seven $30,000 losses on that stock it chewed me up good but. The key on that one was as bad as those losses felt every, single time my stop hit I was out I never. Went on the ride and that thing went to $300. I was trying to short it as early as eighty can. You imagine if I had about, an eight or nine hundred thousand, dollar position on that it $80. And I rode that 300. That. Would have been I, mean a mind-blowing. Record, loss so. Thank. God I don't get stubborn anymore and. If. You struggle with that I really, recommend doing something to hold yourself accountable, maybe, it's tracking in a spreadsheet like I did I don't know but. Be. Ready for a long journey and really. Really, having to work towards it because this, is the main thing that takes, SAP traders it could be a beginner trader could be a veteran trader I've seen all levels, of trade or get hit by this and. Again, it just takes that one play out of a hundred the really rare one the thing you've never seen before where. You didn't cut a loss and it destroyed you don't, ever put yourself in that position. So. Some concluding thoughts on the psychology. The. Emotional side of trading it never goes away some. Of these issues they will get easier with time but. Don't expect to wake up one day and say oh I've, solved trading this is the easiest thing in the world because, that's not going to happen that's not a realistic expectation it's. A daily battle you, have to look inwards you have to hold yourself accountable you have. To reflect on why you're doing what you do at. The end of every day just take five, minutes it doesn't have to be right after the market closed it could be that night before bed think, about your trades think about the actions you took see if you can think about mistakes, you made during the day and again, not every loss is a mistake, a mistake. Is not cutting a loss a mistake is playing too big but, sometimes setups just don't work so don't kick yourself because you took a loss kick yourself because you made a mistake and try to fix it if. You hold yourself accountable if, you track the stuff in a spreadsheet if, you strive for better every month I think. You can slowly start, to overcome these issues or at least greatly improve them one by one thank, you guys.

2019-04-08 17:22

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