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What is holding you back as a trader? Let's fix bad habits, leverage the good. What traits do you want to have?

This thread is going to be all about what we are being challenged with in regards to our trading habits and patterns, strategies, etc.

I’ll be posting quick questions in replies that ideally will help everyone to easily identify opportunities to improve and eliminate any bad habits/beliefs.

Please! Get involved and post everything related to improving ourselves to be better traders!
Post your weaknesses and strengths you wish to acquire.

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First Question - What is Your 80/20 Right Now?

What is one or many things that have a significant negative effect on your trading performance that can be fixed with minimal effort?

Even as something not directly related to your trade execution or plan. For instance:

“My internet is slow and I don’t usually get the best fills/data and this doesn’t fit in my trading style.”

Solution: Research the fastest internet within budget and set it as a top priority. Then off to the next 80/20 and so on.

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My 80/20 is over trading and being early to enter on larger moves.

This causes me to trade too much while losing sight of the bigger picture. I believe I trade because of a belief that there is always opportunity in the market and an edge to be gained.

Being early on large moves leaves me holding the trade longer than I want to, I think overanalyze and stop making good decisions.

Solution:

  1. Increase my size so it forces me to trade less and be more selective. Keep pushing up the size when you feel you get comfortable.

  2. By trading bigger size and being more selective, this will naturally help me really think twice about my entry but not to the point of hesitating, more of focusing my eagerness to perfect the entry.

This will be in my morning market view:

There is a substantial risk of loss in futures trading. Past performance is not indicative of future results. The figures here represent an opinion. The placement of contingent orders by you or broker, or trading advisor, such as a “stop-loss” or “stop-limit” order, will not necessarily limit your losses to the intended amounts, since market conditions may make it impossible to execute such orders. Please conduct your own due diligence if Futures are an appropriate instrument for you.

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Today I was able to formulate a plan and have a bigger picture of the market, but I did enter the one long trade I saw way way early.

This again is one of my 80/20’s that is seriously costing me.

So I need to ask myself a few things:

  1. What am I seeing at that moment to justify entering the market?
  2. My overall direction is fine, I’m just to early. How can this be avoided?

I obviously don’t have the answer now but it will be something that I’m focused on going forward. I just need to be aware of that happening and start receiving information during that time to analyze the situation.

There is a substantial risk of loss in futures trading. Past performance is not indicative of future results. The figures here represent an opinion. The placement of contingent orders by you or broker, or trading advisor, such as a “stop-loss” or “stop-limit” order, will not necessarily limit your losses to the intended amounts, since market conditions may make it impossible to execute such orders. Please conduct your own due diligence if Futures are an appropriate instrument for you.

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The Fear Of Missing Out (FOMO) is something that makes me ignore my entry rules and makes me rush into bad trades. When the market is falling fast, I say “it’s going to continue to fall” and jump in to a short position even if there isn’t a clear entry based on my trading rules. Then I’m disappointed because it turns right back up and stops me out.
Solution: I have to be disciplined and stick to my entry/exit rules even if that means I have to sit a trade out which in hindsight might have made a lot of money. There will be other opportunities to trade and I am learning to be okay with letting one of them go even if my gut tells me to jump in.

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Nice @Mat_M, the one thing that I have done to help with this is passively entering the market on a buy or sell.

So if I’m trying to get short, I’ll offer instead of hit the bid. Most cases I get filled, but many times I do not.

The thing I do in this situation is:

  1. Let the offer stand and see if I get filled.
  2. If I don’t get filled, I may leave it in the book and buy back into that price if conditions permit.

Although I missed my entry, that order could be a perfect exit. Even if the trade is only a few ticks.

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The FOMO factor is as real and alive as it can be with many traders, both beginner and advanced.
As you saw in other threads, I like to get down to the “meat” of the matter and analyze things deeply. In my opinion, FOMO is unrelated to making money per se. In my opinion, it is a psychological state of looking for an instant mental reward. The rise of social media (including Wallstreetbets) gave rise to this feeling more than other times. These factors contribute to a vicious cycle of adverse outcomes as more significant depression leads to greater FOMO. Yes, the more you lose, the more your brain will push you to FOMO.

So, everything in FOMO stands in complete opposite to being a disciplined and systematic trader.

Next time you experience the FOMO, ask: Is my set up there, or am I just looking for a mental reward?

If your setup is there, ok, go for it. If it is not, it’s FOMO or some other impulsive behavior. Trade setups only.

Above all, think about your trading career, not just the next trade. In the scheme of things, what is one trade? You should relax your mind and believe that you have many days for opportunities ahead of you. One day in your trading will make your career, whether good or bad—no more FOMO.

Matt Z
Optimus Futures

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Matt, this is good stuff. It’s very eye-opening that FOMO begets FOMO. That’s not something that I typically think about.

I can see this going along with the 80% negative thoughts and 95% recurring thoughts by humans. It’s a cycle that comes naturally and is difficult to spot if you aren’t looking.

I’m going to note this on my station, very good stuff.

I was thinking today about how the result of a trade can potentially determine the result of another trade, just like this FOMO cycle. The only way to fix this is by meta-awareness and really observing yourself and your thoughts.

Break it down like this:

  1. The result of an action can be affected by how we process that result.
  2. By focusing on how we process that result, the importance is shifted to our reaction rather than the actual result (losing trade, winning trade, scratch, etc).

I think this is something to reiterate at the beginning of each day. If the result of an action is largely based on how we react to that result, we can see how in control of trading we are.

This could also go into learned helplessness, but that’s for another thread!

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@Mod-MattZ Thank you for the webinar today. It was a good insight into the mind of a good trader.
It’s refreshing to see how honest your approach is when it comes to the hard-knock school of trading.
I find it rather funny how you said that you don’t like the markets. First, I was thinking, “wait, a broker who does not like the markets?” then I realized that you do love trading but dislike the circus surrounding the retail trader when it comes to promoting the industry to the retail trader. On that, I agree with you, and to admit to my fault; this is I have entered the industry. Promises of “easy” and “magical indicators” and guru BS “courses.” It would be rather interesting to see what courses members took and what they think of them today.

As far as my weakness: I am constantly looking for a better theory of controlling my risks.
My most significant weaknesses initially were placing stops based on my risk tolerance and not listening to the market move. I have developed a better process, yet, it is not where I want it to be.
I am not delusional where I avoid being stopped out, rather a flexible rule-based system that could be adjusted to different volatilities.

My strength is the patience now. I wait for the market to come to me and placing trades selectively.
I do my best not to predict whether a market will do one thing or another, instead let it happen.
My impulsiveness has gone more reasonably; the FOMO is not there (Maybe :question:) and I trade when I feel like it, never under stress or any other pressure. I am always afraid to let the genie out of the bottle, and you know that dark side that makes you ask the next day, “What the F just happened?” I had enough of these for a lifetime.

Thank you for caring! and for the push to help us all succeed.

Mo

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Thank you for the kind words! I appreciate it.
I understand the effort our customers go through when it comes to Futures trading, so I do my best to help. Glad to see you are working on your risk management, and hope you can find the right one for you.
Don’t try to perfect it, adjusting risk management could be done with ATR, VIX, etc.

As far as the member’s experience with educational mentors, programs, and other courses, I want to avoid reviews of educational material as a single thread. The discussion and debates concerning educators fall between shills, paper traders, and those who really took the program to the market. So the paper traders will defend anyone because in theory, everything works, and those who traded it and lost will have a different perspective. This is an ugly debate and those who defended it rely on the great customer service they received. But, who cares about the customer service when you are sold BS? I never met anyone not smiling when they slide my credit card.

Those who took it to production(live trading) and lost cry foul, but my question is why did you buy from the first place? So again, judging by the experience of other forums and the “intellectual” debates that went on there over educational material, no going to happen here.

If there are trading tips that you think would be helpful to the community that you came across your education, please post them. I myself still read resources from those who I trust. Evolving is infinity.

At the end of the day, I want a community that helps each other and encourages self-growth and education without the magical “assistance” vendors are willing to provide.

Matt Z
Optimus Futures

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Another great thread. I’ll agree with 138way. I really enjoyed the webinar today. It answered a lot of questions for me.

  1. How much of the market is just computers running alto’s.? 90% he said. I actually noticed the same thing he did back in the early part of this century. Things changed with the market. I could never put my finger on what it was but as an investor and trader I could tell that something was different. I stayed away from the markets for many years because of that. When Goldman and JP Morgan spend 100’s of millions on computer algos, I just figured I had no chance against them.

  2. There are no indicators to define when a trend will occur. That will save me a bunch of time looking for one. LOL.

  3. I understand his approach as he is taking a longer term timeframe for his positions to come to fruition. I think as day traders we take similar approaches but on a different time scale. As another trader that I follow on you tube has pointed out, the set up work in 1 minute timeframes as well as 5 minute, 15 minute 1 hr or even daily. The set ups are the same. I try to keep this in mind when I look through the different time frames when trading.

  4. Seems like everyone goes through similar processes in order to rid themselves of bad habits and solidify the good ones. It helps to know I am just human and struggle the same as everyone else.
    Again, great interview and thank you Matt for making that possible.

So onto Bens great post.

My weakness is no stop limits. I’m working on it. Getting better.

I suffer from some of that FOMO as well. see that candle taking off, leaving me behind and sometimes I just can’t help myself. This of course leads me to not using a stop loss. Could be a lot of volatility in the candle so I am afraid I will get stopped out and miss the move. I’m getting better at this. Now I see things taking off and many times decide to just let it go or choose an entry point if it does come back down.

One weakness I did have was with technology. The platform I was using had several issues. Along with that I do have a slow internet connection. I knew before I started that this could be a problem.
Now that I am using Optimus Flow platform I have had 0 issues with technology. I can trade anytime no matter how fast the market is moving. Its a great feeling knowing I can have confidence in my platform and focus my energy on making the right trades instead of wondering if I make a trade will the platform glitch and blow up my account? Unfortunately there is no solution to my slow internet. I live way out in the sticks 1 1/2 miles down an old dirt road in the middle of 40 acres of forest. There’s no chance that they will ever run a faster internet out here. LOL. However, once I get good at trading I will rent some office space in town and get hooked up there. Thats future plans though. :).

Being a new trader I still don’t have a perfect idea of what type of trader I want to be. Do I want to just continue to scalp? I like the fast trades I can’t lie. I am in and out in 20 seconds to 15 minutes. I can also see the benefits of getting into some longer trades that last all morning or an hr or 2 and move up or down considerably… Maybe both. :slight_smile:

I also need to journal even more than I am. I need to take a deeper look into every trade that works and doesn’t work and figure out why they worked or didn’t work. Sometimes thats easy. The set up was there on the chart pattern and I executed the trade the way I thought I should. Other times I can’t quite put my finger on why I entered a trade. Volume spikes or just watching the Dom and getting a feel for where things are headed for the short term.
I know I need a trading strategy or plan and I am working on that.
My strengths are:

  1. knowing what my weaknesses are and working on them.
  2. As I continue to look back over the previous months I can see that I do a lot of things right. I do win a high percentage of my trades. The vast majority of days I a profitable. Fixing my one big leak, not using a stop loss, will really turn my account around from a financial standpoint.
  3. I enjoy analyzing things. So when it comes to trading I really like looking at my month over month performance and seeing that I am indeed improving. For instance, I am showing a profit this month for the first time since I started trading. 4 more days in the month and 1) I have 1/2 as many trades as last month and 2) I have no big losses which means my risk management is getting better but there is still room for improvement.

I really enjoy trading. From strategy to risk management to account management. It’s not easy and definitely a challenge. It’s not something I will get bored with easily.
This is a great thread and I love participating here. It really does force you to think about what your doing and why your doing it. It’s also helpful to see what others are going through and doing. It helps to focus the mind on trading.

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In every profession there is a set of jargon that is used. Your use of the term 80/20 is unclear. My use is different. Can you further define your use of the term 80/20. Then I would know how to respond.

Thanks @Jeff Personally I am not concerned about algos, As much as the negative talk about it, they also add a lot of liquidity along with all the institutional, commercial and other large players.
As it was mentioned, they want to have subpar millisecond fill, and that is not the space I compete in.

I also had the syndrome of “prediction” and not letting the candle complete it’s phase. Sadly, this just cost me a lot, and at some point to just start doing the opposite, and you see the results in the P&L. it’s evolution and it will happen to you too. You will change. We all have to go through pain to get to the other side. This is with everything in life. Work through your weaknesses, and you’ll come out ahead.

I also enjoy this community and you are right, it does keep it’s focus on trading.

Mo

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I will never get a lot of points for being wordy. After 30 years of service in the military I learned BLUF(Bottom Line Up Front) and the 4 B’s, Be Bold, Be Actuate, Be Brief, and Be Gone.

What I will contribute is that consistent discipline matters. In any field in which you apply yourself you have to be disciplined. Disciple in training and execution.

Training is your method. What have you decided works for you. If you have gotten to a place where you have tested it, and you’re comfortable don’t change.

Discipline is your execution. Can you consistently execute. Can you wait for your right set up. As you are watching life go by you, are you patient?

It’s consistent application of your method(training) and execution over time that will produce results. Incremental growth is still growth, over time is impressive.

There is no reason that you can’t be successful as a trader, unless you talk yourself out of it.

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The fact that patience is your strength is such a huge advantage. Patience is something that I continue to work on.

I think trading a lot is partially engrained in me due to my initial experience with trading, that was the norm. To make 150 trades a day.

I am still active and trade a lot, but over time I have noticed it is not out of being impatient so much as it is just wanting to be in the game.

Thanks for sharing Mo!

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Hi Jeff, thanks for the feedback and glad you are having a good month! Good job, that is a good feeling.

I highlighted the above quote because I caught when he said that also. I don’t know the percentage of algo’s in the market or what their volume is, Asim would definitely know more on this.

However, this is an important point in terms of our perception on that particular statement. You even said what I and everyone else probably thinks:

"How do we have a chance against advanced algorithms developed by billion-dollar firms?"

The answer is we don’t. But that is not the productive way to look at it. I struggled with this for some time yesterday.

Here’s how I processed that:

  1. Forget who or what is trading, go back to the raw data of just numbers flowing back and forth.
  2. We are not, directly, trying to beat anyone or anything. We are trying to identify patterns that we can capitalize on to minimize risk and maximize upside. Whether our trading counterpart is an algo or a monkey, there WILL be patterns we recognize.
  3. Those patterns have to fit our trading style and strategy so finding what works for us as individuals may take time, but there is still opportunity there.

The psychological primer of “trading against algo’s” is already defeating and naturally so. We cannot change who participates in the market or what those participants do, only how we interpret that information.

If we change our association of algo’s and who we are “trading” against, it becomes an easier pill to swallow and can potentially give us that edge we need.

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Thanks for asking Evan, you are right I should I have elaborated.

The way I view the 80/20 rule is that there is generally things we can address that have a huge affect on the outcome without investing too much time in the process. Quick wins would be a good term as well.

Let’s say I’m 95% right on all my trades in terms of entry, stop and exit. However, I over leverage and more often than not, get margin called before it hits my stop.

80% of my problem is that I have too much size on. It takes very minimal effort to change that, just decrease my size.

I spent minimal time in creating a solution that will resolve 80% of my problems.

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It definitely isn’t holding me back from trading. I only brought it up because I have noticed that the market can be moving one way or the other and then all of a sudden a large order will come in. The market then stops and reverses and goes and swallows that order. It then continues on in the original direction. I see that as very strange action. For instance, why would the market reverse and move up 8 points to go grab a 200 contract order? Who makes that market move like that? Just trying to understand what we are really up against or learning the rules of the game so to speak. :).

I highlighted this because I really focused this morning on what I was doing, why I was doing it and if it fit in with my strategy. I watched as the trades set up. One trade I said, if it does this I go short. It did so I went short. Got my stop in place as well as my TP and watched it rip down, hit my TP and the turned around. I grabbed the entire bar almost. It moved 21 points and I got 20 by following my plan.
Another trade I did today I sat and watched a bull flag develop. I anticipated what I would do when it got close to the EMA. Again, it worked out perfectly and I feel like things are really starting to click.

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