Subscribe Feed (RSS)Changing my trading mode
November 17th, 2008 by eyal | Filed under Day Trading. |
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Over the last couple of weeks I’ve shifted my trading style back to when I was working full-time. Back then I couldn’t stay up all night to watch the market and my positions as I had to wake up at around 7pm EST to go to work. So instead of following my positions all the way to the close I would finish up late morning, around 11am EST after entering my trades and let positions play out and close end of day on their own. And that’s exactly where I’m shifting to now. There are a few reasons for this:
1. It is easier mentally, I don’t really need to watch what’s happening throughout the day anyway. It serves no real purpose to watch P&L or even price action for my open positions as my trading plan doesn’t have any action steps for the afternoon.
2. Flowing from point 1, it makes it easier to actually follow my trading plan of letting positions play out and not getting tempted to tweak and play around with stops and targets. P&L is better off this way. This became evident using Stocktickr’s backtesting tool.
3. It makes it easier to wake up at a more normal time during the day when other people are awake. This also means I’m in better mental state to trade the European session.
Nevertheless, it is not easy to leave open positions unattended and there are risks and issues with that so I still take a glimpse at the end of the day just to make sure I’m all out. But overall I’m quite happy with this change and think I’ll try to carry on with this through next year as well.
A really appropriate post as I was just emailing a trading friend about the same issue. I get caught up rationalizing my PnL and making these spur-of-the-moment decisions to partial out at a certain level. I have also noticed that letting winners run or play out through the day has certainly outperformed or outgained (from a profit perspective) my attempts to ensure a breakeven trade as a worse case scenario. I certainly hate being up a certain amount just to see profit evaporate as there’s no certainty every trade will just keeping running in the direction you want it to. Shall we call it the ‘set it and forget it’ exit strategy?
oonr7 – yes all that rationalizing and seeing open profits evaporate go away when you let positions and stops take care of themselves. Trading in a trying to avoid losses mode is usually not a good idea. What tipped the scales for me was reviewing this years trades vs. last year and seeing the evidence through the simulation in Stocktickr. I call it Fire and Go Do Other Things exit strategy :-)
nice one m8!
Thanks Dave :-)
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