r/TradersEdgeLabs

Ive been studying tading for around 6 months, and started funded accounts 2 weeks ago. every single trade ive won has been from straight bullshit and i just close the trade whenever i feel like it. 99% of trades that used a strategy that i found online have lost numerous times in backtest and instantly lose when i enter. people say stick to ur rules to become profitable, but it seems that the rules arent the problem for me, its the fact that i cant even implement these rules without first being stop lossed every single trade. i havent bought any courses, and idk what strategy to actualy use. what do i do? what do profitable traders (not just gurus and course sellers) actually implement to make their profit?

fyi, ive spent around 400 in evals, passed one through straight bullshit and decided to start implementing a strateg i found online that seems to be "successful", but lost me 4 trades in a row while risking 250 each. it was on the 25k lucid, and obviously that account is blown now. what do i do??

So much content is out there about just being more disciplined in your trading, and as a result social media is filled with traders complaining/beating themselves up over not having had discipline.

But.....no one says how to have discipline in trading. No one is saying, do these things to build discipline. Lets change that, this is a mini guide to being a disciplined trader

First, Lets Understand How Your Discipline Works

You do not have infinite discipline. The idea that you can sit in front of a chart and watch it develop all day and have discipline for that entire day and do that everyday might be asking a bit more of you then you were designed for.

Discipline requires resources, both mentally and by extension physically. Think of it like a gas tank that gets refilled everyday. You are putting a cognitive load on yourself....and since your brain is the most energy hungry organ in your body it burns through fuel like crazy when you are sitting in front of the screen manually forcing discipline while at the same time eagerly looking for your next trade. You will run out of energy, your ability to have discipline will become depleted.

The nuance is that Discipline is like a muscle in that exercising it will make it stronger, but if you over exercise your muscles what happens.....they get depleted and your entire body suffers. The same is true for forcing yourself to be disciplined all day every day.

The Most Efficient and Strategic Way to Use Your Discipline

So Discipline needs to be used strategically. The most effective way to do this is to use discipline to build habits. So you pick one thing at a time and work on building a habit around that. For example, when you first start out as a trader you are building an edge and as such you likely want to be doing some statistical analysis of your strategy to see what is working and what is not. In that scenario you are most definitely wanting to be getting in mechanically when an entry presents itself so you can log that trade and fill out your data set. If your discipline issue is that you are not entering when you get an entry signal then pick that one thing to be disciplined about. Whenever you get a signal, work on having discipline to take the trade even if you need to size down to only 1 share or 1 contract. Within 1 week the amount of energy required to display that discipline starts to taper off because a habit starts to form. Over about 2 months the energy required to execute that discipline continues to taper off, see the attached Chart.

https://preview.redd.it/6dypeid6kt9h1.png?width=1536&format=png&auto=webp&s=6a6c6899b3d729c82e4e5e3e46a1290b3823d2a2

After a few weeks of practice on forming a new habit it is likely that the cognitive load has been reduced enough that you could pick another area of your trading to work on while you are continuing to lock in the first habit.

Where Discipline Breaks Down

For Discipline to do its job, it needs to see that the efforts being put in are having results. It needs a feedback loop. The habit gets locked in when results start to appear. Going to the Gym Sucks for the first month but when you lose that first 10 pounds the feedback loop becomes the more powerful driver of habit forming. The same with trading, you need a feedback loop to tell you that what you are being disciplined about is working.

Since a normal outcome in trading is 3 out of 10 trades fail, or 5 out of 10 trades fail, or even 7 out of 10 trades fail but the ones that work more than make up for all those failed trades, you can't get confirmation that what you are doing is working over the course of the trades you placed that day or that week. Because a significant amount of those trades won't work and on such a short time frame you can't tell if that is because of you, the markets or adjustments need to be made to the strategy....you can't expect yourself to know what is going on in such a small window. So the only way for you to get the feedback is to track your trades and review them. Realistically you will start to get more confidence over the course of 50-100 trades.

So asking yourself to show up everyday and have discipline when you don't know that your strategy is working, you don't know if you are improving, you don't understand the nuance of your strategy like what conditions are supportive to this strategy working and what conditions tell you to back off from trading that strategy.....this creates a meat grinder psychologically. This is the scenario where asking yourself to show up and have full discipline everyday just grinds you down psychologically and actually creates the worst trading psychology. You need validation that your efforts to have discipline are producing the correct results, and if your conscious mind won't admit that your subconscious mind will definitely draw attention to it in the form of anxiety and fear about your trading.

If you are taking the markets day by day without putting in the efforts to really get to know your strategy, that is the scenario where the markets chew you up and spit you out. The way to get a leg up on the markets is to track your trades, review them, journal and also quantify your emotional state with a simple 1-10 scale and log it with your trades. This will do 2 things, you will see how your psychology is improving over time and also be able to see that if you had a bad day trading it might be because you didn't have the right frame of mind... and there are strategies for ensuring that you show up with the right frame of mind....but that discussion will be for another post.

The book to read that covers this subject well is The One Thing by Gary Kellar and Jay Papasan

If you would like to continue this thought on improved trading psychology I made this

https://youtu.be/bovsdKt3_ZA

Hope this Helps

June had the highest trading volume ever at just over 1/3 of all trading volume, according to Citadel.

-9 of the 10 largest trading days were in june

-apparently we were buying a lot of options on semiconductors

-this considers both volume of trades and dollar volume traded

What were you trading?

Is this a sign of a market that is topping?