I have over-ridden one of my systems three times in two days. I really feel like I need to confess. This behavior cannot be tolerated.
As much as I try to ignore the noise, it is very hard.
The economy, employment, etc., are not the market. While I am extremely concerned about our country and the welfare (not that kind) of my fellow citizens, my angst should not be expressed through my trading.
When I want to express how concerned I am about our country and the economy, I think that my first reaction is to buy or sell something. In essence, I think that I’m taking a situation in which I find myself pretty much powerless to do anything to fix it, and through trading, I’m giving myself the illusion of doing something about it.
I hope that makes sense. For a systems trader, it is crucial to not over-ride the system. I’m trying to understand why I have over the last two days.
I have come close myself, my friend. When the shit hit the proverbial fan back in November, I bailed out of 2 positions before the system exit was hit; the stock promptly bounced back and would have been positive. Right now, the system in use is a reversion-to-the-mean system. Bailing when you’re down almost guarantees selling at the low. You need a nutsack of steel in this market. Better to sit on the sidelines than to override the system, no?
Junk, absolutely.
With a mean-reversion system, bailing when down almost ensures selling at the low.
Steel nutsack? Yep. Definitely needed when the market is looking over a precipice.
Although I still think entering the trade, taking the signal, when you don’t want to is as important as not over-riding it once you are in it.
Maybe you are psychic and want to enjoy your all powerful genius gloryfull win-ness. Maybe Chart Addict told you “just one hit” and now you’re back for more lol
The lure of the discretionary is hard wired, a chart just looks like a vine you can jump on and swing, and the way it jumps around can make you hypervigilently thoughtless – “jump.. NOW!”.
You got PPT access though ya? Crank that shit up!
Although I somewhat agree with what Manatrader was saying in the psychic-power department, I feel it’s more a gut feeling than a psychic power… If you’re trading bull and attempting to pick apart the market in order to catch the pop before it occurs, I’m soooo getting where you’re coming from.
Patience is the key… As well as a Steel Nutsack.
Yeah, I sold a long position Friday a.m., put it back on this morning, and then sold it again this afternoon. Totally nuts. Thing is, I have tested all of this…hours and hours in preparation. There’s no point in writing about it except to formalize my reflection process and help others who are also having a hard time with the totally depressing news.
We’re with you Wood. As much as I hate to say it, all the big money is still on the sidelines, and because the market has become so disgustingly volatile in the financial sector, the common folk are now getting worried, shivering to the bone every night and crying themselves to sleep… All because of the money they lost! Because of this, the sell-off you’re seeing now is the common man taking his losses and waiting to start over until it “gets better” or when the Market Makers put their money back into the game. I was in cash all of last week except for two day trades that I made. Hell, I’m scared shitless having three overnight positions!
Good luck tomorrow my man, we’re all hoping for a prosperous day!
Confessions of a system trader.
“While I am extremely concerned about our country and the welfare (not that kind) of my fellow citizens, my angst should not be expressed through my trading.”
Refreshingly clear-headed and rational.
Thanks, Wood.
I haven’t got a signal yet (very, very close last week), but if I hadda, I wooda done exactly what you did. When the swings and volitility are larger than the most infrequent events in a backtested model, one feels the need to override. Don’t beat yourself up.
Wood, I am right there with you. I have a system that has over 700 trades in the last year, provided an 80R return over that period of time and here I am telling myself the market is “different” now. So, I override and start selling early or discounting entries or thinking the mkt will whipsaw me so I get out.
What helped a lot (but hasn’t fixed the urges yet) has been to go back and look through the trade results and look at the numbers to tell me how the system is working over various timeframes. Not how I am feeling about those numbers.
I had thought that my system was doing terribly in Mid Jan to Mid Feb. It didn’t do well but I am still postive for the year. Stepping back and looking at the numbers helped to push down those feelings that were moving me to override.
Stay with it, the proof is in the numbers for systems guys.
Confessions of a system trader.
I’m waiting for the movie. Besides, Shedder promised me a cameo.
I heard redneck-superstar Jeff Foxworthy is clamoring for the lead role. He says he wants to become a more gooder actor, fastly.
Or are you going a more classy route Woody? Say…Dennis Quaid?
lol…you guys are killing me! I think this could be a regular feature here on the ol’ blog.
Man, I was SOOOO positioned for this bounce, until I overrode everything.