Nowhere is this dynamic to a greater extent than prevalent than inwards the frequency of people's trading. For the virtually part, traders merchandise amongst a frequency that suits their needs for involvement, non their objective assessments of opportunity. The resultant is overtrading--taking many to a greater extent than trades than chance rewards.
There are all sorts of excuses for overtrading, including the mutual assertion that frequent trading contributes to one's "feel" for the market. In reality, however, the chop, chop losses that oft accrue amongst overtrading contribute to the really psychological problems--frustration, loss of discipline--that traders recognize atomic number 82 to a loss of marketplace feel. The existent inquiry is whether frequency of trading is positively correlated amongst P/L. Very oft that correlation is nil or negative. Periods of to a greater extent than active trading correlate amongst worse trading performance--not amend marketplace feel.
It's no coincidence that one of the virtually read posts deals amongst why nosotros merchandise emotionally. We typically come across psychological issues inwards trading because we're overinvolved inwards markets, non because nosotros lack commitment or passion. Indeed, too oft passion is used every bit the excuse for addictive trading.
So here's an experiment that I've been working on.
The inspiration for the experiment comes from the sentiment that artificial constraints tin human activity every bit prods that cause creativity. For instance, suppose I say myself that I receive got to create a tasty dessert that only utilizes 3 foods. Moreover the showtime 2 components of the dish receive got to hold upwardly cake together with cherries. So at i time I receive got to think out of the box. How produce I seat cherries together with cake together into a unique together with tasty dessert? I create upwardly one's remove heed that the dessert needs liquid to select the cake together with cherries together, so I squeeze juice from some of the cherries. I so think that I had a delicious fruit beer during a recent brewery tour. I blend the beer amongst the ruddy juice to create a tasty sauce together with pour that over the cherries together with on peak of the cake. Voila! H5N1 unique dessert that I never would receive got sentiment of had my options been unlimited.
With that inwards mind, how would I merchandise if I could only merchandise i time per week?
Hmmmm...that changes everything. If I tin only burn downwardly i bullet, I receive got to brand certain it counts. That way I won't receive got trivial scalp merchandise ideas; I'll desire to produce goodness from to a greater extent than pregnant marketplace moves. So at i time I receive got to larn dorsum to my marketplace enquiry together with position the characteristics of the few cracking trades that ready during a week. I expect dorsum at many weeks, across many marketplace conditions. Lo together with behold, at that spot *are* criteria that clearly betoken proficient weekly opportunity, but they are dissimilar from the criteria I've been looking at. They are longer term, together with they rely on setups that simultaneously happen on multiple fourth dimension frames. They're similar the fruit beer: criteria I wouldn't receive got sentiment of had I been complimentary to merchandise whatsoever together with every fourth dimension frame.
As a consequence, if the merchandise doesn't ready across defined fourth dimension frames, I don't receive got it. Looking for a proficient sentiment isn't proficient plenty when y'all tin only merchandise i time inwards a week; y'all postulate those cracking ideas that come upwardly to you. If it doesn't smasher me every bit a slam dunk, I don't merchandise it. I don't desire to waste matter that bullet.
What I tin written report from this experiment is that the trading thence far has been profitable together with consistent. If that continues, I'll size upwardly the selective trades; I won't merchandise to a greater extent than often. I am fully engaged inwards markets together with update my enquiry daily, but I only merchandise when everything comes together. I'm perfectly content to immature lady moves, every bit long every bit I profits from the motion I produce identify.
But simply every bit the fruit beer ruddy cake is a novel creation, my novel trading way provides an exclusively fresh experience. I banking concern check the marketplace inwards the morning, midday, together with evening, but I don't pass fourth dimension staring at screens. That frees me upwardly to produce many other things amongst my time: I at i time receive got the bandwidth to receive got on novel together with interesting projects. Trading has check into my life; my life does non revolve roughly markets. It's slow to say when we're on a proficient path: the move gives us energy; it doesn't deplete us. Trading less has meant making more, but also existence to a greater extent than productive. It has also led me to position patterns to merchandise inwards the marketplace that I would receive got never otherwise perceived.
Take it to the bank: Trading success comes from trading the market's personality, non our own.
Further Reading: When Trading Gets Out of Control
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