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Just had a discussion with a student facing a problem, and I am guessing a lot of traders face the same . I am sharing this with his permission .
His problem is not with technique ( we are talking daytrading here ).
His problem is not with technique ( we are talking daytrading here ).
Everyday, he starts making money, is at profit, then overtrades and gives it all back and goes into negative . This trader has suffered a large loss in March , hence is scared of positions .
This problem is not unique . The solution is simple.
Reduce your trading volumes to a very small volume , say 1/2 lots in index options. Trade this for a month . Do not keep more money in trading a/c so that you can't overtrade
Reduce your trading volumes to a very small volume , say 1/2 lots in index options. Trade this for a month . Do not keep more money in trading a/c so that you can't overtrade
Everyday, have a profit as well as loss target. Whichever is hit first, close trading for the day . I also have this condition, that if 3 consecutive trades are profits or losses , then also I stop for the day . Profit target = 2*loss limit
On my trading career , I have also faced this issue at one point of time. And this is the exact method I followed to bounce back.
The great Anthony Saliba , the only options trader profiled on the original Market Wizards , traded #one_lot for almost a year
The great Anthony Saliba , the only options trader profiled on the original Market Wizards , traded #one_lot for almost a year
