Any DON"T DO lists for trader?

Discussions about personal psychology for the individual trader.
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oem7110
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Any DON"T DO lists for trader?

Post by oem7110 »

Does anyone have any suggestions on any DON"T DO lists for trader?
Thanks in advance for any suggestions
rhc
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Post by rhc »

The 'Non-Essentials' (a.k.a. things you shouldn't do)

1) Cut your Winners
2) Ride your losses
3) Disregard risk
4) Don’t use stops
5) Buck your system
6) Follow the news

And lastly,

7) DO NOT deep fry a turkey whilst naked. (applies to all traders as well as everyone else)
oem7110
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Post by oem7110 »

Thank you very much for your suggestions on the lists for position execution.

What about any DON'T DO lists for Trader Psychology and Money Management?


Does anyone have more suggestions?
Thanks everyone very much for any suggestions
svquant
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Post by svquant »

rhc - what about on #7 if you use some underwear as a "stop loss"? :shock:

oem - onto your request, one that many have heard of is not to significantly change (or modify at all) your system in the midst of a (large) drawdown. It is a play on that our human emotions get us to do things at exactly the wrong time and one should be contrarian, i.e. screw with the system when making new highs! Seen a few CTAs blow up this way, i.e. lose faith in a system during a large drawdown, scrap it and never recover with the new system when sticking with the old system they would have recovered nicely.

Of course the above assumes the original system was good in the first place but if you use any of the robust trend following systems discussed in these forums you'll run into this issue when you hit the MaxDD that is 1.5-2.0x larger than your backtest. What do you do?
Roscoe
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Post by Roscoe »

8) watch the news or read any newspaper (comics are OK).
9) think too much.
10) give or take tips.

Agree with all others, particularly #7.
AFJ Garner
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Post by AFJ Garner »

loriot35
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Post by loriot35 »

I think an important thing is: Don`t double in trouble

that was my biggest mistake in beginner times and it results in losses that you cant take under psychical control :-(
So now i trade with a stop loss and i always have the risk under control
ecritt
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Post by ecritt »

Don't have unrealistic expectations. Don't let wants take precedence over needs. Don't think it's different this time. Don't think you are too late or too powerless to do the right thing.
Roscoe
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Post by Roscoe »

...and never ever forget #7.
rabidric
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Post by rabidric »

DON'T have clients, if it is in any way avoidable...lol.
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