Identify the patterns that trigger your negative emotions to avoid over trading / revenge trading
-
I mostly trade in one direction and enjoy following trends. I’m more comfortable with buying trades, but I also take bearish trades when my system tells me to. Trading would be much easier without volatility. One major issue for me is when a Doji candle has a range of 0.5% or more. This can eat into my profits and lead to losses in my next trade. If I’m in a straddle before the Doji forms, I might get taken out of that position, making me lose even more in my directional trades. This can be very frustrating and emotionally draining. It often makes me feel like the market is working against me, leading to anger and a desire to get back at it. To try to cover my losses, I might increase my position size, but that usually makes things worse. This is really harmful to my profits. To avoid this, I need to first identify the patterns that upset me
A 300-point candle in an uptrend can easily take you out of a trade, which is the first negative sign. Then, you might see a good breakout on the put chart, but your stop-loss gets hit again. If there's another failed breakout on the call chart, it can be really frustrating. So, what should you do in these situations? The simple answer is to avoid rushing into trades. I have a rule to wait for 15 minutes after my stop-loss is triggered. During that time, I review the data and plan my next trade. I look for a range breakout from that candle and wait for it to hold for at least five minutes before making any new trades. I also watch the straddle chart and will enter a straddle sell trade when I see a Doji. These are three hourly Dojis in an uptrend. Selling straddles makes more sense during such a period.
It blocks my capital, preventing me from going all in on directional trades. Straddles are designed for selling when a Doji appears, which can lead to good returns during that time. The market is always changing, but we need to ask ourselves if we’re adapting as well. Flexibility in trading is crucial. We should adjust our approach based on the current market phase. Being flexible can help reduce the emotional stress we feel during market movements. Be flexible!
-
ahh.. this what I was looking for... Thank you Ravi ji
-
Glad that you liked it.
