Answering A Question

@Shaq48_Trading Enjoyed your No 70,(chatwithtraders.com) thank you. Would really like to know how you reconciled risk & size with being mentally comfortable?

What allows a trader to become mentally comfortable? If I was asked to give a one word answer it would be..confidence. Confidence in the work I have done when not at the screen is what allows me to have mental comfort in what I am doing. The stress that takes place while in front of the screen comes from not being sure of the work you have done off the screen for a system/strategy trader. Risk , size and various other pieces of trading are the things you question and answer in your work off the screen. They are not something that I try to change or use discretion in while trading very often. Decision making while in front of the flickering ticks usually will involve a higher level of stress. Making decisions under higher levels of stress commonly leads to results that are less than desired. We all tend to make worse decisions over all while under stress rather than those less stressed decisions.

As system/strategy traders ,our job is to give the work we have done off the screen while not under duress the chance to play out. When we feel that urge to fiddle with a trade while in front of the screen we are lessening the chances that the results of our work will give the results we expect. In effect we are curve fitting are system/strategy in real time. The only reason to mess with it is what? We are trying to prevent a loss of some sort. We are trying to avoid the pain of what we perceive to be the higher odds of a loss now that the flickering ticks have entered our thoughts. Every trader I know says they fully understand that there is no 100% accurate system or strategy yet we all continue to try and mess with our systems in order to get closer to the unattainable 100%. There is a saying, “he/she who loses the best wins” , yet we undermine this continually in an effort to avoid a loss.

The size of a position, the placement and movement of stops, the way we manage a position once in it are all part of the work done off the screen. The work done off the screen is where you plant that seed of confidence that can grow.