Staying in a winning trade, step 5

...continuted from yesterday...

Step Five: Convince yourself to stay

Papertrade, look for examples of occasions on which your system’s rules for exiting actually had the effect of keeping you in a winning trade and only exiting after a huge substantial profit. Yes, brainwash yourself and convince yourself with selective evidence that your system did work.

Even the best systems only work less than 50% of the time anyways. So do use selective evidence to convince yourself. In the short term, ignore the 50% of the time that your system did not work or else you won’t be strengthening your ability to stay with a winning trade.

However, in the long term, say after 30 or more trades using your system’s exit rules, you must look at all the evidence including the times that your system’s exit rules worked as well as the times your system’s exit rules did not work to produce profits. If the exit rules really don’t work over 30 or more trades, then you should consider changing the rules, but not in the short term as mentioned in the foregoing. In the short term, don’t tinker, just follow the rules.

...continued tomorrow...

Copyright 2008 Raymond T. Lee. All rights reserved.
Leisurely e-Mini Futures Trading
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