Trader's Achilles heel: good at analysis/planning but bad at executions/decisions, because being reactive is easier than being decisive? Thoughts?

[Glefdar]

I'd be interested in others' perspectives about this. I have some signals that work very well, which were developed over a fairly long amount of time. I often correctly anticipate a move, meaning my analysis was right, but sometimes I fail to trade my plan. The aggravation of missing the gain that would have resulted from following the plan then sometimes results in a revenge trade that is opposite of the original plan (!).

Say for example I had a plan to buy a dip and rip open, but perhaps I didn't time the dip entry well enough to feel comfortable chasing; but (presumably to avoid the pain of a "missing out" feeling) I then go short too early into the move up, as if to convince myself that I didn't miss out because my original plan was wrong anyway.

Of course in reality, a later, riskier entry into trading my plan would have been much better than trading what was not even a plan, but was just a reaction to a failure / missed opportunity.

The most brief way to summarize and generalize the problem is: can someone have strong skill at analysis and planning, but poor skill at executing (i.e. quickly and decisively pulling the trigger in the heat of the moment)?

If so, what causes the skill gap between these two stages of making a trade?

I think that one aspect of the problem is that it's easier to pull the trigger reactively than to do so out of faith in the plan, because being reactive is easier than being decisive. Being decisive seems to be a skill unto itself that is related to emotional intelligence. What are all of your thoughts?

 

[JoeDV]

The short answer is, yes. Backtesting and paper-trading both leave out the most important factor, human emotions. So yes, you can develop a plan, and be great at analysis, but if you don't have faith to pull the trigger or to ride out a move when real money is on the line, then you'll spend a lot of time doing the coulda, woulda, shoulda game. You have to take emotions out of the game. The past is just that, the past, let it go. If you miss a trade, who cares, it won't be the last one. Lost on a trade, oh well, it's going to happen. See if there's a lesson to learn and chalk it up to experience. Win big, good for you, it's over, now move on to the next. More often than not, in my experience at least, hesitation to place a trade or exiting early is usually an indication that the person is risking more than they should be. My 2 cents.

 

[Glefdar]

Maybe nothing comes close to recreating the emotional context of trading with money on the line, but I wonder if there are particular sports or games that require quick, strategic decisiveness in opposition to reactivity.

More specifically, are there any games or sports whose core factor determining success vs. failure is the ability to be strategically decisive under time pressure, instead of being reactive (I mean, with this decisiveness being the main determinant of success, instead of merely being a peripheral component of winning)?

Seems to me that decisiveness as a form of emotional intelligence must be trained, and that it is the counterpart of patience (i.e., I think that patience is the positive complement to decisiveness, in the same way that indecisiveness - which can superficially resemble patience - is the negative complement to reactivity).

 

[conmayne]

Maybe nothing comes close to recreating the emotional context of trading with money on the line, but I wonder if there are particular sports or games that require quick, strategic decisiveness in opposition to reactivity.

More specifically, are there any games or sports whose core factor determining success vs. failure is the ability to be strategically decisive under time pressure, instead of being reactive (I mean, with this decisiveness being the main determinant of success, instead of merely being a peripheral component of winning)?

Seems to me that decisiveness as a form of emotional intelligence must be trained, and that it is the counterpart of patience (i.e., I think that patience is the positive complement to decisiveness, in the same way that indecisiveness - which can superficially resemble patience - is the negative complement to reactivity).

video games

 

[ziongotoptions]

I'd be interested in others' perspectives about this. I have some signals that work very well, which were developed over a fairly long amount of time. I often correctly anticipate a move, meaning my analysis was right, but sometimes I fail to trade my plan. The aggravation of missing the gain that would have resulted from following the plan then sometimes results in a revenge trade that is opposite of the original plan (!).

Say for example I had a plan to buy a dip and rip open, but perhaps I didn't time the dip entry well enough to feel comfortable chasing; but (presumably to avoid the pain of a "missing out" feeling) I then go short too early into the move up, as if to convince myself that I didn't miss out because my original plan was wrong anyway.

Of course in reality, a later, riskier entry into trading my plan would have been much better than trading what was not even a plan, but was just a reaction to a failure / missed opportunity.

The most brief way to summarize and generalize the problem is: can someone have strong skill at analysis and planning, but poor skill at executing (i.e. quickly and decisively pulling the trigger in the heat of the moment)?

If so, what causes the skill gap between these two stages of making a trade?

I think that one aspect of the problem is that it's easier to pull the trigger reactively than to do so out of faith in the plan, because being reactive is easier than being decisive. Being decisive seems to be a skill unto itself that is related to emotional intelligence. What are all of your thoughts?

I struggled with this, first off paper trading is a good idea, download interactive brokers and use their trading simulator, I thought I was ready to trade after using thinkorswim paper trading , but once I switched over to interactive brokers simulator, it was a rude awakening. Second the issue I would say is determining how to enter for that I recommend read al brooks book, look for setup bars, and high 1 or 2 and low 1 or 2 pullbacks, in conjunction with your plan/analysis basically need to learn price action/patterns, through repetition and success you will build confidence my rule was I would not trade live unless I was able to trade profitably for 1 month and consistently using the same size. It’s all trial and error and it takes time not easy at all