How to Stop Missing Out on Trades // Ep. 38

In This Episode

• The 2 ways that Walter safeguards against missing trades
• Deeper psychology issues behind missing trades
• How hard work can help you overcome missing trades

Are You Always Missing Trades?

There are hidden causes of and solutions to missing trades. Listen is as we talk about solutions that have worked for us and common mistakes that we see in other traders.

You don't have to miss out on trades. Find out what can be done about it in this episode.

Read the Transcript:

Hugh: Hi, Walter! Missing trades, how do we avoid it? Why does it happen? How can it affect our trading?

Walter: For me, the way that I've tried to avoid that is by trading, there's two ways. For me, if I trade higher time frames I don't necessarily have to miss trades. It's just easier to see the twelve-hour candles. So that's one thing, the other thing is let's say, I wanted to take a trade on a one-hour time frame then I would just set up an automation so that it enters the trade if everything is set up correctly.

So that's what I've done but I think what you're getting at is the psychology behind it. The difficult part about it I think, for a lot of traders, like imagine you're playing a soccer game and your team's down a goal. It's your zero-one down a goal you know there can be a lot of pressure for you to try and score to even it up so to speak. 

I think that's kind of the way that some traders think about trading. We go, “Well, you know we miss that one” and then you'll watch it. You go, “Oh, look! Of course, it worked out so nicely blah, blah, blah”. So you kind of feel like you’ve got to make it up by taking another one as soon as possible. The other real problem is getting in late and chasing it. 

Recently the last couple years, I'd like to trade the trend mostly. So that's a really big deal because if you miss an entry, it's tempting to get in again after your signal. If the trade's already up eighty pips or whatever and you're like, “Well, I'll just get in now”. Or what I like to do is really kind of hold off until another signal comes because if it's a strong trend, it's going to keep pulling back.

It's going to keep giving you signals on the pullbacks if that's how you trade. So it's not really like for me, it's more of a lifestyle thing; like making sure if this is something that really bothers you then just make sure that you just set up your day. If you're away from the computer from 7 AM to 8 PM then just trade those charts that allow you to make your trading decisions before you go to work or whatever and then at the end of the day when you get back. 

Just set it up that way; to me, it's an easy solution. I understand but the problem is so many traders are into the lower time frames. They feel like if they quit their jobs they would be better off because they could see all these candles unfold that they wouldn't normally see and that's really the danger I think. 

It’s that you convince yourself that your trading would be better if you were dedicated to it completely and that's where you know the missing trade thing kind of highlights that for some people. Like, “Oh, you know if I  quit my job then I would have seen this one, this one, this one,” and you know the hindsight bias can seep in and you forget about that one, that one and that one which would have been losers you know.

Hugh: Yeah.

Walter: What do you do? 

Hugh: Well, I think the bottom line also I see a lot is, it just comes down to discipline. You just have to be disciplined too. If you're trading the four-hour chart, check the chart every four hours or if you're day trading or whatever, sit down for the one or two hours that you're going to day trade. Just do that instead of like watching Netflix or trying to make some bread on the side. I think that's one of the major things that I see.

Hugh: Hey there! I hope you find this episode useful. I just want to let you know that Walter and I give away something valuable every month that helps traders improve their skills. You can enter to win by simply leaving an iTunes review and leaving a comment on our YouTube videos.

At the end of each month, we'll look at the comments and reviews from the month and we'll pick a winner at random. Each comment and each review counts for one entry during the month that it's pitted.

So, if you're interested in that, be sure to enter after this podcast is over. Alright, back to the episode.

Walter: That's very true. Just setting aside that time making your schedule. Discipline, it's a funny thing like what you said reminds me of my friend in high school; he was a really good basketball player. He was a freshman in high school. So first year in high school and he was on the varsity team right which is the junior and sophomore. The year eleven and year twelve normally kids are on that. He came in straight away and I'll never forget. 

We became really good friends and we still are to this day and he said, — and he went on and played in college and stuff like that. So he's a pretty good player and he said — “I am the worst athlete on the team” and I said, “Really? What do you mean?” He goes, “Yeah”. He said, — and this is coming from the only athlete on the basketball team who's been on the varsity team since freshman year and he said — “I am the worst athlete on the team”. I said, “What do you mean?”

He goes — and then I realized what he was saying — I go, “Oh, you're just saying you work harder than anyone else”. He goes, “Yeah” and that's kind of like and it was true. It was absolutely true. He was the worst athlete on the team. He absolutely worked his tail off because I saw him do it you know.

I saw the things that he did and all this crazy Russian Sports Science that he was into and all that stuff. It was really cool actually but what I'm saying is discipline can trump talent and in trading it's kind of kind of similar. Discipline can be like, you might have a really talented trader or someone who has a really good system but if they're not that disciplined you can win. You can beat that trader in the markets just by being disciplined. Do you know what I mean?

Hugh: Yeah.

Walter: Yes you need to have a system that works. Yes you need to have all this stuff blah, blah, blah. That's all true but if you have the discipline that's a huge part of it and I attribute the discipline to the reason why I was able to go through school and get a PhD. It was only because I was disciplined. It wasn't because I was super smart like that should be clear to all the listeners; that's obvious. 

I was not the smartest person. I wasn't this or that or whatever you know I just tried really hard and I set my goals up, my schedule up. I did the work you know. I literally got bounced doing my PhD. You have this thing where you defend it. They actually said no. It's usually almost a guaranteed thing. When you're going to defend your dissertation, you have this committee of five Professors and they read through it.

You give it to them; they have it for a couple weeks. They read through it and then you go in there and they ask you questions and then they pass you or fail you. They failed me. I'm not going to get into all the politics about that because I think there were some but the reality is I kept pushing on and I said, “Okay, well you know what do you want me to change?” They told me and I said, “Okay”.

So six months later I came back, made the changes and did it again. That was just by being disciplined and you know keep going, keep going and hammering away at it and not you know getting discouraged or trying to do or just throwing my hands up and going, “You know whatever.”

I saw today, actually I went surfing this morning and I saw a guy in one of those scooters, those motor scooters. You could tell he was ill for whatever reason; he wasn't that old really. He's probably in his forties or whatever but he was like you know really sickly. He was in this motor scooter; he wasn't even like a big guy. 

So something was wrong with him and I was thinking about this other guy that I've seen all the time on the beach. Same age as the guy that was in the scooter and I don't know what's wrong with this dude but he basically has one leg. What I mean by that is this guy runs on the sand. He sprints up and down the stairs and one of his legs is basically useless.

It’s like all bandaged up and stuff, like it almost looks like it's hanging. Like they told him, “Dude we got to amputate your leg” and he's like, “No. I'm going to make it work again you know”. Like that's what I imagine and it's kind of the difference between these two guys. The one guy's like, “Oh, okay screw it. I'm going to have to be in a scooter for the rest of my life” you know and the other guy's like, “No!” 

Literally you’ll see him going up the stairs on one leg. He's like making all these noises and I'm like, “Dude the guy's going to die”. You'll see him on the sand like all these people jogging on the sand in the morning. He's like on one leg you know I'm like, “Dude this guy's crazy” but he's disciplined. 

Do you know what I mean? He's trying to get back to where he was. It's clear you know that that's what he's trying to do. Anyway, I just thought that was an interesting analogy and it's exactly what you're talking about.

Hugh: Yeah, I know. Totally. I didn't know this guy but I used to play against this guy in high school soccer. He was okay like we didn't know about him because he wasn't spectacular or anything but the same thing. He worked his ass off; he made it and he played for the Houston Dynamo.

Walter: Really? Wow!

Hugh: Yeah, he has like one of the top twenty-five goals of all time because he scored a bicycle kick in the MLS final or whatever and when we played in high school, he wasn't like anything special you know but he worked his ass off and he got there. He's like a legend now at the Houston Club. So I think work and discipline really do trump any kind of skill that you have or anything like that.

Walter: Yeah and that's why you know, you rarely see someone who's super like what you're saying. In sports, you rarely see someone that's so like just transcends sports. It's those people that have it too like they're really talented and they work their butt off and that's so rare. It's usually one or the other. You usually have something like they're super talented and they just kind of like ride that talent. Sure they work. 

I'm not saying they don't work but they don't totally push themselves and then you have your friend or the guy that you knew that you played soccer with. He's the opposite. He's got some talent you know maybe average talent or whatever but he worked as you know. He worked so hard to get to where he was at.

This should be a message of hope for you traders. If you're kind of struggling right now just know that discipline is what will do it you know making that time to back test; making that time to check the charts. Just cracking in every day even if it's only twenty minutes working on your strategy. Working on getting your data; doing your back test whatever it is. It's a big deal and it all adds up you know.

Hugh: Yeah, it does. I think it's also kind of hard to sometimes see like inspirational stories from traders. So I think it's also useful to look at other areas of life and see you know these people have succeeded even though they weren't the best or most talented in the beginning and it just kind of draws them in for inspiration from there also.

Walter: Absolutely, biographies are great for that sort of thing.

Hugh: Sure, cool. Thanks, Walter. 

Walter: See you.

Hugh: All the information in this podcast is for educational and informational purposes only and is not trading or investment advice.

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