From chatting with the members of our Skype Trading Group, the number one reason that traders fail would seem to be: over-trading. We all know how easy it is to get into revenge-trading mode, when you’ve had a couple of losses and the trading demon takes control, urging you to take more and more trades to recover what was initially just one small loss, that grows to be multiple losses because all the discipline and trade rules get forgotten. There’s also the urge to keep on trading even when you’ve had a great session, then before you know it, you’ve given all those profits back as greed creates a loss that invites the revenge-trader back.
To always keep the discipline, I’ve written an indicator called ‘ATM Kill’. Load this onto just one chart (pick your most-traded chart) and it will apply the rules to all the charts with ATM loaded. Before a session starts (you can’t change the options during a session), you set the session start and end times, max trades per session and hour; max losses per session (number of trades, total financial and/or percentage) and max gains per session (financial and/or percentage). The indicator will flash a warning when you’re getting close to any of your limits and remove the BUY/SELL buttons, from ATM, when thresholds have been reached. Feedback from the Skype group members that have been using this indicator has been extremely positive.
I’ve also written a Trade Analyser that shows your best/worst trading by day of week / day of the month / hour / instrument. So, if you see that your worst time for trading is around the New York Open, for example, you might like to skip that hour altogether, in future, or create some specific rules to improve your chances and limit your losses.
These are free add-ons for the Advanced Trade Manager, available for download now from the installation page.
I hope these tools will help you to become an even better trader.