I get a lot of emails from people who are very unsure of themselves and it’s part of the process. It’s how you thicken your skin. The emails speak around one or two things like I keep missing trades or I have massive amounts of hesitation and I get it. You’re not surefooted. You have lack of confidence. It, it’s part of the process of learning. There is something that you can do though to overcome that hesitation, right? Because that hesitation really isn’t, it’s like patience. It’s really something that you have to feel. What do you feel when you have hesitation? It’s probably anxiety about losing money or I’m going to guess it’s that as you’re about to add the risk, you realize just how little and how you really don’t have confidence in what you’re doing. How do I know that? I’ve always said there’s nothing that you’re feeling now or that you are going to feel that good old Michael Martin hasn’t already gotten a PhD in. It all comes down to your feelings. It’s not about scalping at two minute bars and it’s not about trying to make outsized gains with other systems and this and that. It’s do you have self-knowledge and can you control yourself in the heat of the moment?
So how to not miss trades and how to overcome hesitation. If you’re afraid of losing money, you have to cut your bed size because not taking the setups that in your heart of heart are the ones that you should be taking is a form of self-sabotage. Now, I’ll say this, you have the ability to change your life with this business. It’s practically in the constitution of trading that you could be born like me into working class situation and be a complete broke ass bitch and become something of a major figure in the industry. This is what you can do. You can do that right now. If you’re not thinking that way, then you might have limiting beliefs or you just don’t believe that you can do it. Deep down, and that just keeps coming up is that you think that you want to do it, but you really just don’t have it in you. That’s okay too. If you keep your bet size small, you won’t lose any real money, which is good because it’s better to start with $20K, lose a thousand and quit and say Trading’s not for me and walk away with $19K. That’s a huge win, right? No big deal. It’s not for everybody, but with hesitation, you also have self-esteem, right? And if you’re a person who doesn’t have a lot of self-esteem or confidence in yourself, you may deliberately or subconsciously not be putting on those trades because you just don’t really think you deserve the upside that goes with trading. The independence to being able to come and go as you please the eventual ability to buy whatever it is that you want to buy or make other investments, the ability to be your own boss.
You might be really caught up in your current situation and you’re used to that, so you really deep down you like the comfort of that because it’s very, very predictable In trading. It’s not a lot that’s predictable at all. You are on your own, you’re doing your own thing, and where the chips fall is really up to God or randomness, whatever your belief system is. So how to not miss trades. If you are really frustrated about missing trades and you really want a solution, you’re not just missing trades because you really don’t want this deep down, there’s a few things that you can do to not miss trades and to overcome that hesitation is that, again, trade it smaller if you have to, but then make the commitment to the market that you’re going to participate and advertise. What do I mean by that? Well, anytime you put up a stop or a limit order, you’re on the books, you’ve made that commitment. You’re saying with a sell stop that, here’s where I’m moving my inventory. If you’re interested, it doesn’t cost you anything either. Don’t got to pay Google or Meta or whoever these platforms are. And if you put your buys stop in above the market, you’re advertising that. That’s where you’re looking to acquire inventory. Here’s the quantity I want at around this price if you happen to be selling. Otherwise, I’m going to sit here and wait. Here’s me waiting. Did you ever have the feeling that someone’s looking over your shoulder?
So it’s not that complicated. When you really break down the process of trading, it’s like sending an email. So use your, I’m not big on limit orders because limits put a different type of qualifier on the price, and if I’m looking to add or remove risk, I’m not that anal about the price. In other words, I can take all the slippage and skid that I possibly can have because I want to remove the risk, not remove the risk at a certain price, or if I want to even add risk limit, say this price or better. And if it comes time to sell and I bought something at $20 and I want to sell at$ 18, or excuse me, $19, and I put in my stop, I don’t really care if I get filled all the way down to $18.90 cents or whatever it might be because if the trade’s going against me and I have the appropriate amount of risk on, then I want to get the hell out of the trade.
I’m not going to sit there and worry if I can do the calculations after. But when you make that commitment, you’re saying to the market intentionally like I’m a participant, my voice matters. I’m taking a stand. I’m going to change my life. That should be empowering, right? Because you’re doing, that’s what I mean when I say you’re doing the work, you’re feeling your feelings. You’re saying, okay, I got to have to put my orders in and if you looked over my shoulder, is it this way at my red dalmatian who’s always watching over me? That’s Sam, Son of Sam.
That’s intentional work right there. If you’re sitting there looking at the screen saying if this is a good time or whatever, stop, take the day off, give yourself a break. You don’t know what you’re doing. It’s very hard to make those types of decisions on the fly. Now, if you’re in some kind of a training program and there’s a million what ifs, yeah, but Mike, if you’re doing this and you’re working for some kind of trade funding account, you can still use stop orders and you should be able to see what those levels are before the market opens. Those material levels already exist. They don’t just show up that particular day. The intraday stuff is all random anyway, so you can put in an alert if you do want to heads up, but then you’re going to have to feel the feelings of what happens in between.
You get the alert and then what happens when you have to put in your order? I don’t do anything at the market. I don’t know if I’ve said that or if it means anything to you, but I never enter or exit at the market. I always have stops. My whole day is about babysitting a book of shopping orders. I want to add risk here. I want to remove it or add more if I’m adding to my winners, but ultimately I’m either adding or removing risk via stop orders. I’ve got a big book of orders and as the alerts hit, I move the stops up. If I’m in winning trades and that’s about it, just let the market come to me. I never have to think, here’s the time to get out. I let the market tell me where it’s time to get out. I don’t want to catch the very top because what I think could be the top oftentimes is not the right number, and if you’re up $4 on a trade, you don’t know that it can’t go up $6.
So I don’t all of a sudden get crazy and say, okay, I’m up 3R, I have to take my win now. I just adjust my stop. If I get taken out at 2R, so be it. If it moves up to 5R and I adjust my stop accordingly, then I let it happen. That way you’re too emotionally invested in the outcome of a trade. If you need to see 3R every time, I don’t know if that means you’re anal, but to me you’re too caught up in that. That means something because where’d you pick that number from? Why does that mean something to you? Why didn’t you pick 4R? Aren’t you worth it? Maybe you’re only worth 3R. I don’t know. I don’t know who you are, but since you just picked that number randomly, why didn’t you pick 10R? Because you don’t know the frequency with which they show up. And if you’re like me, 9 times out of 10, they pull back, you’re talking shit now, you don’t know the numbers. So stop you’re talking to a pro, do the back testing and send it to me. Otherwise, I don’t want to hear about it.
So that’s the cure. Put your stops in, you won’t miss anything. And the good news is this, when I put stops in and they don’t get filled, I’m like, perfect. I didn’t chase, which is that other little demon that’s running through your brain. You don’t want to put yourself in that spot because that’s always an emotional reaction. You know what I’m saying? So when you put your stops in to add or remove risk, you can trust that your clearing member, whoever’s going to ultimately do the trade, has a vested interest in doing that. They’re probably getting paid a commission, so in some level, they’re already working for you. So delegate that to them. You can put that on them. You don’t have to worry about doing it yourself. So this, again, if that process scares you, right? Because there’s a lot of metadata that goes around entering your stops. Mike, I haven’t done it before, therefore I’m afraid. Okay, well, if you’re trading 10 minis, do trade one to see how it feels. There’s a comment on YouTube where a guy stopped looking at his p and l and he practically described it as the best day of his life. Actually, I’m going to read it to you since you can see it yourself. I got too many screens open. Sorry. 3KingsMedia was the contributor and the video where you can see the comment is, which do you prefer? The pain of discipline or the pain of regret? And three King’s Media says, thank you so much. Today was the first day I promised to trade without looking at the P&L at all and just follow my rules. And it was great in all caps also. Well, it’s a misspelling here, but I was given a new sense of relief, right? Because you’re not all caught up in the trade at that point. The market’s going to go where it’s going to go, whether you’re looking at it or not, right? Again, this is an important lesson. So I said keep it up, but that’s where you can kind of see it. So I know that it’s possible for you to make the change. And again, the feelings that you want to feel might be on the other side of the ones that you don’t want to feel.
So it might mean that you pull back and you trust the process. I’ve been using stops for over 30 years and they work. If there was any caveat, I would’ve already explained it, which I did. And the one caveat is, is that your stop is at the price. When the trade goes at or through your stop price, it becomes a market order. So then you’re filled in line. There may be some slight slippage, your skid, but if your trading to make the bigger money, you don’t have to worry about that. There’s not like there’ll be times when the slippage and skid works in your favor and there’ll be times when it doesn’t. So I can’t say that it’s going to even out because that’s a generalization. But the point being is that when it comes time, especially to take your losses and you have say your position size suggests that your protective stop is, say, a dollar below your entry price.
You don’t know when you get stopped out at $1, and then the last piece might be at a $1.05 below. So you have 5 cents slippage on a fraction of the position. You don’t know that the thing’s not going to go against you $3. Look at what happened with Tesla recently, right? How far that thing has fallen. Do you think those people who got stopped out $60 ago cared about an extra 50 cents slippage or skid? No, because they removed the risk at the right time. So save your life, save your capital, overcome the hesitation and how to not miss trades by putting in your orders ahead of time. It shows your intention to be a market participant. You’re going to lose some money, but as long as those stops are already there, then you don’t have to worry about reacting to something and then getting all psyched out at exactly the wrong time. The order is already there. Once you get your fill, you know would already have it written out. Know what your protective stop is and then you enter that accordingly. Don’t look back, don’t change it. Double check it. I do that every day. I have a whole process.