In my development as a trader I noticed, that changing an old habit often works fine for a while, only to have it reappear at the most inopportune time sometime in the future.
As this happened a few times to me, I tried a different approach:
Instead of trying to undo an old habit, which often has very deep founded roots and which actually might serve a valid purpose, I try to live with it and give it its proper place in my trading system.
Take the fear/panic to lose all of my account in a sharp spike against my position. That fear is unfounded usually, but trading highly volatile futures means that my stops often are farther away than I feel comfortable with.
Still it was a conscious decision to trade that way, because I like to have a high percentage number of winners, which pay for the few losers, which from time to time hit my stop.
In the past, when something like this was about to happen I moved my stop, I added to the losing trade at the dumbest possible times, I did everything not to acknowledge the losing trade.
My first approach to solve the issue was to trade with small stops.
But I hadn't changed the way I took profits then and as I tended to take profits early, my overall breakeven trading system, which allowed me to continue learning suddenly turned very red and negative.
The profits I made did no longer pay for the higher number of smaller stops I had to take.
So giving in to the fear of losing a too big chunk of my account actually led to higher losses.
That approach did not work, but ignoring the fear wouldn't work either, because I knew, that would led to panic in case something unexpected happened.
So I returned to using wide stops, but nowadays these wide stops are above or below clear support or resistance levels on higher timeframes, meaning if they are hit, it's very unlikely price will come back.
Because one of the reasons I was unwilling to take the stop in the past was the 'hope' (and fear) that I would (again) prove myself the real dumb trader being stopped at the bottom or top of the move against me.
At the same time I started working on myself to increase the holding time on my profitable trades. Something easier to accomplish as doing this 'just' means, that I have to overcome my urge to take immediate gratification. I still exit profitable trades early, especially when the trade was first sometime in the red, but overall I'm quite content with my performance going from an average of 5% - 10% to 20% - 50% of the available range.
I still question myself after I take a big loss, even if the statistics now clearly show, that my profits pay for these losses. But now it's no longer panic overcoming me. I review the loss, I look for the reasons why I was not able to exit the trade at a profit and what I should have done instead. Sometimes there is no way, but often I get a better market understanding, I am able to formulate a plan, where in the past was just a feeling, you should do such and such. I also analyze myself and look for reasons why I took the losing trade in the first place. Was there outside influence, was I bored, was I distracted. If I find something it actually puts me at ease, because once I found a reason or a pattern not seen before, I can work with it, I can integrate it. The trade which just did not work, the trade which just is one of the losing trades of the system is an excuse for the mechanical system trader, but if you are a discretionary trader, you always have to pass the filter: 'Go ahead, take the trade', which makes it my responsible alone. No one to blame but me for not reading the market correctly.
And all discretionary traders know that feeling when you override your inner voice which tells you: BEWARE, it looks better than it is.
It's when these trades turn sour, I look for reasons, because I know my subconscious mind saw something I consciously haven't identified yet.
