There’s no getting away from the fact that, whatever measure you choose to use, yesterday’s trading was a shocker! I woke at 2am this morning still perplexed by yesterday’s events, so decided to get my thoughts out on paper – or more accurately this blog post – rather than just let them run around inside my head. I need to try and gain something positive from the experience, however small.
The only glimmer of light in yesterday’s confusion is that because I am still using relatively small stakes, the financial lose was minimal. My primary concern is the psychological damage it may have caused if I allow it to.
The daily routine started as normal – woke, shower, breakfast, study (reading trading books and watching YouTube videos on trading), lunch and a brief walk before I sat down to trade at approximately 1pm. I went through my usual preparation before the first race at 1.40pm.
I don’t know why, but nine times out of ten, my first trade is a winner. Yesterday it was not. After several more losing trades it started to dawn on me that something was not quite right, and in hindsight may be that should have been the stage to stop, gather my thoughts and start again or possibly even call it a day. However I didn’t – I just ploughed on expecting things to change. Needless to say, they didn’t. I went from one trade to the next losing almost every time. In fact, I think I would have had more positive results if I had been placing trades randomly. At least that way the law of averages would have ensured I had at least some winners!
Over the last few weeks, I have been really pleased with my progress. Primarily my improved daily consistency. As far as I am aware, I was using the same indicators, methods, approach as before, i.e. my edge, but for some reason it was just not working. Was it me, were the markets different, or worst of all, does my edge not exist?
As the day continued things went from bad to worse. I felt completely detached from the markets and the trading process. As if I was on the outside looking in rather than being part of the process – isolated from the markets rather than participating in them. I then made the worst mistake of all. I started modifying my technique and using untested signals to enter trades. I finally called it a day at around 5pm. The whole experience left me feeling confused, disappointed and worried.
You’ve probably got the message by now that it was not a good day!
So, the questions I am asking myself are why did this happen and what can I learn from this experience?
As far as I am aware, there are only two variables in trading – me and the markets. Whilst it is tempting to do so, I must not blame the markets for my dismal performance. The markets are what they are. They are not trying to catch me out or punish me, they just are. Therefore, it has to be me. The bottom line is that, I am responsible for my dismal performance. Whilst that fact is a bitter pill to swallow, there is something empowering about that statement. If I believed that it were the markets that were responsible then, as I have no control over them, I have no ability to influence the process. I will be viewing myself as a victim. However, if I acknowledge that it was me who caused the problems of yesterday, then I have the ability, and responsibility, to influence a similar situation in the future.
I am confident that I have an edge, and that it works. I have seen it work time after time, and there is no reason to believe that it will not continue to work in the future. After all, my edge is not rocket science – it is primarily techniques I have picked up from experienced traders combined with a few of my own charting indicators.
So, what is my plan for tomorrow? Firstly, I’m going to take a break from studying. My wife has been telling me that I have been ‘over doing it’, and as usual I think she is right! I’m going to spend the morning doing something completely different – the car could do with a good clean so I think I’ll do that – go for a walk after lunch and then sit down to trade. Tomorrow’s trading is going to be a ‘back to basics’ day. Keep it simple, be selective and aim not to lose on the day rather than profit.
Once again I have been shown that psychology is key to trading success.