Got an awesome email the other day I thought it might be helpful for everyone.
The content of your post today could not be more relevant to the issue that I have been dealing with as of late. Not to sound like a weirdo, but it’s almost as if it was a sign to me as I conquer one of the last hurdles of completely making the turn.
Not weird at all, I am glad you found it useful. I couple things to think about. We are always conquering hurdles the thing that changes is the size of the hurdles and when you realize that it is a hurdle.
My biggest problem has been a combination of two issues, chasing, and rushing trades. These two issues have been responsible for me giving back over 60% of my gross weekly take ever since turning profitable. The thing is, and I know you are familiar with this, when things set up the way they need to, you absolutely know it. At that point the trade is never hard to take. I found that whenever I reached that point in the day, I had often already chased something, or jumped the gun, which had resulted in a loss. Thank goodness for R/R, I am usually able to undo the damage.
Trading is about finding the winners first or finding winners when it still matters. I struggled with this when I don’t have a plan or I forget who I am. Trading with restrictions is hard from the standpoint of most people do not have unlimited capital. When you do not have unlimited capital there is more importance on getting the most out of each trade. This challenge is what draws me into trading. Although getting to profitability is great because now you know you can do it, it also means you have more responsibility. I think you have a perceived expectations of an outcome but show me in a tangible way. Be able to communicate that to someone else. Understand why you are making and losing money, it appears you are at least in the first steps but there are more. Your last sentence scares me a little bit. Treading water is great but hard to build while in survival mode.
I have been saying for weeks now, that i would let go of the idea of catching all the major rotations, and that i must live with letting certain trades pass me by, if they don’t set up in a way that will allow me to appropriately control my risk. However, this is probably one of the hardest obstacles I have encountered in trading. However, last week I took note of all the trades that seemed to be handed to me on a platter, and calculated how I would have performed if I had just watched the others go by and stuck to the ones that I was most comfortable with.
I am encouraged that you are feeling some pain and you still understand you are doing it wrong. My suggestion is to change as soon as possible. Do it now while you still have money and while you still have the pain. The pain will numb and it will put you in a world of a hurt. The question you must always ask yourself is Do I want to be a trader? If it is yes than you should be able to make the change more easily. Do it while you have the money and while there is pain.
I swore to myself that this week I would do just that. This morning I sat in agony as I watched the market sell off with little pull back. My time to jump on the train came after the initial sell off when we pulled back to 38’s and couldn’t push past them. 38’s were key in my analysis as they were the second most popular price from Friday. It was while I was in this trade, slowly pealing off my position at a profit on the way down to fill the gap, that your post came through. It helped make things even clearer, my greed created a barrier by causing me to act at inopportune times out of fear of missing out. This is my barrier, there is no question. The level of excitement I felt after closing out my trade at 10+ points, knowing that I had successfully withstood the urge to jump in on the initial sell off, is inexplicable. I repeated the discipline as I waited for the market to present the next opportunity which came as it failed to successfully enter back into the IB. I knew another test to the lows was likely and I successfully waited for the market to show me when to enter. Normally, I would have likely entered prematurally and taken several losses before the time was ‘right’. Today was a huge step for me, and your post just made it that much clearer that these obstacles are normal and all traders struggle with them in one way or another. Today was all it took to brand my mind that waiting is worth it and missing is just part of the game.
You did it once, 1 down and infinitely more to go, hopefully. There will be a time when you do everything right and you still lose money. You have to believe in your plan over time. This was a case where there was positive feedback coming from negative feedback, it is easy this time. What is going to happen when jumping the gun would have worked?
This was tough for me to get over, but the way I look at these situations is 50/50 trades will work out 50% of the time. But my plan is not take 50/50 trades. That is how I rationalize missing out on those type of trades. I have to accept that I can’t catch them all, but there is a reason for that.
As always, humbled by those that take the time to share their stories so we all can learn.
We would really appreciate your feedback, if you like, hate, or think we are full of crap. Please leave a comment, a voice mail (312) 725-9121, email info @ traderhabits (dot) com or twitter, stocktwits, youtube and facebook. Subscribe to Traderhabits by email or to newsletter.