(Speaks softly) Sorry for the lack of s finishing post yesterday and for the late arrival of today's.
I've been in bed with a migraine since last night and the funny feeling I've had over the past couple of days or so was most likely the build up, no wonder I didn't feel on top of my game.
Instead of being involved with Bloomberg and the news and views in the build up to the tapering announcement I was throwing years of old paper orders into a roaring fire I'd built in the living room (the fireplace silly!) and I noticed it was one minute to 7pm.
I raced into my office, opened my platform and as I heard the announcement I saw the initial drop. I tried to place a short order (in line with what I through may happen with the announcement) but couldn't get it on as the price was seesawing so dramatically. I noticed a rise and thought I'd get a better price. Of course when I was filled my order took about 50 points higher than when I clicked my mouse and continued to climb.
Fortunately I'd only gone in at £5 point and within 5 minutes I was 150 points behind. I know sometimes you can get an odd reaction before the market digests the news so I thought I'd leave it. I closed out my position for a 200 point loss aftermarket when I saw this was for keeps.
A few lessons here:
1) Never place a trade immediately following news announcements
2) Listen to the build up with Bloomberg and my twitter feeds so I can educate myself on possible outcomes.
3) Don't trade when I'm not feeling right.
I couldn't get out of bed until 1pm today and I've been walking around like a zombie ever since with that slightly disconnected feeling. Thank goodness I recognised the migraine from the outset and had started taking my pills or I'd be suffering and most likely still in bed.
So that concludes my trading for this year, it's a good time to take a break. I'm about £1500 down since I went back into the markets in September which although far from ideal is not a disaster. I've had a really good run of winning days and I've learned I must have more confidence in my own calls. I've read a few of my recent entries and my long bias would have served me well. The long trade I closed out recently for a £3500 loss I could and should have let run to at least breakeven. That would have made the last 3 months profitable.
No harm done in the medium term. I've learned so much more about myself and I now welcome the break for a few weeks, I could do with it.
You're probably fed up with well intentioned advice but have you considered going for a more mechanical approach? Enforcing discipline is the key as from that you'll achieve consistently profitable results.
ReplyDeleteTrading will become less fun in the gambling sense but more fulfilling as the process will dictate the outcome. The fun will come from the satisfaction gained by being disciplined and of course making money.
I say this from the point of view of someone who has struggled to achieve consistency in my own trading. I've had some great results but never managed to kick on. I've basically been a "boom buster" but fortunately without busting altogether.
You never know what the market will do. You may think you know but at any given time one can't possibly know.
Being mechanical takes a lot of the emotional stress out of trading and will allow you to look at it with more perspective. It is a business based on probabilities. If your method has an edge you should win over a large enough sample size. You have to be consistent to allow your edge and the probabilities to work.
And don't be greedy. If I were you at this stage I would stick to scalping. You had a great day last Friday doing exactly that. Don't take any other type of trades. As far as I can see those are where you've lost money recently. Again this comes down to discipline and consistency.
I have struggled to overcome my ego and I think the market has finally beaten me into submission. Strangely enough I feel as though I'm in a better position to make money. The technical side of trading can be mastered quite quickly. The emotional side takes much longer.
Enjoy your break!
Hi James,
DeleteIt sounds as though you're really close to cracking it so don't let the market beat you into submission! Take your own advice, become even more mechanical!
You have identified your emotions as the area to 'conquer' so I expect you to be profitable when you return.
I don't know what the market will do but if I'm going to be wrong I want to be wrong based on MY thoughts and views not those of someone else I have allowed to influence me.
Fact is I was right about this being a one way market and I'm a twat for not believing in myself enough. I won't make that mistake again.
Enjoy your break too and catch up with you on the other side of the holidays.
Don't aim to learn about yourself when you are trading. This is not a psychology lesson. Don't also think that you've learn your lesson, you'll never will. It will happen again and again if you don't follow your rules like a robot and don't think. Thinking in trading is your enemy.
ReplyDeleteWrite a set of your rules, then write again a compact version of it and just follow it.