Greetings. While I really missed trading, I’ve had a great vacation. I actually put my cell phone, lap top, and TV remote controls into the safe and was “unconnected” for nearly ten days, in addition to not following the market or reading any of the trading blogs (669 unread posts in Google Reader) over the last month.
The time away gave me the opportunity to reflect much on life and trading. Some initial gleanings:
1) I’m an overly emotional trader. It drives my trading more than strategy or tactics.
2) I’m an undisciplined trader – I don’t follow my trading plan even though it’s clearly written down.
3) While the ultimate jury is still out on the long-term merits of my current trading strategy (what I call “Opening Range Gapper Momentum”), at this stage I DON’T need to switch horses yet and should instead focus on controlling my emotions, understanding my trading psychology, and improving my discipline.
4) Writing about changing my trading my behavior hasn’t helped so far. I have long posts about what I have to do in the future, and writing alone doesn’t make things happen. This blog has helped me in many regards, including keeping a trading journal and having a small community to be part of…since I’m trading in the closet (beyond my wife) in my real world currently. So, I need to take steps outside of the blog to change the way I trade.
5) Lack of discipline in other areas of my life (eating, working out, caffeine consumption, etc.) will spill over to my trading. I need to be more disciplined in everything, I believe.
6) Blow-out days based on not having stops orders and (other things I can control) have to be eliminated. There are some specific measures I will follow to help in this regard, but mainly, if I had taken a couple days off earlier this month when I was feeling like I was not in the right state of mind – I could of prevented a couple of those major losses, but I was overly committed to trading EVERY DAY. While overall I want to be consistently in the market every trading day to build my skills – if I’m not mentally together, I need to not trade that day, instead of trying to maintain a Ripken like consecutive daily trading streak.
7) Last, being overly obsessed and focused on trading won’t accelerate my learning curve. I need to have balance. I need harmony between Work, Family, Sleep, Food, Fitness, Recreation, etc. I tend to have a compulsive personality, and recently I have channeled this toward my professional endeavors. However, since October 2008 – this focus has been directed on trading and the markets. I can invest into learning to trade, but it can’t be all consuming.
So, I reinstalled my charting software and trading platform on my office computer today, and started looking at some candlesticks for the first time in weeks. My plan is get into my morning routine the next couple days, and come up with a formal “simulated trading regime” to follow for 14 trading days between Tuesday, September 8th to Friday, September 25th. I plan to pursue the ideas I described in my last post of focusing on entries, eliminating hesi-trading, and using a stop-loss 100% of the time. I will use a standard 20 cent trailing stop or some other automated exit to take out all discretion from exits, at least for the first half of this period, to calculate my paper results.
We will see if it’s time to return to real money trading by October 1st using the prop account.
I can’t wait to catch up with everyone via your blogs or comments. Hope all is well.
One of the things I did over the last month was finally re-finish our fireplace mantle. We bought an old house in the city five years ago, and this thing has been covered with many layers of white paint the whole time. Still needs another coat or two of varnish and a couple touch-ups on the wood, as well the brick/stone cleaned, but it doesn’t look too bad. I have tons of projects like this to do around this old house….ideally I will be able to focus my obsessive tendencies to getting the house “to do” list done, instead of having that crazy energy emerge in my trading. We’ll see if I can trick my brain like that.
