Friday, February 6, 2009

Same Old Story.

Aside from the fact that I went ahead and still traded a stock inspite of what I kind of promised myself in the prior post....I'm starting to see a pattern occuring. It's annoying. It slows down the whole process, but I believe it's necessary until I learn how to manage my emotions more efficiently. The pattern goes like this...

1)Nice profitable trade creates euphoria...I want to continue to do what I'm doing more often, with more contracts etc.

2)I realize that my stock screening process may be negatively influenced by me feeling higher than a kite...I decide to "just watch" until I return to my objective self *cringe*

3)I inevitably see, and pass on, many nice setups such as the YM 14:30ET reversal shown in the accompanying chart. I get frustrated by the battle between missed opportunities and the need(?) to achieve balance. I also believe that I'm scared to lose some of what I've just made.

4)I take the next setup, with lower risk (ie a stock). I expect it to fail- it does. After I'm out of the trade, I realize it wasn't that good to begin with...I was trading it in place of the recently missed trades, not objectively based on it's own merits or lack thereof.

5)Points 3 & 4 repeat themselves...usually at least a couple of times. I get tired of making half attempts and losing money slowly. The feeling of euphoria has disappeared. I decide that, if I'm gonna lose money, I might as well lose money trading my plan.

6)I stop the half attempts- but I don't trade the plan either.

7)I finally accept that I can't protect every dollar in my account and make money at the same time. I patiently wait for the best entry and take it. If I lose I'm happy I followed through, believing that the system will make money over time. It does. If I win I go back to step 1!!

In short, it takes me about 3-4 times longer than it should do to reach a certain $ amount in my account, when based on the number of setups I identify compared to the number I take. The next challenge is to take the next one I see after a win to see what really happens....

1 comment:

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