Sunday, November 11, 2012


Here are a few of the thoughts I wrote down after deciding to return to SIM earlier this week.

Instant Gratification & Sugar-

If you eat too many foods with a high Glycemic Index, you end up increasing your blood sugar levels too quickly which causes the release of an emergency release of Insulin. Your body then stores that excess sugar in your body as fat- where it is relatively dormant/harmless- rather than allow it to remain in the circulatory system where it can do more harm.

What does this have to do with trading? Well, simply put, if you look for instant gratification there, you are going to be disappointed. You are likely to cut your winners short in order to "win". You are more likely to trade just to get the high of trading. This ties in to the "avoiding discomfort" piece below...

Control- We do all kinds of things to try to maintain control. Stay in the market for shorter periods of time, tighten stops, loosen stops, change systems etc etc. I believe that we have to give up a degree of control in order to profit. If you can't embrace uncertainty you will forever be slave to control (i.e trying to eliminate "gaps", which I have referenced many times in the blog)

Confidence- I asked myself that question because I often suffer from lack of confidence within a trading day let alone over a large number of trades. The lower the expectancy, the more consistent you have to be to reap the potential rewards from it. So, if I second guess the method after only a few trades, I don't have a hope in hell of stitching together enough trades (10's of them), without error, to harness the edge.

Exits: TA or Stats??- My own studies suggest that, like stops, there is no advantage in using TA over MFE based targets. It's hard to let go of old ideas but seeing, say, 80% of your trades go 0.7R in favour before stopping you out because you were waiting for a certain TA marker (prior high, moving average etc) can get tiring (hypothetical example...not my case).

Minding "The Gap"- This is where my focus is now. Giving up the control we all want to exert on our lives (otherwise we wouldn't be trying to make money from trading in the first place) for the long-term good...avoiding the sugar!

It might be giving up control between stop and target. Or, perhaps, between entry and X minutes. Maybe allowing yourself to feel a certain level of discomfort before intervening with order-altering action...

Here's a link to an article that mentions the fact that we are mostly empty space. 

"Matter is mostly empty space. If you took away the empty space between atoms, pushed them together until they were touching, the human body would be compressed to about the size of a pencil eraser. Or to put it another way, the human body is 99.996% empty space. But since atoms are also mostly empty space, you could push them together until the nuclei were touching. If you did, the human body would be too small to see." 

We need those gaps! 


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