Thursday, August 11, 2016

10-Year Trading Anniversary: What Has A Decade In The Markets Taught Me?

Today marks 10 years to the day that I set off on my journey into trading the markets by attending Day 1 of a 3-Day seminar.

It's also my birthday! I don't remember whether or not I had intentionally chosen that date to attend the course, but it's a cool bit of trivia that my trading anniversary coincides with my birthday....but I digress...

The course I attended introduced me to the basics (for a hefty price!) and touched on the psychological aspects of trading. The real learning began years later as I found myself trading a $50K account, of money I had borrowed from a bank, whilst trying to regain my composure after my first (8 trade) losing streak...

So, what has a decade of playing this crazy game taught me? 

I've Found The Holy Grail!! 

There is no technical holy grail... every system, approach and method will draw down. Oftentimes more than you'd expect. If ever there was a "holy grail", it'd be the ability to weather the storm until the method eventually picks up again- even after a 17-trade losing streak ;).

Embrace Losers

Let's pretend walking represented a positive trading edge. If the left leg represents losers and the right one represents winners, how far would you expect to get trying to walk on just the one (right) leg?? This is where being truthful with yourself comes in...the goal is to execute a process, with it's inherent losers, not reach for a certain positive outcome/run away from a negative outcome.

A good exercise for checking your resistance toward following a process rather than seeking an outcome is to take note of the thoughts running through your mind when you review some of your trades. If you start blaming yourself for the inevitable times where you are stopped to the tick, or you start looking for a way you could have exited sooner before giving back that 2R paper profit even though the method said that's what you should do...there is still mental progress to be made.

Let Go Of Control

We control nothing but our thoughts and our actions. I've lost count of the amount of times I've sat watching a trade, sometimes for hours, before falling into bed or going out for some much needed air and/or exercise. As if watching it made the difference. The "illusion of control" is one of the more costly cognitive biases as it expends our energy, completely in vain.

Mind The Gap!

I've written about this several times on the blog. Essentially, if we are able to take action at any moment during a trade, then we have no live edge. Every living thing/system relies on gaps to exist. This means we have to let go of control and have faith and trust in our plan over the long-term, almost ignoring what happens in the short-term.


In a nutshell, I've learnt that we have to be comfortably uncomfortable in order to make progress. Growth hurts, no pain no gain etc.

 I've focused on the trading aspects in this post but, truth be told, learning how to trade has influenced my life- the way I think and live- far more than it has my actual trading. Almost as if trading were a metaphor for life...


Trin said...

Awome post, congrats on a decade of trading. I recently funded my account with my trading for a living money 50k. The analogy of walking on one leg is great. Trading within your method is the biggest challenge, it's a constant debate inside my head when I'm in a trade.

Consistently reminding myself to trade well, trade what the market is giving.

Good post!

Trin said...
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Trin said...
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James Edwards-Marche said...

Thanks Trin!

"it's a constant debate inside my head"...that's when I know it's time to either take steps to silence the voices or step away. It's much cheaper long-term no matter how painful it is to "give up" in the moment.

Good lu...good skill with the new account!