Day's Anatomy- 18th October 2012

Another day of just following along with two near misses, one shown near the end of the day, one not shown just after the first trade. Monday is the only big deviation from the plan and it shows in the difference between actual outcome and what could have been if all days were treated equally.

Just the one lone trade was responsible for triggering my stop order on the last trade. Fun stuff :)

Day's Anatomy- 17th October 2012

Can You Spot TWOT?

Most of the action occurred in the European morning before the US open. Then a bit of a choppy, 20-pip range.

Day's Anatomy- 16th October 2012- The Worst Of Three.

I'm happy with the way I traded today. No rule-bending or trade-skipping (within context..).

The idea of "The Worst Of Three" came about when I repeatedly noticed that when I tried to reason my way around two variables- let's call them A and B- I always ended up in 3rd place in terms of pips, with A and B taking turns for 1st and 2nd place.

TWOT relates to today's action because, sometimes I exit before the 23:00 CET forex break, other times I don't.

It just so happens that the two times (off the top of my head) that I've elected to leave trades through the break, I've suffered some adverse fills that have cost me a half R here and there...

This time I take it off and, after a 12 pip gap in my favour, it speeds off to target.

Whether I had always held or always exited I would have been better off fiscally. The worst of three...

(Not prepared for multiple R losses so no holding from now on!) 

Day's Anatomy- 15th October 2012

Last trade (with huge slippage considering my lot size) was a dead giveaway that we were going up. Had I have traded the two missed trades I'd have had the opportunity to take the last two longs and finish up to some degree or another.

Epic fail.

A bit more of this and I'll be forced to resolve these issues in SIM for a few weeks/months.

Day's Anatomy- 12th October 2012

Followed along much like yesterday except today ended up with some much needed profits. Note to self: The fear of losing money and/or being wrong must be outweighed by the fear of not following your proven plan.

Incidentally, for those who do not yet have a proven plan; It's far more valuable to lose money trading a plan that doesn't work rather than trading with no plan at all. Losing consistently beats losing randomly every time because you have a constant which can be tweaked to profitability. Trade randomly and you are trading with raw luck (or lack there of).

Day's Anatomy- 11th October 2012

Much better. Just the one slight deviation from the plan with the "miss" after the first trade. It's difficult (impossible?) to objectively define a "miss" versus a "skip/hesitate", being a discretionary approach. Too many shades of gray....

....if you're able to be honest with yourself, you'll reach a point where you can start to rely on your feelings as a strong indication of the truth.

Day's Anatomy- 10th October 2012

Complete breakdown today. Same themes as yesterday, except worse.

It's really not about the money. It's all about the difference between taking risks and accepting them. Doing the former without the latter is financial suicide...

Taking a stance in the face of conflicting market information- such as in the last trade- is a sure sign of my needing security outside of the strategy. I noticed it, but continued to trade what was. Pretty much fell prey to all the biases I mentioned on Monday!

I prefer to think of my trading in terms of distance from the absolute edge (i.e what was available from the method minus damaging thought patterns/behaviour).

Monday- No gap between performance and absolute edge. Still a marginal down day though.
Tuesday- Target-sized gap. (Target was obtainable a couple times over...I managed a hair under break even)
Wednesday- Huge gap. Again, target obtainable but finished 60% of the target under break even. Terrible.

The profitable days are always easily explained (namely, "follow the f***ing plan, despite what you feel!!").

Let's see if I can't get back to doing just that....

Day's Anatomy- 09th October 2012- Accepting Risk!

Today, I was that cyclist in the crowd...

Although the net result was better than yesterday's, I'm a hell of a lot happier about yesterday's self-management. Last night's decision to not put on the overnight trade had a knock on effect. I eventually got back on the horse but not before missing the two trades that would have brought me to target (I'm fine with the b/e trade, despite it going on to be a winner. Within the written plan's guidelines.)

A day I want to forget in a hurry!

Day's Anatomy-08th October 2012 (Pt 2)

10 pip range for >5hrs=Chop!

Day's Anatomy- 08th October 2012 (Pt 1)

I'm publishing this half-way through my trading day as it represents a milestone in my personal trading. One which may apply to others whether they are aware of it happening or not.

It goes something like this:

Trade 1- loss. Internal dialogue: "good trade- move on"

Trade 2 & 3- Break even. Internal dialogue: "after resisting the urge to take a strong setup out of context AND taking the other side of the market (the correct side) you STILL have nothing to show for it! I'm getting a little frustrated..."

Trade 4-loss. Internal dialogue: "So, after following my proven plan, I'm one stop away from having to stop for the day. The day has only just begun!"

....Before Trade 5...

"Here's a setup. But I've only just lost (Recency Bias) and it was right here (Spatial Bias). What if I get stopped trading in the opposite direction of the last trade I took? (again recency and spatial biases)...

....what if I hit the day's stop?"

As you can see, I took the trade for 19.2 pips. But the fact that it's a big winner, while nice, isn't the point. It's staying with "process-oriented thought processes" rather than "outcome-oriented thought processes" Being aware of the way we all think (see the above bias links) and steering myself toward the process is probably the single most important change I've made/ am making in my trading.

Focusing on what you're trying to avoid is like a cyclist who looks at the people he's navigating around rather than the place he wants to get to. You just end up flat on your face!

Day's Anatomy- 5th October 2012

Day's Anatomy- 4th October 2012

The Man From Sicily.

So I'm taking my daughter for a walk in the park before lunch on Saturday when I noticed a guy watching me intently from across the way. He didn't have a very amicable look on his face.

"Oh God, what does he want now", I said to myself. (At this point I'll disclose that I am a black man living in Italy. I've had more than my fair share of racially-motivated slurs thrown my way.)

I decided to employ the "eye gazing" technique I had read about in "The 4-Hour Work Week" by Timothy Ferriss, but had inadvertently stumbled upon years earlier whilst trying to expand my comfort zone. The basic idea is you have to hold someone's gaze until they look away.

I failed :)

Several minutes later, he approached me with the little boy he was looking after. He drew the boy's attention to the bubbles I was blowing for my little one. I said, "ciao" and we struck up a half-hour conversation.

It turns out that Francesco from Sicily was quite an interesting guy. He had studied Hotel and Catering like me, but now had a burning passion to return to Sicily as part of the "Carabinieri" to fight the Mafia. 
He cited all kinds of reasons for wanting to do so but, when I asked him if he wasn't scared, he quickly answered, "No, because I have nothing to lose".

That stayed with me for the rest of the weekend and, of course, conjured up a whole bunch of trading related themes. The usually greater fear of losing what we "own" over losing opportunity. The fears of what tomorrow may bring instead of living in the moment and doing what's right now. The fears of what yesterday did bring and how we should modify our behaviour instead of just doing what's right now...

The rich (in every sense of the word) get richer because they don't need to. They have enough resources to be able to play the game of risk to reward without actively holding on to what they already have. The poor get poorer because they are afraid to give up what they have in search of more.

Over to you Tyler!

 

Discipline- Truth, Desire and The Trading Way.

Why is it that so many find it hard to "be disciplined"?? I'm sure I'm not the only one who has felt it is like driving with the hand-break on when it comes to trying to enforce this elusive state of being on myself!

Above, there are some boxed-off definitions that give us a clue as to why that might be. Words like "corrects", "molds", "enforcing"...in my opinion, you will ALWAYS come up against opposition- both from yourself and others(and the market!!)- if you try to force a behaviour. 

The alternative to trying to fight yourself or others into doing what's necessary, is to evoke a sense of desire to do the right thing, because we only consistently do what we want to do, not what we feel we need to do.

Whatever gap exists between what you know you should be doing and what you currently are doing can usually be attributed to a gap between what you want and what you really need. Working on liking/wanting what you need, rather than keeping likes and needs separate, is, for me, the real secret to maintaining discipline long-term.

Only The Momo- Trade Room...??

It's Lonely In This Here Town..