Wednesday, June 24, 2009
6/24/09 A great day!
Did I make money today..... yes. Have I made money or scratch even all week... Yes. Is that why today was a great day... No! It was because I figured out a major reason for my equity curve issues. After tracking this weeks trades at the Smart Trade Pro trading bootcamp I quickly realized that one: I need to really go back and track more trades and two: that I am exiting my trades too quickly by 2 different means.
The first way is by simply moving my stops way toooooo quickly. The second way is by just exiting when I get nervous from a small retracement.
I am only trading one contract and I am trading scared.... not as scared as I used to mind you but still scared. The one thing I am doing right is I am much more diligent about my 3:1 payoffs. That has been the main reason why I have not blown up in the last 6 months.
These issues are very common.... way to common for us traders. I fact they may be the largest reasons why most traders fail. Most traders don't even know they have those issues. At least I know.
How do I fix this. I am changing my beliefs about how to trade better. It's not by taking off too soon in an effort to capture gains too soon. It's by letting my winners run to my 3:1 payoff and not trailing too closely or by just taking it off too soon.
Constant diligence is where it's at. Looking at my numbers or swing hi/lo pivots and keeping to my planned trades.
The other possibility is to appease my psychological issues by trading 2 contracts and using one as a hurry up contract. There are a couple of issues with this. You have to back test each contract as a separate trading system and get a SQN for both... The sacrificial contract trade and the plan trade. Only by tracking the performance or lack of it will I be able to completely change my beliefs regarding that style of trading.
Trader X
The first way is by simply moving my stops way toooooo quickly. The second way is by just exiting when I get nervous from a small retracement.
I am only trading one contract and I am trading scared.... not as scared as I used to mind you but still scared. The one thing I am doing right is I am much more diligent about my 3:1 payoffs. That has been the main reason why I have not blown up in the last 6 months.
These issues are very common.... way to common for us traders. I fact they may be the largest reasons why most traders fail. Most traders don't even know they have those issues. At least I know.
How do I fix this. I am changing my beliefs about how to trade better. It's not by taking off too soon in an effort to capture gains too soon. It's by letting my winners run to my 3:1 payoff and not trailing too closely or by just taking it off too soon.
Constant diligence is where it's at. Looking at my numbers or swing hi/lo pivots and keeping to my planned trades.
The other possibility is to appease my psychological issues by trading 2 contracts and using one as a hurry up contract. There are a couple of issues with this. You have to back test each contract as a separate trading system and get a SQN for both... The sacrificial contract trade and the plan trade. Only by tracking the performance or lack of it will I be able to completely change my beliefs regarding that style of trading.
Trader X
