Denial, anger...or spot the opportunity?

Faceless Bureaucrat:  I've spent 21 thrilling years in public service as a Faceless Bureaucrat.  I really enjoyed the first 16 and the last 2, there was only one rather soul destroying section latterly in which I felt I was being slowly lobotomised.

At that point I took my little briefcase and left the employment of the NHS for nearly a year to go it alone as a freelance consultant.  During that time I had great fun being paid more to work less with more respect.  But I missed being part of an NHS team and getting the Christmas cards.  I also chose the beginning of the worst financial crisis in decades to set myself up in an area which was, within 2 years, to be subject to some of the biggest cuts.  NHS spend on consultancy has sunk like the Titanic in the past 6 months.

Just as well I snuck back into the arms of the NHS 15 months ago then...?

 I've spent most of these 2 decades in the commissioning side of things rather than the provider (hospital) side.  If it's moved, I've commissioned it and so right now my job is to teach commissioners how to commission.  I deliver workshops to managers, GPs and nurses to help them understand what commissioning is all about and how to manage change successfully.  I give them the good practice theory with a handful of real life examples, get them to apply the theory to their own circumstances through exercises, we all have a jolly good time and 97% of them tell me they would recommend the courses to their colleagues.  Lots of them come back for seconds which is usually nice.

But the NHS has decided in its wisdom that this sort of thing should no longer be funded centrally, but instead happen on a pay-as-you-go basis, something that requires a different scale of organisation behind it to make the marketing, pricing and billing add up.  It's a difficult transition to make, particularly when it's unclear whether any NHS organisation is willing or able to host such a function and take on the inevitable risk involved.

One of the things I teach people about managing change is the transition curve people go through when undergoing any change that is potentially negative.  It starts with denial (it's not going to happen to me!), followed by anger (why is this happening to me?), followed by being lost (what's going to happen to me?).  That's the negative part of the curve from which some never move.  If you're smart you do that bit quickly and move on to the understanding bit (I see what's happening and why), acceptance (I can handle what's happening) and finally - if you're really lucky - advocacy (we should do more of this happening stuff).

So where am I on this transition curve?  My confession is that I've always rather liked change, my life has, frankly, been full of the stuff.  So I don't tend to linger on the denial or anger, rather I like to get my head into the future and try to spot the opportunities - as sure as thaw follows snow there will be some.

As my blog readers will know, I've already spent time and money investing in my future as a trader and am slowly working my way through the learning process.  This is my goal, over all other work goals.  I will be a successful trader, it's just a case of when.  It may take me 2 years, 5 years or 10 years but I'm committed.  I've met many successful traders and they don't have anything I don't.  With discipline, persistence and time it will come.

The question is, how do I keep the pennies coming in whilst I learn this new art?

There are many options for me.  I can allow myself to be made redundant on March 31st, take the pay in lieu of notice which is highly likely to be forthcoming and spend 4 months solid improving my trading. But if I need more time to become consistently successful at trading then I'll be back to job hunting again this spring/summer.  Not the end of the world I guess, the job landscape will be clearer by then and I'm confident I could pick something up, if not permanent then interim and manage to negotiate part time hours just as I have for the last 5 years to give me time to trade.

But if I'm made redundant in March I only get 4 months pay to see me off.  If I can hang on until past Sept 2 (the date I rejoined the NHS in 2009) then all my previous 20 years' service becomes valid for redundancy payment.  This means it would be so much better to be made redundant after Sept - I'd get 22 months' pay instead.  That would fund me to spend time trading for a lot longer...

The problem is not getting some sort of job to take me up to Sept, I've never had a problem bagging a job before.  The problem is that then they won't make me redundant.  I'm not in denial, honest!  I just can't see it happening.  If you've got the experience (which I have), are presentable (which I must be) and sufficiently able to adapt (no problems, love change) plus you're able to make decisions (definite tick) then the NHS never likes letting you go.  And more importantly (if I'm really honest) they hate paying big lump sum payments such as 22 months' salary to anyone.

The fact that I'm currently facing redundancy from April is such a rare and unlikely event for me that it feels like it is The Opportunity.  Of course there's a lurking thought that it may be difficult to get back into employment if I spend 4 months off but then a quick look back at my CV (which I've recently been updating...) reminds me that of the last 10 jobs I applied for I secured 9 of them. And that doesn't include the roles I was given when people approached me as a freelance consultant, I'm only counting those where I had to compete.

I don't want to appear arrogant here but part of grabbing the opportunities of change is about being able to objectively analyse the situation and your position in it, these are the simple facts.

So, having fast tracked my way through denial, anger and being lost I am now trying objectively to work out how I can benefit from this situation I'm in.  If I find another job now or by March 31st what will I gain over and above what I have now?  A sense of security.  Probably nothing more as the odds are in my favour that I can get a job later in the summer, or even wait until winter if I pay myself a dividend from my business account.

But if I sit it out and get made redundant I get 4 months' pay without having to work for it.  This equates to an unparalleled chance to invest time in trading.  An opportunity like that is unlikely to happen again.

Well, I've not yet made my decision.  I guess I'll have a chat with a few people about this and see.  It is of course quite difficult to make this decision because as a Faceless Bureaucrat one likes to have safety nets and minimise risk.  But let's face it, I'm transforming from Faceless Bureaucrat to Bad Assed Trader and Bad Assed Traders take risks to generate rewards.  The question is, am I more Faceless Bureaucrat or Bad Assed Trader right now?

Faceless Bureaucrat looks redundancy in the eye

Faceless Bureaucrat: The time has come to consider a Very Different Future.  My team in the NHS has been issued with our letters notifying us that we are at risk of redundancy.  They are consulting for 90 days and then will let us know for sure.

There are massive (management) redundancies taking place - unprecedented in the NHS.  So here I am on holiday in Phuket missing all the action going on at work.  There's life coaches lined up, interview and CV skills preparation training, there's counselling available for anyone feeling a bit down about the future and, even worse, I'm missing all the Christmas fun they've been putting on this week.  Apparently people have taken to wearing woolly jumpers and playing board games at lunchtime.  They've been auctioning promises and there's live comedy and canapes on Friday to cheer everyone up.

What with the fact that it's been snowing in England and the heating has apparently broken down in our offices it seems I picked a bad time to come to a place sitting on a steady 30 degrees and which I keep mistaking for paradise.

So I have instead spent my time attending meditation classes in order to improve the ability of my mind to concentrate and access the inner me or higher mind, however you like to see it.  I've gone to the gym nearly every day and had Thai massages on the beach daily too.  Of course I miss the office terribly.

I'm not trading until January 11 (11/01/11 - good binary number) as not only am I on holiday but it's all so unpredictable over the Christmas period.  I'll wait for things to settle down before putting any more money on the line and any time I have to dedicate will go on analysis and backtesting of strategies. So Bad Assed Trader is also taking a break.

I am considering my future options regarding work.  It still stands that if our team can generate sufficient income to cover our costs and can find an NHS organisation willing to host us then we won't be made redundant but this looks decidedly dicey right now.  I've made a list of contacts I may start approaching come February if necessary for possible secondment or short term contract, depending on what's happening.  I am not at panic stations yet, nor even considering taking a bus to get there.  I may be a faceless bureaucrat but I'm not a bad one at that.

Even so, I may have a lot more time to dedicate to trading come April...

Learning rather than earning...

Bad Assed Trader: My special thanks to one of my followers, Poobah, for advising that when I'm on holiday I should try holidaying.  Rather than trading.  I think I will take this advice now and resume trading properly after the first week of January when things are getting back into normality.

But before I restart my holiday I should share my latest trading escapades.  They are not major catastrophes, but nor are they stunning victories.  This trading lark seems to be about plodding forward relentlessly, trying to gain a sense of the analysis (objective assessment of price action), along with a measured approach to managing the trade (not jumping out too quickly and missing the real profit action nor hanging in there too long and seeing profits disappear).

Most importantly for me it is now about spotting myself angling for a trade and trying to make one where the odds are against success, or when once in the trade catching myself trying to make the trade go a particular way because that's what I want rather than what is actually happening.

This "willing" of the trade seems to be a common error amongst traders - we can blind ourselves to what is really going on and this really does not help because try as hard as we can we simply cannot control the way that the price of the currency pairs moves.  Apparently it takes a billion quid to get the price of the British pound to move a couple of pips (which I think is a few hundredth of a pence) so me sitting at the desk in my room in Phuket urging the little bars up and down is unlikely to have much impact.  Particularly when I don't have more than about a hundred quid on any of my trades.

This may sound bleedin obvious but when you get drawn into a trade it is easy to find yourself believing you know what will happen next, when of course you don't.  You may guess correctly, you may have probability on your side in your predictions, but you never actually know and we have to keep reminding ourselves of that.

So, what have I been up to?

Well, as usual, I've had some excitement and a win, along with a couple of errors.  But hey, I'm still a learner rather than an earner so I'm not too hard on myself.  I'm reflecting in order to improve, that's the main thing.

I spotted that the Japanese yen was ready to bounce up yesterday late morning so I put a long (buy) trade on.  I had a good set of evidence in my favour as it was bouncing on a few different lines on 3 different time frames and the price action on the hourly time frame showed price was repeatedly testing lows but bouncing back up.

It took a while before the trade really took off but when it did - and I was watching it at the time having come back from a tailors shop in Patong getting fitted for a couple of new dresses and a jacket - it really went for it.  Within an hour or so I had hit my 1% return but I had put my target higher and so was trailing my stop loss up behind price action so that I would lock in profit but not take the trade off prematurely.

I watched price action peak and start to turn and I did think to myself (this was at about 1.2% profit) "hmm, shall I take the profit now or keep trailing the stop loss?". Well, readers, I will not make the same mistake again as I have now agreed with myself my future plan in this scenario.  The thing was, I was then going out to dinner so had to decide to either take the profit or leave the stop loss and target on and let the trade take itself out.  I did the latter.  Price then dropped to my stop loss and I made £85 instead of £140.  Next time I will take the profit when I see price turning for any intraday trade that I can't keep watching and trailing up the stop loss.

That was the good news.  The bad news is that I jumped in a little prematurely to a EURGBP trade...twice.  I had been studying the pair and made a note in my book that price was likely to come up to 0.8400 to 0.8420 before dropping again.  I saw price had come up to just below 0.8400 and that there was a resistance pivot level at 0.8412 which acts as a bit of a ceiling...usually.  So I entered the trade at 0.8394 as it was dropping and put my stop loss at 0.8418 thinking this was well clear of where price was likely to go.

Of course it wanted to peak one more time didn't it - up it went to 0.8417, just below my stop loss but the spread (difference between buying and selling from the broker) meant that it took out my trade.

When I came  back from dinner I checked and saw this had happened and thought "Oh well, sometimes price action does peak one more time before dropping, the same parameters are in place so I'll place the same trade again - this time one of the indicators, MACD, looks even better in my favour". So on went the trade and off I went to bed.

When I checked this morning of course the price had decided it still wanted another peak - this time right up at 0.8439, well over my stop loss, so out I went again for the full 1% loss.

Having re-analysed the trade I think this was one I was "willing" to work rather than really objectively analysing.  Live and learn, live and learn.

So I'm off now to sit by the pool in the far eastern warmth and relax.  No worries.

Faceless Bureaucrat has asked for a quick look in but I'm beating her back down.  She wants to update you on the job/redundancy front, but I've told her she'll have to wait for now as the pool beckons.

So Faceless Bureaucrat will be checking in again soon....