Faceless Bureaucrat gives way to Bad Assed Trader

Bad Assed Trader:  Trading is a truly strange game.  It seems that just when you start to think “Oh my, this is a long, long game.  I’d better chill out, take my time, relaxxx…” the thing starts to take a turn for the better.

On Wednesday I was at a bit of a low.  It was a hangover from the weekend.  Not due to an alcoholic blitz.  Rather I had been assessing my performance in this new year and found it sadly wanting.

I had thought I was turning a corner.  I had twigged it was a big corner but had not appreciated just how big.  In reality I think I was just anticipating the corner rather than actually experiencing it.

A triumph of hope over evidence.  Much like Mr Lansley’s current plans for the NHS many would argue.

So what did I do when I found my performance so disappointing?

I did not give up.

I shrank the account size on which I trade threefold to reduce my risk (and therefore loss) right down to the bare minimum.  I’ve been trading just 30p a pip.

My priority has to be to preserve my capital.  I want to stay in this game long enough to make it.

As I’m only trading “snipers” at present involving 20 pip moves this means my maximum loss is £6.

Some traders resort to “paper trading” when their confidence hibernates.  That won’t work for me, I need to be able to handle the money and know my actions mean something.

Returning to Wednesday’s low then.  I was a bit pessimistic.  Most unlike me.  I was trying to gee myself up by remembering just how much I’ve learnt in recent months and how I knew absolutely nothing about this craft before I started.

But as I reflected on my actual progress in terms of outcome (ie making money) which is so slow as to be at standstill if not actually in reverse, I allowed myself to start believing that this will take time, that I don’t have to prove myself immediately.  And then I just resigned myself to that.

It seems my mind shifted into the right gear for trader mentality at that point.  That point where I gave up believing that today I would start to make big money.

When I sat down to scan for early morning trades it was different.  This time I had no expectations.  I was unhurried and felt quite detached from the scene.

I happened to spot a long (buy) trade on Swissy Yen (CHF JPY) and took it.  An hour and 10 minutes later it delivered my 1% (the princely sum of £6).

That was it for the day and I confess to feeling a little pleasure, still in a rather detached way, that I was actually “up” on the day…for a change.

Yesterday morning I approached my trading desk with a similar attitude.  If it comes then great, if not, so what.

I scanned and found little ready to go.  Then EUR GBP set itself up for a long trade (the Euro going up against the pound).  I took it, in a rather ambivalent fashion.  Again, one hour and 10 minutes on and the little chicken came home to roost.  Another six quid in the bag.

I thought I’d stop there as being “up” for two days in a row seemed a good achievement for me based on previous record and I felt it might be nice to see how it felt staying “up” so to speak.

However, I had been waiting for a Euro set up – to buy Euros against the dollar – and just as I was thinking I’d get on to (paid) work so a set-up occurred.

Strictly speaking I shouldn’t have taken it as it wasn’t a “sniper” but a “pivot” trade, meaning price was breaking up through a key technical level.  When this happens there’s a high probability of it reaching the next technical level.  In this case that next level was about 60 pips away.

I looked closely at all the time frames with this same rather odd sense of detachment and found the evidence definitely in my favour to go long (buy).

So in I went.

I was so detached that initially I didn’t bother to place my usual target order of 20 pips and went off to the loo.

When I returned the price was haring up and I’d already made one and a half percent.  You’d have thought I’d have jumped for joy.  But no.  Just a slightly raised eyebrow and a moment’s consideration as to whether I should take all the profit straight away (a bird in the hand being worth two in the bush etc) or take half and move my stop loss to breakeven (my previous tactic) or leave it to run to the next key technical level.

I was that detached that I decided to set a target just below the next key technical level whilst also moving my stop loss to break even so I was in a “free” trade – no risk and maybe I could get to my target as the momentum certainly seemed to be there.

Well, this time within 40 minutes of me placing the trade my target was hit.  A full 49 pips later, delivering me nearly 2.5%, a £14.70 addition to my bag, snuggling up against that 1% I’d netted on the EUR GBP trade.  I was nearly 3.5% up.

My best day trading ever.

And I knew I had to blog it.  Not to boast as really I have nothing to boast about – my record has been, frankly, crap.  This could just be a blip.  Or luck.  But I have to reflect on my different mindset and the contribution it made to my success.  I have to be able to replicate that mindset.  As they say in the trading game “Trading is 90% psychology and the rest is in your head”….