Bad Assed Trader: Like a reformed alcohol-misuser abstaining from the demon drink I am learning to resist the siren calls of the market. Adopting my new approach - only trading the Euro (EUR USD) and only trading my sniper/sniper pivot strategy according to my very strict rules - has already tested my metal considerably.
On Monday and Tuesday I hung around my computer for hours and no set up came. On Wednesday I followed my rules and took a trade which bombed within the hour taking my 1% with it. My set up then occurred again within half an hour so I took it again. If my rules had been to take 20 pips then this one might just have come home. However, I had set a reasonable target and was obliged to wait for price to hit it. I was watching it though as it faffed around for so long, on a gentle incline in my direction, that it had not hit my target when Member Fisher of the US Federal Reserves started speaking.
One of my rules is not to trade whilst the news is on and I know how much volatility these guys can create when they start to speak, so when I saw price action start to tank I pulled that trade for a 50p loss (1 pip) and was glad I had when I saw it continue rapidly in that direction.
This morning the Euro has been under the 50 moving average on the hourly chart so although I was up and looking at the charts at 6.30am despite a night on the town with some girlfriends last night, I turned the computer off and read the papers in bed instead.
I have had to remind myself repeatedly the mantra the professional traders say that "No position is still a position" and that "Knowing when to stay out of the market is key to success". So I have not been cruising for opportunities, I am sticking to my rules and preserving my capital for the high probability trades that occur with my set up.
Adjusting to this position is tricky as one feels one should be doing something. Instead I have to look at doing nothing as a really positive thing to do. I remind myself that to hit my monthly target of 10% I only have to place a couple of trades a week and that includes losing trades. If that means that this week I've placed a couple of losers then the likelihood is that next week I'll be placing one or two winning trades bringing in something closer to 3% each.
I have to accept, on a deep level, that staying out is a positive thing to do. This includes noticing significant price movement and opportunities to trade, but staying out because they do not meet my criteria rather than being seduced into lower probability set ups.
It is not easy to stay out but I understand now that this is absolutely necessary if I am to succeed, with any consistency, at trading. In my head I furiously play Orpheus's lyre (see my last blog) and gradually the siren market voices die away...
On Monday and Tuesday I hung around my computer for hours and no set up came. On Wednesday I followed my rules and took a trade which bombed within the hour taking my 1% with it. My set up then occurred again within half an hour so I took it again. If my rules had been to take 20 pips then this one might just have come home. However, I had set a reasonable target and was obliged to wait for price to hit it. I was watching it though as it faffed around for so long, on a gentle incline in my direction, that it had not hit my target when Member Fisher of the US Federal Reserves started speaking.
One of my rules is not to trade whilst the news is on and I know how much volatility these guys can create when they start to speak, so when I saw price action start to tank I pulled that trade for a 50p loss (1 pip) and was glad I had when I saw it continue rapidly in that direction.
This morning the Euro has been under the 50 moving average on the hourly chart so although I was up and looking at the charts at 6.30am despite a night on the town with some girlfriends last night, I turned the computer off and read the papers in bed instead.
I have had to remind myself repeatedly the mantra the professional traders say that "No position is still a position" and that "Knowing when to stay out of the market is key to success". So I have not been cruising for opportunities, I am sticking to my rules and preserving my capital for the high probability trades that occur with my set up.
Adjusting to this position is tricky as one feels one should be doing something. Instead I have to look at doing nothing as a really positive thing to do. I remind myself that to hit my monthly target of 10% I only have to place a couple of trades a week and that includes losing trades. If that means that this week I've placed a couple of losers then the likelihood is that next week I'll be placing one or two winning trades bringing in something closer to 3% each.
I have to accept, on a deep level, that staying out is a positive thing to do. This includes noticing significant price movement and opportunities to trade, but staying out because they do not meet my criteria rather than being seduced into lower probability set ups.
It is not easy to stay out but I understand now that this is absolutely necessary if I am to succeed, with any consistency, at trading. In my head I furiously play Orpheus's lyre (see my last blog) and gradually the siren market voices die away...
I believe Paul Newman said it best: "Sometimes nothing can be a real cool hand".
ReplyDeleteFab quote Nelly and absolutely spot on.
ReplyDelete