Dealing with the Pain of Trading: Part One

Bad Assed Trader:  You might have guessed from the title that this blog is not going to be a gloating one. But whenever I get knocked back I do take stock and try to find something to learn from what happened and today is no different.

I had thought that the most painful part of trading would be losing a trade.  I don’t find that especially painful anymore, particularly if I have followed my rules.  I know that losing is part of the randomness that is the market and it’s the stake you put on the table to play the game.

Last Thursday I discovered a new pain.  The pain of seeing price go exactly where you knew it would, without giving you the chance to trade it.

Last week was not the best of weeks trading-wise.  The tail end of the previous week was disappointing and then I was unable to trade on Monday and Tuesday as the Euro had been retracing on the daily chart and so on the four hourly price was just bouncing around the 50MA rather than showing a decisive trend which I need.

By Wednesday my patience was obviously wearing out as looking back the price was still choppy on the hourly and four hourly charts but I managed to persuade myself that conditions were ok to trade and off I went.  Two losers and a break even trade later and it finally hit home that Wednesday was not the day the Euro would start its journey north again.

So up I bounced on Thursday morning, all ready to go and find the Euro’s left without me.  It shot off without bothering to warn me.

Now I know I can’t take this personally.  The Euro, and the thousands of traders trading it, know nothing of me and my set ups. They have no obligation to form the particular pattern I look for and let’s face it they wouldn’t be able to if they tried.  But when you’ve been waiting for something for days and had a couple of aborted attempts and then the darn thing goes and runs off without you it can be difficult to accept.  Hence the pain.

But accept it I must.  It’s the name of the game with trading.  This will happen again.  And again.  Get used to it girl, I tell myself.

I’m over it now.  I sat myself down and reminded myself that there will be other opportunities, that this is a long term game, that it matters not one jot in the scheme of things.  All true.  Feeling pain is just resistance to the truth, the pain went once I accepted those things.

And then I think about what I’ve learnt.  The last few days were choppy and no good denying that.  When it’s choppy it’s best to steer well clear, otherwise you just pay for your inability to stay out.  It’s all part of that discipline.  So no more trading in choppy seas, just stick to the rules and understand that just because you have a set up, doesn’t mean every big move is going to announce its impending arrival with that exact pattern.  Duh!

But this is just the initial part of my analysis into my reaction.  It's not enough to just accept this.  I have to dig more deeply into why I react the way I do, how I have dealt with things in the past and why they need to change.  Watch out for part two....