Bad Assed Trader: I'm blogging from my trading desk in France today. This sounds more glamorous than it is. My desk is in fact a table identical to one I saw in a local french bakery the other day, with a marble top and wrought iron legs. Mine has a laptop on it rather than flour, dough or patisserie but it's the same table and probably belongs in a bakery. But for now it's a trading desk.
I like the fact that technical forex trading is a craft requiring few tools. On my desk I have only a small notebook in which I set out the trades I plan to take and a small pile of forms which I call my Daily Analysis (it's a simple form I complete every evening and review every morning on which I record what is happening to each of the 30 odd currency pairs I'm willing to trade, whether they are going up or down and more importantly what needs to happen for my trading set up to occur).
I also have a couple of pens and two highlighters to pick out the currency pairs I'm presently stalking and my current guide book: "The Daily Trading Coach" by Brett N Steenbarger.
Sadly there's no patisserie on the table but this past week I have indulged in numerous eating marathons and frankly couldn't face a choux or eclair however inviting. These marathons, when done by the french, seem to result in trim figures - the evidence of triumph of continual troughing over fast food. But when done by us, the Brits, usually end in tears when we get home and face the scales and another set of clothes too tight for comfort.
But enough of my feeble attempts at the french lifestyle. Today I am reminding myself, before I enter another trading week on Monday, that to be an excellent trader I must do as an excellent trader does. This seems obvious I know but I'm still at the stage where I have to remind myself.
Having developed my strategy (shared in detail last week here on this blog), I am now getting into the rhythm of analysis, planning the trades and executing them according to plan.
Trading has become less effort and whenever I am tempted to cut short a trade because it is well into profit and I know it's due to retrace a bit (which can be the uncomfortable part as you watch your profits melting away) I am able to remind myself: what does an excellent trader do at this point? An excellent trader lets the profits run - they expect the retrace and as they've only entered a trade about which they are confident then it does not feel uncomfortable because they anticipated it happening. And so I sit on my hands.
Similarly, when I have been stalking a trade for days and start to see price action indicating that the necessary change of direction is in the air I remind myself that an excellent trader waits for evidence and confirmation before placing a trade. No more jumping in. This is not what excellent traders do. Gradually, by continuously reminding myself of what an excellent trader does I am losing the urge to make these amateur errors.
And just when I think I'm getting the hang of spotting, executing and managing trades I reach a point in The Daily Trading Coach where Brett talks about the challenges of making trading your income and unearths a whole new set of tasks and thought processes that I must master.
Apparently I must diversify to ensure my trading technique does not become redundant due to market changes, or as he puts it: "Diversification in your trading enables you to stay afloat when any one of your strategies stops working for a while and becomes obsolete." But I'm not sure how this relates to my trading strategy which is all about spotting a turn from up to down or down to up and trading it.
When I read on I discover that I must track my returns in different conditions. So for example when I'm trading the return back to trend following retracement, or when I'm trading counter trend (the retracement itself) or when I'm trading in a ranging market where price ping pongs between two levels - I should know which of these situations gives me the best results.
I should also know which currency pairs bring me the best results. And if I sometimes use my trading strategy principles on a smaller time frame then I should know which time frame gives me the optimum return. I should know whether I get better results from trading the bounce against horizontal levels or moving averages.
Basically I need to scrutinise every aspect of my trading to see and know which parts are most effective.
It seems my trading analysis will need to be taken to a new level. Up until now I have only assessed my past trades for what I did right or wrong in spotting, placing and managing the trade as this has been my main concern. I can feel another set of goals coming on and the ghost of Faceless Bureaucrat haunts me still.
But if Brett says this is what excellent traders do then this is what I must do. I feel as though I am almost back at school, trying to earn the gold star from the teacher judging my work. And yet I am judging my work so I am the one awarding the gold star as well as the one being excited about getting one. Which is a spot odd.
I guess it's all about clarity as to what excellent means and then taking focused action to deliver that.
Time to award myself a gold star for recognising the next step I reckon...
I like the fact that technical forex trading is a craft requiring few tools. On my desk I have only a small notebook in which I set out the trades I plan to take and a small pile of forms which I call my Daily Analysis (it's a simple form I complete every evening and review every morning on which I record what is happening to each of the 30 odd currency pairs I'm willing to trade, whether they are going up or down and more importantly what needs to happen for my trading set up to occur).
I also have a couple of pens and two highlighters to pick out the currency pairs I'm presently stalking and my current guide book: "The Daily Trading Coach" by Brett N Steenbarger.
Sadly there's no patisserie on the table but this past week I have indulged in numerous eating marathons and frankly couldn't face a choux or eclair however inviting. These marathons, when done by the french, seem to result in trim figures - the evidence of triumph of continual troughing over fast food. But when done by us, the Brits, usually end in tears when we get home and face the scales and another set of clothes too tight for comfort.
But enough of my feeble attempts at the french lifestyle. Today I am reminding myself, before I enter another trading week on Monday, that to be an excellent trader I must do as an excellent trader does. This seems obvious I know but I'm still at the stage where I have to remind myself.
Having developed my strategy (shared in detail last week here on this blog), I am now getting into the rhythm of analysis, planning the trades and executing them according to plan.
Trading has become less effort and whenever I am tempted to cut short a trade because it is well into profit and I know it's due to retrace a bit (which can be the uncomfortable part as you watch your profits melting away) I am able to remind myself: what does an excellent trader do at this point? An excellent trader lets the profits run - they expect the retrace and as they've only entered a trade about which they are confident then it does not feel uncomfortable because they anticipated it happening. And so I sit on my hands.
Similarly, when I have been stalking a trade for days and start to see price action indicating that the necessary change of direction is in the air I remind myself that an excellent trader waits for evidence and confirmation before placing a trade. No more jumping in. This is not what excellent traders do. Gradually, by continuously reminding myself of what an excellent trader does I am losing the urge to make these amateur errors.
And just when I think I'm getting the hang of spotting, executing and managing trades I reach a point in The Daily Trading Coach where Brett talks about the challenges of making trading your income and unearths a whole new set of tasks and thought processes that I must master.
Apparently I must diversify to ensure my trading technique does not become redundant due to market changes, or as he puts it: "Diversification in your trading enables you to stay afloat when any one of your strategies stops working for a while and becomes obsolete." But I'm not sure how this relates to my trading strategy which is all about spotting a turn from up to down or down to up and trading it.
When I read on I discover that I must track my returns in different conditions. So for example when I'm trading the return back to trend following retracement, or when I'm trading counter trend (the retracement itself) or when I'm trading in a ranging market where price ping pongs between two levels - I should know which of these situations gives me the best results.
I should also know which currency pairs bring me the best results. And if I sometimes use my trading strategy principles on a smaller time frame then I should know which time frame gives me the optimum return. I should know whether I get better results from trading the bounce against horizontal levels or moving averages.
Basically I need to scrutinise every aspect of my trading to see and know which parts are most effective.
It seems my trading analysis will need to be taken to a new level. Up until now I have only assessed my past trades for what I did right or wrong in spotting, placing and managing the trade as this has been my main concern. I can feel another set of goals coming on and the ghost of Faceless Bureaucrat haunts me still.
But if Brett says this is what excellent traders do then this is what I must do. I feel as though I am almost back at school, trying to earn the gold star from the teacher judging my work. And yet I am judging my work so I am the one awarding the gold star as well as the one being excited about getting one. Which is a spot odd.
I guess it's all about clarity as to what excellent means and then taking focused action to deliver that.
Time to award myself a gold star for recognising the next step I reckon...
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