What I'm about to say is highly controversial, and likely to raise many eyebrows. So, if you are really new to trading, I suggest you skip this post.
Ever since I started trading, I've always had the bad habit of leaving profits on the table - way too much. Bad habit number 2: I hardly use a hard stop. Because of these really bad practices, I've had no negative months. Now, I don't know if that's a good thing. Apparently, there are traders out there who are making a million a year who complain about not having a negative month. The reason: they see their consistency as a sign that they've not been working hard enough.
Never mind that the logics simply baffles me - I'm not here to understand them.
I just want to understand me.
For many weeks now, I've cared so much about my trading that I've literally given up living a normal life. I care so much about not losing what I've made that I stare at my charts the moment I put on a trade until I exit. I go into every trade not wanting to lose. So, I scratched my trades fairly often, and other times I hold a losing trade until I see that the risk to hold on til it becomes profitable is getting ridiculous. I haven't done this based on any kind of calculation, but I notice that it always takes me 7 points in ES and TF to know that strategic exits are no longer relevant - that I'll probably have to resort to PRAYING for days and weeks for the trade to come back. I don't hold my trades overnight - so waiting days and weeks is an idea that I simply can't entertain.
For reasons that I haven't quite figured out, I started getting frustrated with my style of trading. I desperately wanted to master the art of giving up control - my goal is that one day I'll be able to put in a bracket order, then go do my dishes and laundry or to bed. The more accurate I am with where the market's going to trade to, the angrier I get with myself for not being able to commit to trading my plan by simply putting on a bracket order.
I tentatively concluded that my biggest problem is fear - fear of never becoming a consistently profitable trader. Note: consistency to me is 99.9% winning DAYS.
If by now I haven't made you fall off your chair, this will at least raise your eyebrow: I think setting a target and a loss is BS (precisely why I said this is a censored post). I often wonder, so if the market doesn't do as I have calculated that it will do, it should take my money for my lack of prophetic skill?
I trust my charts to tell me everything I need to know to develop a trading idea. I trust the market depth to tell me the right time to execute the idea. I don't ever queue in line to enter and exit. I don't put in my target for reasons that I've mentioned above. When I want out, I hit the price above or below market and I'm out instantly. When I want in, it's the same procedure.
Many will see that as an utterly bad deal. To each his own. To me, there's never a perfect price to get in at. But there's a perfect MOMENT: when market's offering an opportunity. It's like taking a train. You can't ask a train to come to you. You have to follow its schedule. When one comes along, you hop on. If you insist on getting on a train at exactly 08:03:03, you might never get on one.
I'm speaking purely from my own experience. I might form stories and hypothesis about the market but that's really just to give me a boundary within which I can express my trading ideas. My decision on each trade is made in real-time, and I don't really care where I said I'll enter. I operate within a 5 to 10 point zone, and I will enter at any point within that. And the zone moves when there're new support and resistance. And I'll exit as and when I pick up something that makes me feel uncomfortable about staying. It's mostly momentum, but many times, it's because of newly developed chart patterns that give clues as to whether I'm still on the right side of the market.
And because of that, I can change my view many times in a day. So I get in and out, all for the sake of maintaining zero loss at the end of the day. Seriously, I really don't like losing money, whether it's my own capital, or trading profits. I just don't see any sense in that. If I have found a way to consistently NOT give money to the market, at my own expense (of having to give up the really big moves), I don't see why I should let "probability" even come into the picture.
I believe in giving the market a max of 7 points everyday in exchange for a chance to see how my trading idea would work out. I do my best not to let it take any of it, and I'm definitely not offering them by way of "stops".
I wanted to find out if it's ridiculous to expect a target to be hit, and I chose today coz I thought it's a good day to kill 2 birds with one stone. The other thing I wanted to find out was how much pain I can take.
Conclusion 1: it's ridiculous to expect a target to be hit 100% of the time. And when it doesn't get hit, you get penalized. So, I'm not doing it - setting targets and just letting it go auto-pilot. If I'm not in a trade wanting 100% for it to be a winning trade, why would I put it on in the first place? Why do I want to go into a trade that offers me a 50% chance that I'll get the prize and 50% that I'll lose my own money?
Conclusion 2: I can take a lot of pain. Surprisingly. But i'll definitely cry buckets tmrw to get the negative ions out of my system.
Conclusion 3: I should never trade a day like today. From now on, no trading for me on FOMC, non-farm payroll, and Fed talk days. And definitely no trading the few days before and after Xmas and new year.
Conclusion 4: There's nothing wrong with the way I've been trading. I've been overly critical of myself, and kicking myself too hard. I am done with focusing on how much I used to make. Uncertainty is something I can smell every moment I'm in the market these days, and my trading style is simply a manifestation of my sense of insecurity, which I am going to start to see as being totally acceptable.
I need a brand new set of ground rules.
