"The journey of a thousand miles begins with one step." Lao Tzu
So today was the last day of trading for 2022 and I had my first ever 40 point trade! Well, I was half a point short of 40 points, I made £19.80 which is 39.6 points if you want to be pedantic, but on reflection it's not the amount of points that I made that matters, nor the fact that my strategy worked. No. It's something much bigger than either of those. Sure it's nice to end the year with a winning session and also my biggest ever single trade to boot, but again, neither of those things are what really matters. What really matters, is what that trade signifies, and also the losing trade I took right afterwards, that I consider to be most important to me if I am to stand any chance of achieving my goal of becoming a full time trader. They signify, no, they demonstrate, just how far my psychological development as a trader has come since that first day back in May when I dipped my toes into the warm yet often murky waters of day trading, and it shows me that I can become the successful trader I aspire to be, the potential is there. It's still very much in its infancy and embryonic, but it's there.
When I look back over the year (7 months technically) it has not been successful financially, far from it, but what have I learned not just about trading, but about myself?
Well to begin with as I said, it has not been successful financially. I've lost just under half of my initial deposit. I started with £1,000 and currently my account sits at £518.10. That's a loss of 48%. Not exactly what I had in mind when I made that deposit on the 20th May, my birthday, and nervously placed my first trade, which incidentally was a losing trade. In fact I had big hopes and even bigger dreams of doubling my account every 10 weeks! So with that in mind, I should be sitting with £10,400 right about now! Just a little bit short then. I can't even claim the ignorance of youth seeing as I'm 48(!), but why am I so happy and positive not only about my current position, but also the future of my trading? It is what I have learned from this loss, what it has taught me about myself and where I now know I need to apply my focus that fills me with confidence for the coming year.
Right here, right now with hand on heart, I can honestly say that I don't care that I've lost half my deposit. I don't care that I don't have a £10k account. I don't care that I am not trading what should be by now £8 per point. I don't care that I am not hitting my target of 100 points a week. I don't care about any of that because I know now that none of that truly matters. But back in May though, oh it would've been a very different story. Those are the exact things that I, as a 'new' trader, would've cared very deeply about simply because that is what new traders are lead to believe is important. Just watch any YouTube ad with regards to trading. I would've also cared about the need for all my trades to be winners. I would've cared about how much I lost in a single trade and how many losing trades I had had. I would've cared if I didn't hit my 20 point a day target. I would've cared about learning every indicator and how they might turn out to be the fabled 'holy grail' of trading. I would've cared about missing big moves, and so on. In fact if you had told me back in May that at the end of the year I would be where I am right now, I probably wouldn't have even bothered to deposit. But instead, I am grateful for the last seven months and for where I am right now. I am grateful that I have had the experiences that I've had because they have lead me to this very moment. Where I am right now is sadly somewhere many aspiring traders will never get to go because they'll give up long before they do. You see, it's because of those experiences that I am beginning to learn about the most important aspect of trading. Me. Myself. My psyche, and how it affects and influences every decision I make. How it's so much more important to be in control of my mind, my emotions and my actions, than it is to know the Fibonacci levels off by heart, or the workings of the MACD. I believe I have come to understand in my brief trading journey so far, an underrated and often ignored element of being a consistent winning trader, that is paramount to their success. It's not technical knowledge, or their ability to read a chart. Of course those have their place and their importance, but above all of that, what matters more is a traders knowledge of themselves and their inner psychological workings. How they act in certain situations. Their mental strengths and weaknesses. Their ability to be in the moment, to be in control of their emotions. To be able to act without hesitation or remorse. To accept the outcome of each trade as it happens, win or lose. To acknowledge the importance of process over results. To see the market for what it is, information, and to use this information without bias or prejudice. Trading, good trading, is psychological. It's not you versus the market, it's you versus you.
But I haven't come to these realisations on my own. Most definitely not. When I first started out I was firmly in the 'I must learn every technical indicator' camp 'as this is the ONLY way to make money trading.' I considered that I probably would need to buy a course in order to learn as much as I could. I was well and truly sucked in by the YouTube gurus and was ready to part with my hard earned cash in return for their 'knowledge'. But then something happened. I clicked on a video one day that came up in my feed by a guy called Tom Hougaard titled 'A Day in the Life of a High Stake Day Trader.' and it changed my path completely. Something in that video resonated so strongly with me that it stopped me in my tracks and I began to watch other videos of his. Looking back on it now, if I had to pinpoint what it was I'd say it was the simplicity of his trading that initially grabbed me. You see, he doesn't use any indicators when he trades. Nothing. Not even a simple 20 EMA. His charts are 'naked.' This was a revelation, a thing of beauty! Not only that but he trades live (he has a free telegram group). All of the other traders I had watched so far were all after the fact traders. "I bought here, and sold here." He also talked almost relentlessly about the 'psychology of trading' and how it's your mindset, and the need to control your emotions that makes you money and separates you from the 90%, not your technical knowledge or your ability to read a chart. He helped me realise that 'patience' is an edge, and one that many many traders don't possess. People use the term 'mind blowing' fairly frivolously nowadays, but this really did blow my mind. It lead me to find out about another great trader/ teacher, Mark Douglas, and his book called 'Trading in the Zone.' This also had a profound an effect on me so much so that I made posters of his beliefs and his definition of a 'Consistent Winner' and they are above my monitor so when I trade I am reminded of them.
I believe very strongly in the fact that our beliefs shape our individual physical universes, and that if we change our beliefs, we change our lives. I believe in vibration, manifesting, and the Law of Attraction and how everything vibrates because everything is energy so if we vibrate at a certain frequency we attract more of the same. I believe our thoughts can influence our reality. I am not sure why these two gentleman 'appeared' in my life at the time they did, but I am grateful beyond measure that it happened when it did as I feel I was surely destined to become a member of the 90% club. But now, I feel very much like I can and will be in the 10% club, that of the consistent winning traders. I still need to continue to learn about technical analysis of course, but I will dedicate much more of my study time to the mental aspect of trading, and in learning about 'myself' more than about candlestick patterns.
With this being said I still have a very, very long way to go, that I know. In fact, I don't honestly believe that developing and learning both about myself and about the technical aspect of trading actually have a final destination. Learning is a constant and dynamic undertaking, just as the markets themselves are constant and dynamic. But I am seeing tiny little positive changes in both my trading and my psychological or emotional control, when trading. For example, I was very much a fearful trader. By that I mean that as soon a trade was in profit I was looking for any reason whatsoever to close it as soon as I could. I still am like this on occasion only now I possess the mindfulness to recognise those feelings, and to exercise control over them and to stay in the trade far longer than ever before. Now I find myself more concerned with moving my stop loss to breakeven as soon as I can, instead of getting out and realising profit. Sure, there are still plenty of times when my automatic response will suddenly kick in and without consciously realising, my feelings/ emotions have lead me to click the mouse and I am out of the trade. But, nothing happens over night. Evolution takes time. The next great challenges for me are to have a trade go into profit, move my stop to breakeven, let the trade run, and then have it go back against me and I end up with zero. To understand how I feel about that pain and how to process it so it doesn't influence my subsequent trades. Also, to begin to add to my winning positions as and when the market signals me to do so. These actions are what Tom Hougaard and to some degree Mark Douglas, consider to be the actions that truly separate the 10% of great traders from the 90% of not so great traders. These actions are what creates not just a consistent winning trader, but they help cultivate the mindset required to become a consistent winning trader. And mindset is everything, not just in trading, but in life in general.
So there it is. Not a successful year financially, but what it lacks in monetary gain has been more than compensated for in terms of mental gain, and this is what I feel in time, will lead to a change in my fortunes and thus my balance.
Finally now I feel like my journey has a purpose, a destination, and I have in my possession the blueprint to get there. So I look forward to 2023 with a keen anticipation, win or lose because I know that each trade is a single step further down that road, each trade is a single step closer to my goal, each trade is a single step closer to becoming the trader I not only want to be, but more importantly, the trader I know I can be.
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