As captain of this ship it is my job to ensure I keep her on course in choppy conditions and with changing winds. But these last few weeks I feel I've been trying to sail against those winds, instead of with them.
In total I've dropped 160 points in the last 4 weeks. In the grand scheme of things that's not that big a deal, but when you break it down as to why, I feel like it actually is.
Some of those lost points were from mistakes on my part due to nothing else other than poor focus. For example, this week I added to a FTSE trade when then went against me and stopped me out. This meant my original position went from a winning position to a losing position. However, the ADD was actually a good trade. The market had broken through, finally, 50 minutes of resistance at a level and had some good momentum. Now I know that a larger majority of breakouts fail and I was prepared for this. But it wasn't this trade which gave me cause for concern, it was the next one. You see, when I add to a trade I then change the amount I am wagering per point so that if and when I decided to close the whole position, I can do so simply by clicking the button in the ticket box which is in the opposite direction. So if I am short, I change the amount to £1.00 and when I click Buy it automatically closes the whole thing because I have two trades open at £0.50 per point. But, I then need to change this amount back to my usual amount per trade before placing a new trade. However, on this occasion I didn't and so entered a trade at £1.00 per point. It took me a few seconds to realise and by the time I closed it, I had dropped 4 points. Not the end of the world in terms of capital, but it's the lack of focus which is concerning. I should've changed it back as soon as I closed the prior trades. But I didn't. I was still emotionally involved in the fact that the trades had both gone from winning, to losing, and so failed to notice the amount when the next signal was generated and the next trade executed.
A number of points were also left in the market as unrealised. Now I am okay with leaving points in the market, but, under the correct circumstances. For example, if I close a trade at the level my strategy dictates, and then it takes off without me, sure it stings a little, but I accept it because I followed my strategy and that's what's important. Not the result. But if I can see that the market appears very indecisive in its direction (candles with very long tails, as long as, if not longer than the body, lots of overlapping candles etc), then I need to be aware that in this environment, I should probably be employing a scalping strategy. Having a trade be 15 points in profit, moving my stop to breakeven and then it stopping me out, is not good trading. Sure, I lose nothing, and I gave the trade the best chance possible to develop with minimum risk, but I didn't adjust my strategy to the perceived conditions, and I've been trading long enough now to identify an indecisive market compared to a decisive one, and I have the skills to employ such an adjustment in real time.
So there you have it. Armed with this knowledge, let's see if I can break the age old issue that plagues us daily, in every aspect of our lives, and overcome the habit of hesitation, and commit to adjusting my strategy to the prevailing market conditions, and use the winds to steadily steer my ship back on course.
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