this week could've and should've been much better. In fact, it should've been around 80 points better but I got distracted and I also failed in the following of my strategy due to emotion. Let me explain.
On Monday it was Martin Luther King day in America and so the US markets were closed. The closing of these markets certainly has an effect on other markets around the world so you will likely see reduced volume and thus reduced volatility. This is certainly true of the two markets I trade, the DAX and the FTSE. However, I will still trade on days like this because the markets still move and there are points to be made. But (said with a heavy sigh), I allowed the opinion of another trader to influence my mentality and attitude towards the markets which resulted in missed opportunity. You see, I follow Tom Hougaards telegram channel. I don't take his trades but I do check up on his trading to see how he faired compared to myself on any given day. I understand we have very different strategies and so there will be days when he does substantially better than I, and believe it or not, vice versa. But the problem comes not from following his channel and comparing myself to him (a wise young lady once said 'Comparison is the thief of joy - I love that saying), but in the fact that for 20 or 25 minutes I 'listen' to him before I close Telegram and get ready to begin my trading day (I don't place a single trade before 08:35). It was in this checking in of his channel that I saw he was not trading that day as the DAX had been in a range on the last two MLK days in the previous two years, of only some 40 points and in his opinion it was not worth trading that day. This is where the problem started.
After I read that I suddenly though to myself, 'Maybe I shouldn't trade today?' 'Should I just sit this one out?' I decided I would watch the markets still because you never know. However, a trade was setting up in the DAX at around 08:40 and it was 0.5 of a point under my maximum stop size. I employ in both the DAX and FTSE, a maximum stop size in any given trade (30 points for DAX/ 20 points for FTSE) and will not take any trade which is above this, no matter how small that amount might be. So I looked at the trade which had a 29.5 point stop, and then my brain reminded of what TH had written. I looked at the market and thought 'If it stops me out would I Flip the Switch and if I did, would the volatility and volume be there to potentially mitigate any loss?'. I elected to not take it. Had I ignored all of this and simply traded my strategy, I could've made 34 points. But instead I made 8 on a FTSE trade. I had allowed someone else opinion to become my own.
The other costly error was in snap closing a FTSE trade when I closed a DAX trade without even stopping for a second to consider the action.
With my strategy, not only do I have entry criteria, I also have exit criteria which is judged on each subsequent candle, after I have entered a trade. I won't go into detail but it means that sometimes my strategy dictates I close the trade and I will end up leaving points in the market, which I am okay with, and other times, I will manually close it if the gap between the exit level on the prior closed candle, as defined by my strategy, is much too big when compared to the current price. For example, if there is a sudden spike in volatility (I don't use any indicators so have no idea of volumes) and the current candle takes off, I will not let 30+ points simply evaporate because my strategy dictates I exit at 'x' price on the prior candle. To me, allowing this to happen is not good trading. I have had trades come back and stop me out for breakeven, but not ones that were 30+ points in profit. I will simply move my stop into profit, and I will happily allow up to 15 points to be sacrificed before I close the trade manually. This happened on Wednesday when I had a DAX trade and simultaneous FTSE trade running. As the DAX took off it came down to prior lows and bounced a little. At the time it was 30+ points in profit. As it bounced and began to retrace, I decided to close (scalp). But in this moment I was not quite as composed as I would've like to have been, and immediately, out of instinct and not conscious thought, closed the open FTSE trade also. This was not good trading because I use the same exit strategy for both markets and the FTSE was no where near the level of profit the DAX was, and so the exit level on the prior candle was fine. But, it was too late and I had already closed it. This cost me another 23 points in the FTSE. In addition, had I sat through the discomfort in the DAX trade, that would've resulted in another 12 points, but I am not concerned about that as I fully accept I closed it where I considered was best in the moment. I will always leave points in the market and I honestly have no problem with that, but I do when it comes to not following my strategy and additionally, acting on emotion/ impulse instead of discipline and composure. So there you go. It was still a profitable week and lessons were learned, which is the important thing. Right after trading finished for me on Monday, I didn't leave TH's telegram group, but I did delete the app on both my phone and my desktop. All I do now is reinstall it every couple of days and check in with him, after I have finished trading that particular morning. Then simply, uninstall it again.
It lead me to coin a quote which I think is an original -
"You can let someone else's opinion help inform your own, but never let it become your own."
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