Look at what you could've won." For those of you who are younger than myself and also didn't grow up watching UK television game shows, there was a famous show on a Saturday afternoon called Bullseye. It centred around the game of darts where contestants in teams of two consisting of one darts player and one non darts player, played against each other for prizes and a shot at the final big prize. Initially the dart player would throw three darts and which ever one got the highest score, the other person in their team would answer a question. If correct, they received £1 per point and the team with the highest score went through to the Prize Round. Here they would each throw, and any prizes they won they could choose to gamble those, and the previous money won, in the final where they each had three darts and had to score a total of 101 or more to win 'Bully's Mystery Star Prize'. It's not the game that I am alluding to, but the host's catchphrase should they have lost. You see, at the end when they failed to score that 101 or more and lost everything, in a last twist of the knife they were shown the grand prize along with the host uttering the immortal line 'Look at what you could've won.'
Trading can be very similar if you're not careful. You either hesitate and miss your entry, only to then watch the market race off without you, or you get cold feet, close a trade too soon, and the exact same thing happens again. Now you get to sit there looking forlornly at the chart and watch, as the market moves further and further in your theoretical favour and you lament on all those unrealised points, all that 'lost' profit. You're just like those poor contestants, left looking at what you could've won. But therein lies the problem. Your focus is now on what you could've had instead of what you still can have. Now I'm not going to sit here and say that this is something I'm not guilty of or don't do, far from it. In fact it is the reason I am writing this post because I realised this week that it's problem that I need to address and resolve.
One of the biggest issues we have as human beings today is that everything around us is in competition for our attention, and as a result we are very rarely, if ever, truly just 'present, in the moment.' It's the same when we are sitting and watching the market move without us. We may feel like we are focussed still as we are watching the charts, seeing the information they are giving us but the difference now is that we are no longer acting on it. In fact it's as if we're in a trance. We just sit motionless looking at what we could've had and any new signals the market may be providing don't seem to register. Only this week I watched as I closed a DAX trade and then simultaneously closed my FTSE trade at the same time, only to watch it then storm off in my direction without me on board. Instead of dropping down in time frame (I almost exclusively trade on the 5 minute chart) to the one minute chart to look for a possible re-entry point, I simply sat and watched it, dreaming of what could've been if only I'd held firm. This 'trance' however, lead to me missing new information in the form of another signal in the DAX which could've provided me with a solid additional 40 points which was way more than I could've had in my FTSE trade had I still be in! Only then did it suddenly dawn on me 'Hang on a fucking minute!'. I realised that I've done this so many times in the past 11 months, actually, no, that's not quite true, I've ALWAYS done it and this then lead me to wonder just how many points I've missed as a result of this daydreaming about what I could've had? In all actuality I honestly don't want to know as I feel it will probably be quite a depressing amount.
So now I'm aware of this, what can I do about it?
I think the answer is actually quite simple. Before I place a single trade in the morning, literally as I am waiting for the 08:35 candle to complete (I don't trade before this candle has formed which I will explain another day when I detail my strategy), I have no predisposition of being Bullish or Bearish that day, although I am aware of overall and intraday trends, I basically trade the information the market gives me as and when it makes it available in which ever direction that might be. So I will sit and speak out aloud to myself my 'rules and principles' for trading to remind me of what I expect of myself in all situations. For example, 'Always be ready to flip the switch.' This is taken from the great Tom Hougaard and his teaching of having a flexible mindset when trading. It means if you've entered a trade in one direction and the market moves against you and looks as though it may have potential for considerable momentum in this opposite direction, close your current trade, take the loss, and enter a new trade in the direction the market is going. Sound's easy, but you try it. Another would be to make sure I use the technique I have for staying in a trade and not closing it based on a decision born of emotion.
So you get the gist. In fact that last one is a great one because I will actively talk to myself out loud when I am in a trade, and remind myself as it moves in my favour that - 'I am not closing this trade unless signalled to do so. I have sat through the discomfort of having it move against me initially and so far resisted the emotional temptation of wanting to close it to 'lock' in profit and relieve the discomfort, so I will wait and see what the market gives me. In fact, instead of closing it, I am looking for a place where I can ADD to it. This is trading.'
Now as I sit and wait to patiently place my first trade, I have added to my rules and principles which I speak to myself aloud, the following phrase -
'Once a trade is closed, it's closed. That's it. It's done. Move on. Whatever happened, happened and cannot be changed. Always be present and in the moment. Always.'
That's it. Nothing convoluted or complicated, just simply reminding myself every day to be present. If you repeat something over and over again as the saying goes 'Practice doesn't make prefect, practice makes permanent.' So, in reminding myself every day to be present, eventually it will become second nature. It will be absorbed into my subconscious and will become a default state from which I operate. This new state will not only then add strength to my discipline but also add strength to my ability to follow my process, and that's what should be the focus and the one true goal when it comes to trading. Not making money. Money is just a by-product of good trading, and good trading is nothing more than being able to follow a process time and time again, over and over, without emotion, without concern, and certainly with no consideration for the "what you could've won's."
Thanks Jim.
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