I've had a rough couple of weeks, let's be real. This week I dropped over 100 points, 101 to be precise. My strategy also returned a loss, the first one since I've been tracking my Actual and Could've trades on a daily basis, since March 24th. The first losing week out of 21. That's not a bad hit rate. Add to that it was only minus 13 points and it would appear it works quite well. What doesn't work well is my application of it.
Since March I could've, had I followed it religiously and mechanically without any emotion, banked just over 2000 points, but instead, my account balance is below that which it was in March. So as you can see, there is something fundamentally wrong here. At the moment I am trading at £0.50 per point. If I had followed my strategy I could've been trading at £4 per point. That's a pretty f**king big difference! So why is there such a huge difference in my results? It can only be one thing. Me. In particular my emotion. I think I am trading well but realistically I'm not and it wasn't until this last week where I dropped all those points that I decided to stop and really stand back and have a look at my trading history so far. If I am ever to realise my dream of being a full time trader working for myself on my own terms, then something needs to change rather drastically. I need to change rather drastically.
On the flip side, I have noticed that I am much better at a couple of things I previously struggled with. Staying in a trade for one. This is for me personally the hardest part of trading. I can take a loss no problem. I will close a trade for a loss rather that let it stop me out. That's fine. But when I am in a trade and it starts to pull back on me, that's tough. I want to realise the profit and close it, and when I do, of course it then surges and I then rue leaving so many points in the market. However, this statement itself is not the correct way of thinking. This shows a recency bias which is not conducive to trading, let alone good trading. I have an exit strategy built into my overall strategy, but I do hate to see unrealised profits disappear. In fact, I actually consider it bad trading to let a 30/40/50 point winner turn into a break even trade. If you have a good strategy and you close it early, you must be able to find another entry further along, or in a lower timeframe, after all, the market is in a constant state of flux and so constantly produces new signals.
I am 'Flipping the Switch' (credit to Tom Hougaard) regularly now when a trade moves against me, and it is working out quite well. I do however see this move as more of a scalp then a stay in the trade type of trade because for me the idea is that you are accepting you were wrong, cutting your losses, and then using the information you now have to mitigate those losses, not necessarily return a profit, but again that in itself comes back to the ability to stay in a trade I guess.
Anyway, this is going to be a weekend of deep internal reflection and contemplation, as I accept and acknowledge that things need to change...I...need to change.
And change I will.
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