Sliding Doors is a movie starring Gwyneth Paltrow and John Hannah. It shows how her character Helen’s life took two dramatically different paths which all centred on her catching or missing a train.In a brief synopsis, when she catches the train, she arrives home after being fired from her job, and she finds her boyfriend in bed with his ex-girlfriend. She dumps him, meets another guy who encourages her to start her own company and they fall in love.
When she misses the train though, this sets into motion a series of events in which she arrives home after the ex-girlfriend has left and so spends her life miserable and doubting her boyfriend’s fidelity.
This storyline could be a metaphor for my trading this week.
I lost. Not a lot, thirty points is all, but it all happened on the last two days of the week. The sad thing is that on Friday it could’ve been turned around into profit, but the damage was done as I’d lost more that morning and so had become gun shy and missed a reliable set up which led to a second trade also being missed. After the Thursday session my confidence, which had been building during the week, took a hit which then put in motion a small wave of seemingly inconsequential events that bled into Friday’s session, and lead to me booking my overall loss on the week.
On reflection it wasn’t necessarily from bad trading or a lack of discipline, in fact quite the contrary, but from tiny little things that together, lead me to take different actions and make different decisions than had they not happened, and so resulted in a very different end to the week than I had anticipated.
It all began with one specific trade and my stop placement. When going back over my trades of the morning, something I have begun to do nightly when I get in from work, I noticed that instead of placing my stops where my strategy dictates, I had begun subconsciously placing them tighter so as to not give back as much profit from my previous trades, should it move against me.
On this one specific trade my stop should’ve been above the close of the prior bar, but I had placed it near the Marabuzo line (midway point of the bar). As the trade initially moved in my favour, I thought nothing of it, until it then turned back around. It slowly began to move against me, and I could feel my unease building. I realised then that my stop may be too tight, but I didn’t move it as this is what the 90% club would do. That’s why their losers are bigger than their winners and why they bleed away their accounts, and that is not a habit I wish to cultivate. Instead, I watched in increasing agony as it moved closer and closer to my stop. Then just as it appeared to run out of steam and look like it was headed back down, bink! It breached my stop by 0.55 of a point. I was out of the trade.
But this is not the painful part. The pain came when literally just after it stopped me out, it then moved back down. It moved past my entry point and onwards down and down it went. I know from how I trade at the moment, that I have a propensity to close trades too early and not let them breathe, which is something I’m working on, but I know that with this, the momentum it had as it moved down, I would’ve stayed in it a little longer and realised a healthy 20+ point profit.
So, no big deal. It’s just a losing trade and a part of trading, which is absolutely right. You cannot win each and every trade, and nor should you try. Accept the loss for what it is and move on. So, you look, and you wait, and when the next set up comes along, you get back on the horse and ride again. But this is where my trading day now mirrors the movie. You see, because I’d lost that trade and I had given back my prior profits, this changed my decision-making ability and I had now become a little gun shy. As such, I missed the clear signal to get into the next trade. And what a trade it could’ve been. If (and that’s a biggish ‘if’ as stated before with regards too letting a trade breathe), I had used my Marabuzo strategy to actually help me ‘stay’ in a trade longer, this had the potential to be a solid 40 pointer.
So now there are essentially two losses (one from the trade, which was taken, and one from the trade which was not) both of which are going around in my mind. So, I did what I said I do previously in another post, and I closed my eyes, took 3 deep breaths, and refocussed. Only now, the market looks different that it did two trades ago. Now I am second guessing myself and my analysis of what I can see. I end up taking another trade, but I find myself again on the wrong side of it and I take another loss. At this point I realise I am not trading well and my mindset is not right for trading, so I close the broker and my laptop, and sit and wonder, what just happened?
Had I executed that first trade with the correct stop (caught my train) I would’ve booked a win. This would’ve further bolstered my confidence and in all likelihood, I would not have missed the second trade. Then, as a result of having taken that second trade and being up quite considerably on the morning, the market would’ve looked different and last and final trade wouldn’t have even crossed my mind. Instead though, from that one seemingly innocent decision right at the beginning, it set into motion a series of events which lead to my morning turning out very, very differently. Although I find there is so much to focus on when you trade as a beginner, and it can seem overwhelming, it’s very easy to lose sight, as I did, of the most important area on which that focus should always be maintained.
YOUR decisions, and YOUR actions.
These are what will set a trader apart from the masses. They are what will lead in a large part to not only being profitable and successful, but disciplined in how you trade. Win or lose.
Always, always, follow the process no matter what has come before, and no matter what may come after. Never let an outcome influence a decision.
It can be the difference in catching your train, or missing it.
Comments