As I write this I have many feelings concerning this week, well the one day in particular, but the feeling that is prominent over all others is disappointment. Not in the outcome, but in myself. You see I did a number of things I said to myself I would never do (again) and each one served only to compounded the misery of the previous one. However, I cannot start a new week feeling like this so I must address the feeling, work through it, accept it, and move on, and that is exactly why I am writing about it in this blog, so I can use it as a form of therapy, or catharsis if you will.
Let's start at the very beginning.
I sat down Monday morning with one intention for my trading. To stay in a trade longer than just a quick scalp. You see when I started trading I would get gun shy real quick. As soon as I saw that I had 6 or 7 points in profit, like a true noob I wanted to close that trade as soon as I could and lock those points in. Now this is fine in a range bound market where scalping is the strategy that makes most sense, but not when there is a strong trend being displayed in one direction or another. The problem is this has now become a habit and one I don't want to keep reinforcing, day after day. So I was sit poised and ready to hold my trades no matter what. Well, initially it went well in as much I achieved what I set out to do. In fact, I was in one particular trade for over 30 minutes! But, as fate would have it, they turned out in the end to being losing trades as the market turned back around and stopped me out. I ended up reverting to scalping my way out of trouble to essentially get back to even on the day, give or take a couple of points. No harm done and some valuable experience gained.
As it so happened this was in fact how the beginning of the week went and come Thursday morning I was up around 17 points for the week. Not stellar I know, but it was adding to me being a consistent winner, which is essentially what we are all after as trades, because that, is how you gain entry to the 5% club.
On Thursday I had a dental appointment and couldn't trade as long as I had been at the beginning of the week, but much more importantly than that, at 13:30 GMT there was a CPI release which unfortunately I wouldn't be able to trade as I'd be in London. Oh well, I'd missed them before and I was up on the week so all was not lost. In the afternoon before my appointment I found myself in London looking to find somewhere to eat before heading off to the dentist. I found a nice pub, which I had been to on a previous occasion and sat myself down in a small booth after having ordered a beer and some food. It was then that I realised it was nearly 14:00 so I thought I'd just 'check' the market (DAX) and see what effect the CPI release had, had. Bugger me! In one 5 minute candle, at exactly 13:30, the DAX had dropped just over 280 points! Holy sh*tballs batman! I then checked in with the Telegram channel of Tom Hoougard whom I follow (amazing trader and teacher - look him up on Youtube or on line - TraderTom.com) to see how he had done. I noticed he had posted some graphs from his research, as he usually does, detailing what had happened to the markets on previous CPI release dates. One of these graphs showed that the market dropped in a similar fashion, but then continued down some 800 points in total!
Now the astute among you are probably nodding your heads because you can clearly see where this is going...well your wrong!
No you're not, I'm joking. Of course this is where it all went wrong.
Mistake number one
As soon as I saw 'that' candle the FOMO flooded my thoughts. I'd missed a move and what a move! I knew it! Now when I am at home in the mornings on the desktop and I miss a move, I may drop down in time frame to see if I can catch an entry for a scalp, but generally I accept that I missed it, there will be plenty of others, and so I let it go. But, none of those moves are of the magnitude of this one. The emotions I usually feel were magnified significantly and I found myself looking at the chart for an entry.
Mistaker number two
I had said to myself a long time ago when I first started trading, the one thing I will not do again is trade on my phone. Trading is a profession, and as such any trading should be conducted professionally. This I feel is especially true if you intend to trade full time further down the road. You need to establish good habits and treat it respectfully right from the start. So for me, trading on a mobile is not professional. It's something for the TikTokTubers. Sitting in their Lambo (rented for the day) wearing their Versace (knock off) flashing their 'Roley' (eBay special) trying to flex for the gram and sell an overpriced course.
Professional, successful trading is in my opinion not glamorous at all, but actually quite boring and mundane. But there I was, phone on the table, ticket open, placing my stop and executing a trade.
Mistake number three
I had allowed the FOMO to cloud my judgement and not only that, but it had whipped my mind into a frenzy of what was yet to come. After all I'd seen a graph that showed the market had previously dropped another 800 points and in front of me now, I could see the first pullback and what could be an equally crazy move down. I'd missed the initial sell off sure, but now I was in prime position to catch the second move. Not only had I allowed the FOMO and my emotions to control me, I had gotten sucked in by information that I myself had not researched and confirmed. This is comparable to the stories you hear when a stock is soaring, it's all over the news and suddenly people who never trade start taking investment advice from literally anyone, their colleagues, their hairdresser, the milkman to name but a few!
So I placed the trade, confidently watching as it started to edge lower. Happy days. In the words of Rod Tidwell 'Show me the money!' And it was doing just that, until it snapped back on me. The market was far more volatile than I had anticipated and just like that, I was stopped out for minus 30 points! Okay so it's volatile, it doesn't matter. It WILL go down again, this is just a bigger pullback than I thought. I waited and I bought in again, only this time with a slightly tighter stop loss (why?) Boom. Stopped out again. F**k what was I doing! I immediately closed the broker, closed my phone, and sat there dumbstruck. 'What a tosser' I thought to myself. 'Why had I let that happen?' I had no answer. When I looked at the first trade I literally sold right on a double bottom. I hadn't even noticed until I placed it and by then it had moved considerably against me straight away. The second trade? Worse than the first because in my surety of it flying back down and those '800 big ones coming my way', I'd sold again at the same level give or take a point, so this made it a treble bottom and with an even tighter stop! Of course the market obliged and it climbed back up. In fact in the end, it regained all of those initial 280 points, and went on to claim new highs on the day (some 390+ points from the treble bottom). Only I didn't see this until I got home that night as I was so disappointed in myself and reeling from the fact I'd turned a winning week into a big loser, I missed it.
So there you go. Three things that were things I thought I had removed completely from my trading and were not something to concern myself with, but it would appear there is still a lot of work to do as they are there lurking in the shadows of my trading, ready to pounce when my emotions get the better of me.
But I don't despair. This cloud, like the proverb, had a silver lining.
Not only had it made me realise that these are things that still lurk within my trading psyche and so I need to be mindful of that when trading, but it made me look back at my trading not only for that day (it was obvious where I went wrong) but for the weeks leading up to this in greater detail. In doing so I realised that I had actually been over trading, and considerably so. In fact my one edge I consider I have as a noob, my patience, my ability to wait and follow my strategy had been forsaken. I had taken way more trades than I normally would, every day, and not just this week, but the week previously. I simply hadn't noticed it as I had been blinded by the need to get back to at least even on the day. My focus had shifted from that of the process, to the results. And as we all know, if you stick to the process, the results will take care of themselves.
I think because I had begun to record a profit week on week, even though they were tiny, I'd misplaced my confidence and thought of myself as no longer a noob and so not prone to making noob mistakes.
But in trading as it is in everything, every day's a school day and there's always new things to learn.
So I guess with that thought in mind, I'll always be a noob...
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