So I know in life it is inevitable that there are 'worsts'. The worst day of your life. The worst round of golf you ever shot. The worst illness you ever had and this week was a worst for me. The worst week of trading I have ever had. Not only in terms of points lost, but also the worst (lowest) my account balance has been since I started. The worst my strategy has performed. But hang-on because if I look at it from a different perspective, it wasn't actually a complete week of worsts. It wasn't the worst I have acted or felt after a loss. It wasn't the worst (read: least disciplined) trading I have ever done. In fact it has made me realise a few things which I believe will improve my trading.
For example, I know that my strategy is susceptible to fake outs and this also means it is susceptible to volatility and so doesn't perform to well when markets are choppy. I get whipsawed (Al Brooks) into and out of trades. But, I had never really addressed this, until now. It was simply something I accepted as no strategy is 100% successful. But it brought back to me something I learned very early on but had forgotten.
A truly great trader must be versatile and flexible.
Yes, you need to have a default strategy and you need to adhere to it 100%, but you also need to realise when that particular strategy is not performing in the current market, and so you need to use an alternate strategy. The problem I have (had) is that I was so blinkered and tunnel visioned in the application of my strategy and that I must always use it, no matter what, I lost sight of what I am trying to become and that is a Great Trader. I felt I was letting myself down if I didn't stick to it because of my past failures when I didn't apply it 100%. However, what I failed to realise it that in that past I was a different person. A different trader. I lacked the mindset, knowledge, and experience I now possess and so, it's okay if I don't trade my defualt strategy, so long as I trade another one and adhere to its rules 100%. For example in the DAX it is prone, in times of volatility, to have a big 30+ point candle move in one direction, only to close, and the following candle almost immediately retraces back in the opposite direction the same amount, if not more. So this means I can implement my scalping strategy if I see this happening, but I wasn't doing that. I was bound by imaginary shackles that only allowed me to trade my one default strategy, come what may. This is not good trading. You don't need a 100 different strategies because trading is hard enough, and, the best things in life are usually the simplest. But you do need a strategy for a trending market and also a strategy for a rangebound market. I have these, but stopped using one in favour of another, even when it was clear it wasn't suited to the market that particular day.
So you see, although this was my worst week, once the smoke and dust had settled, it made me step back and look at my trading introspectively which in turn opened my eyes and revealed the previously mentioned new perspective.
So although I am still sad about this week, I am looking forward to next week and the freedom that has come from this worst week.
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