This journal is to continue what I started in the middle of 2013 â working on psychological issues that prevent me from being consistently profitable. I had to stop the journal and trading last year due to a series of unpleasant events in my life that have now been resolved. I am re-posting the first entry from the previous journal as, I believe, I will have to face and deal with all the shortcomings as I start trading small live account. The advice that I received in replies to a previous journal was extremely helpful, this is why I am looking forward to writing the journal again.
Wow : talk about self-honesty . I do not know if you have heard about vipassana, www.dhamma.org this will certainly help you with some of the issues you mentionned. Also, you will certainly benefit from taking up clinical psychiatrists sessions : if you can afford take 3 different one ( one session a week each), so as to compare and make the most of each one.
I will start trading tomorrow with a small account that is currently valued at ~$17K. This is what I am comfortable risking, considering the things I have to work on. Meanwhile, below are highlights of what I will be doing. Trading Method: Even though this journal is not about building or improving a trading method, I think it is be helpful to give a brief outline of what and how I trade. - Instruments â futures only, I am free to choose from ES, NQ, CL or NG, based on which instruments offers the best setup. - Timeframe â I tend to hold positions from hours to days. - Methodology â discretionary, trend following with entries as close to the turning points as possible Psychology: The reason I found keeping the journal useful last year, is that it is easier for other people to see oneâs personality flaws. One of the suggestions was that I have addictive personality, and the root cause of my trading problems was addiction to random rewards that undisciplined trading provides. The more I thought about it, the more I realized that it was one of the problems that I was facing. Since I will not be able to change who I am; the question is - I can turn my personality trait from negative to positive. Can I get obsessed with trading profits, good execution, following rules, with beating the market and accumulating trading profits? Why I trade: I keep asking myself a question why I trade, since the emotional roller-coaster keeps taking me to hell and back. I donât need to trade. I have a good job that provides for the family, and a skill set that will most likely keep me employed under normal market conditions. I think there are three reasons: I love the markets; I want to achieve higher wealth levels than mere savings from salary can provide; and I am competitive and like to win.
I like the blunt/brutal honesty.....and if this is the problem ("the root cause of my trading problems was addiction to random rewards that undisciplined trading provides.") then no amount of tweaking a system a plan or a method will fix it. Even automation will not fix it......as you will always want to meddle. You need to change the reward for action, or inaction. Maybe as a suggestion read this book as a starter.... https://docs.google.com/file/d/0ByXsRacEHnd5NGlTVXVfWE1xMjQ/edit?pli=1 or its summary.... http://therightmind.com.au/FileUpload/files/ThePoweroOfHabit-fin060712.pdf See if it strikes a chord with you. Get yourself a 'swear jar' - every time you trade according to plan, you put a smiley face on something (go out and play with the kids/get an ice cream/play X box), everytime you trade in the undisciplined manner, you put $100 toward something you hate (wifes shoe collection/ a charity you despise/help someone mow their lawn) You need to retrain the habits.
Weekly Update Trading demons appear to be back; in fact, there is one more issue that I need to work on. The plan was to start trading in the middle of the week, but I froze ... on every setup. I was looking at perfectly good setups, and was mentally finding reasons not to trade. Then I was agonizing when trades that I did not take worked out like a charm. This never happened before. Not a good start. The balance is the same - ~ $17K.
Today's Trades I started trading today. Tipped my toe in the market with one CL trade right off the open for a small profit. Then kept shorting NQs into the rising market in an attempt to enter a multi-day trade based on a set up off the daily charts. Trade is approximately break even in after-hours trading and is still open. Psychology - I missed several good intra-day set ups in CL. I had a subconscious view that oil should go down, and could not force myself to enter long trades. I am not actually sure where the view comes from, may be from looking at daily charts and assuming that the sharp rise from ~ 92 must reverse / correct. It looks like the old habit of going against the trend is back. This time I did not actually go against the trend, but ignored the valid signals with the trend. Screenshot of trades is below:
my friend TIRAS. thousands of traders are suffering and have suffered from the same ailments you are describing, it is a natural process and its part of the journey of learning how to trade profitably. you being honest about it is a first huge step. now how long you want to linger or get stuck here is completely up to you. would you like to change? well do it! don't take comfort in your bad habits, don't make excuses you are such and such, take RESPONSIBILITY for your thoughts and actions, they are not controlled by anything else other than by you. start taking responsibility for them, of course, it can't be done overnight but has to be done every day, like anything else its just practice, practice, practice. ask yourself how important is becoming a successful trader to you and then start doing the hard work. now, you really didn't think this trading profession was going to be easy, did you? i walked down the same path you did and still get stuck, and fall off once in a while but if you keep your FOCUS on the journey and what needs to be done then it will get easier. This is the HOLY GRAIL: its about accepting the UNCERTAINTY of the market, and becoming completely comfortable with it. its about having complete UNATTACHMENT to your results no matter if you win or lose. its about having PATIENCE to wait for the perfect setup and then taking that HIGH PROBABILITY TRADE because you know the odds are in your favor. its about trading SMALL in the beginning and scaling up as you can handle it psychologically because trading is not about trying to become rich overnight. its about treating TRADING with respect and doing all the work as you would respect any other high paying corporate desk job you would have. in conclusion, you are completely responsible for your trading, the sooner you acknowledge this to yourself and start working very very hard to trade the right way the quicker you will be happy in all facets of your life.
your first post was all about I,ME,MYSELF...preoccupation with that as opposed to a wall between that and your trading,not trying to but doing, shut you off you have all your problems conviently tied to your success/failure in trading,gives you an out plus keeps the emotions in charge every trader has to learn that he doesn't matter,to do this you have to take charge of the ego and learn to control,shut down the emotions at will, not when the ego feels like it....most ignore this fact.... you can start by proofreading your posts and taking out all the i,me ,my,mine out of them before submitting,this is a simple excercise to begin to train the ego to shut off