Seems like you answered this question in your very first post: "thing that has really slaughtered my equity is opening foolish positions and not getting out. I sometimes have put on these "lotto ticket" trades" Discipline is your problem and you know it. I suspect we all have discipline issues at some point or another, however, the more experience you have, the lesser these lapses will cost you. Here is a suggestion (excuse me for butting in BTW): define (write down in a journal or just make a mental note) your emotional state at all times during the day, especially after a losing trade. If you find yourself anxious or frustrated, make it a point to remember that things will usually get worse from that point forward and that its time to stop for a while. The more negative emotions you feel at any given time, the crappier your judgement and decision making will be. Mike
Thanks Mike - I like your suggestion of writing down my feelings/emotions (I try to keep a mental note now, but that is easy to forget or ignore). I suspect that I am not alone in experiencing two of the worst emotions: hope and total confidence. PS - I appreciate everyone's constructive criticism and ideas.
6/5/2007 +$132.86, 1 trade (1W) USDJPY: +46/102 A Closed one of the short USDJPY positions (from May 29th) that reached it's target. Don't really like dealing with the interest on being long JPY, but believe it is still worth it. Still short 3 USDJPY positions.
6/6/2007 +$796.34, 3 trades (3W) USDJPY: +127/114 A Closed the 3 remaining short USDJPY positions (from May 29th). They didn't reach targets, but I really didn't want to hold them any longer because I was getting uncomfortable. In <a href="http://www.elitetrader.com/vb/showthread.php?s=&threadid=87977&perpage=6&pagenumber=30" target="_blank">Neke's journal</a>, GGSAE gave some advice that struck a chord with me... "react, don't predict". Thinking back on many of the bad positions I have had, they were opened because I was predicting what direction the trend would go. I need to remember that my system is simply displaying what is happening at the moment. It is my responsibility to react in accordance with the system's rules; it is not my job to predict where the trend will be in the future.
Tell me if I'm wrong, but if you only try to break even, its almost like saying "i only want to do good enough to get by"..i'm not saying that you're lazy or anything, but why not aim for the stars, and if you fall short, no big deal. Trading is hard, but the more you try to make a profit, the more likely you are to get there. cm
I agree that it is good to aim for the stars. But under my circumstances (and knowing myself), I think it is reasonable to only expect to break-even this year because... 1. I've only been trading for 2 years. From what I've heard and read, it is the norm for a trader to take a good amount of time before becoming consistently profitable. 2. I started this year thinking I could kick some ass (with the help of a freshly capitalized account) and make up the losses from 2006 quite easily. As you can probably guess - I had a massive draw-down the first week of January! That really got me pissed, so I took some time off to think about the fine line between success and failure. Up to that point, I really hadn't developed a set of rules by which to guide my trades, I had just tried different techniques over extended periods. I have never got into using or buying other people's systems, but I realized that everything I had done up to that point were not characteristics of a successful trader and no amount of capital would make me successful - it had to come from inside myself. So it was then that I developed the first version of my system based on recurring patterns I have noticed over time. I took another hit in April only because I was not disciplined enough to follow the few simple rules of my system. So I started this journal in May as a way of getting me on the straight and narrow. Like any normal, breathing person I would like to consistently book 10% a day; but at this point in my trading career I just need to get my head on straight and get my equity curve growing smoothly upward.
6/7/2007 +$57.68, 2 trades (2W) EURUSD: +5.5/28 USDJPY: +6/13 A Started the morning nice and relaxed, following the rules. I missed a nice setup in EURUSD and started to get a bit bothered. Quit early because I didn't want to start putting on stupid trades.
6/8/2007 +$176.93, 6 trades (4W, 1L, 1S) EURUSD: +10/56 USDJPY: +19/62 C Nice movement today, and I started out fine but started fighting the USDJPY trend. When this happens my default reaction seems to be to add to the losing position. This is an extremely bad habit that I must fix - quit early today for this reason.