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"One important key to success is self-confidence." - Arthur Ashe
I lost the edge. I was a self-confident, consistent, successful trader. But at some point, months ago, I started to lose focus on my trading. Maybe it was burnout; too many hours of charts and playbacks. Maybe it was boredom; doing the same thing over and over. Maybe it was trying to trade like others; taking setups from another trader's plan. But slowly I started to wane from the path that is required to maintain top performance. With some overconfidence and arrogance, I executed trades against my plan; made decisions based on hunches and beliefs; blamed the market for losses. And little by little, I allowed the wheels to fall off so that I eventually became a reckless trader and put myself into a negative financial situation. I am no longer a self-confident trader, and with that I am not consistent and not successful.
This business requires peak performance any time you are facing the market. Peak performance includes (but not limited to) health, self-awareness, honesty and humility. I now realize that I have not been my best and have not given the market the required attention and focus. I know I have not been honest with myself. Going forward I need to recognize when a screw is loose on that wheel so that a fix can be made before it leads to disaster.
As a mentor once told me, discipline leads to consistency, and consistency leads to success. I need to go back and establish discipline before I can go forward.
My goal with this journal is to get back to basics and reacquire the necessary discipline to trade with self-confidence. Part of that discipline will be to journal each day. In this journal I plan to share and explain the trades taken; recognize and discuss changes that may impact my performance, such as distractions; reiterate and reinforce the valuable lessons I have learned through readings, discussions and experience. Most importantly this journal is about accountability to myself and establishing a pattern for success.
well, i agree with that. if a person want to be a successful he must discipline his self, on what he will be doing and what would not be doing. Maybe that is the reason why 90% of the new trader failed with this business because they take it as a boring business after a month and because not earning the expected profit. Taking the same routine everyday, watched the stock,currencies,etc. Well, actually it is really boring. but if you motivate yourself, it you will see that it not just the money. and someday we will be a successful with the help of ourselves.
I have to disagree with this one part in your intro. I consistently put badly, and it has NOT lead me to success on the golf course. Of course... maybe if I were more disciplined in my bad putting.... I never thought of that.
Good luck coming back. I look forward to the journal
Like a mirror you described me well! The only exception is that I never made it to the point of saying I was a successful trader. Mediocre at best.
Today was an emotional disaster for me. I did everything wrong - a strange zone - that's when I want of find a new system, redo my indicators, go abck to square one , reinvent the wheel. I have never journaled abut my trading blunders (although I have promsied to do so many times!) and rigt now I so embarrassed about my trading today it is hard to write about it.
So thnak you for your openness about your experience - it encouraged me to re-believe in myself.
Ok, well, so, today was strange. First day of the month and I was not around the charts due to a small emergency. Nothing special, it just took me away from starting to establish a routine. So tomorrow I begin anew.
Setup Obective: Buy weakness or pullback in an uptrend; sell strength or pullback in a downtrend.
The premise of the setup is not unique. There many threads that define the same setup. In fact I believe most (many) traders look for the "pullback" but search for it using different tools (and use different entry techniques).
For me the tools are moving averages and stochastics. I am a stochastic geek (I said it, it's out there, I use indicators). Using multiple timeframes and a set of stochastics aid in identifying the "weakness" or "strength" where a trade opportunity might present itself. As I post charts throughout the journal it will become clear how the stochastics interact.
This is what I use:
Chart Package: Ensign software
Datafeed: Interactive Brokers
Indicators on chart:
1) 33ema
2) 13 period Gaussian moving average (similar to a 5sma)
3) keltner, 33ema 2.3/3/3.7
For the most part I will be posting CL charts. I have four "active charts" that I follow: 3R, 6R, 9R, 18R; and two "support charts": 5M and 10M. The support charts provide me with support and resistance areas. The active charts are typically paired, 3R & 9R and 6R & 18R; meaning I watch two at a time.
For me to take a trade, the higher timeframe must support the momentum trend.
Examples The first chart shows what my chart looks like with the indicators labeled.
The second chart (from 2/11/2011) is an example of the setup, labeled "E", where I took a long. The actual trade was off the 3R chart with supporting trend momentum from the 6R chart. (Yes, I know it's not the 9R)
3R: price moved to keltner, retreated to rising 33ema; stochastic momentum long on 21,42,63 stochastics
6R: price broke up through a bull channel; price above 33ema
In theory it's quite simple. Live trading, well that's another story....
I find the markets fascinating so when I see you use the word boring, it suggests to me that you may not have a passion for it. As well as discipline it's likely that you would need to be passionate about it in order to succeed. You could of course develop a passion for an aspect of it.
"The primary thing required to obtain what you want from life, is simply the will to pursue it, and the faith to believe it is possible." - Author Unknown
"The ability to maintain discipline and stick to the rules is the hallmark of the experienced successful trader" - Curtis Faith
Most traders describe trading as boring. If you are getting all worked up and super excited, you are probably gambling more than trading. That is not to say it can't be fun or rewarding, but I don't think it is particularly "exciting".
For those that really need some excitement in their life, some thrill, best advice is to make sure you get plenty of it externally so you don't go looking for it in your trading. Go skydiving, go surfing, whatever floats your boat, find your excitement and exhilaration outside of trading so that when you are trading you are focused and calm.
One of the areas that I am really working on is eliminating distractions. My focus needs to be on the charts whenever I am sitting at my trading desk. I have to admit I can easily wander, especially when the market goes range bound. To remove temptation and as part of my trade plan, I will be at my trade desk no later than 8:00AM. But before that I will take care of any paperwork or miscellaneous tasks that need my attention for the day. Too many times during the trade day I have started to do non-trade related stuff only to see that I missed a trade. The worst is not so much that I missed a trade but that I impulsively jump into the market only to be quickly stopped out. Followed by a series of negative events that I plan to eliminate. This is one of those big "screws" that I need to repair. Taking these risk trades - ones outside the plan - have played a large part in my diminished confidence.
From 8:00AM until market open I complete the following tasks:
1) Review any significant reports for the day and set my computer alarm to remind me 10 minutes prior
2) Data update for all my charts. I do not leave my computers on 24hours. I perform a refresh each morning.
4) Check the over night markets for signficant movement. I am just looking for a general sense of a larger trend.
5) Start the new page in my hand written journal. My hand journal includes quick notes of anything I deem significant in the market or with myself. Looking back through the days I see several comments in cap letters: NO COUNTER TREND, FOCUS, STAY OUT OF CHOP, AGAINST THE TREND, WHY?, PROTECT CAPITAL, CONFIDENCE.
I don't review my journal enough.
6) Something that I just started doing is reviewing my trade plan every morning. AH HA! Believe it or not I had a trade plan, but I really didn't keep it close to me. I "knew" what it was, but I did not keep up with it. So now I plan to review the "classic" setup and reiterate the requirements to take the trade. Damn it, it's my game plan it should be with me at all times! Heck, NFL head coaches march up and down the sideline with game plan in hand, and now so will I.
7) Another new feature of my morning routine is that I have turned off my phone. It goes right to voicemail. If you're calling I don't care; probably don't want to talk to you anyway, so why answer? LOL (Well my immediate family has a separate access line; I'm not that cold).
