I am ending this week with +$900 in gains. This is just the 3rd full trading week this year where I made less than 4 figures for the week.
As I reflect on this week, the thing that bothers me about my lack of gains is that it’s not due to the lack of opportunities. Last week I made less than this week, but there were few opportunities for me within my niche. This week that was not the case. There were plenty of opportunities, but I simply did not trade them. (Now please note… I am grateful for the gains, I am simply trying to analyze why my performance has been sub-par)
There are manny examples this week of missed opportunities. CARA today, DRYS yesterday, KR dip buy opps almost every day this week, TOPS this morning, SNCR yesterday and multiple times today… and the list goes on. Now, every trader will miss plays, that is just the name of the game. The issue with these misses, however, is that I was watching them, I had a trading plan in place, I knew it was time to jump in according to my plan, but I simply did not take the trade. This is a problem! I could have easily made +5K this week had I taken the trades according to my plans.
I have racked my brain trying to figure out what the deal was this week and there are a few things that might have attributed to the problem. 1) I was on vacation Mon-Thr. This caused me to be somewhat distracted or less committed. I did not want to get into any trades that would last a long time since I wanted to go play with the family. 2) I think there was some second guessing myself on a few that kept me out. KR is a good example where I think this came into account. I am not as comfortable and familiar with long set-ups. This unfamiliarity caused some uncertainty or second guessing that kept me from taking the trades. 3) If I am completely honest with myself, I think I have an ever so subtle fear of taking a loss.
If I were to say which of the 3 issues I am most concerned about its #3. The fact is that I have a profitable and consistent strategy. That has been proven statistically. In order for that strategy to work properly, I need to trust that strategy and trade it “robotically.” If I let my emotions get in the way it will affect the profitability of that strategy. The potential loss on a trade that is planned out should not stop me from entering. I recall Mark Douglas in his book Trading in the Zone talking about this. I am letting a loss sting me more then it should. I am taking that loss personally as if being wrong on the trade somehow diminishes me as a trader. I’m simply letting those losses affect me and my trading. I am fearing the loss. It is ok to be wrong on a planned out trade as long as I stick to the plan and stop out. I need to stop letting it affect my self-worth. A loss should be neither here nor there, its just part of the game. A loss should be “water under the bridge” as long as I stuck to my plan and did not get stubborn.
I think a great part of this issue comes from the strong desire to be a successful trader and make this career work. I would guess that there are many other traders that feel this way too. We don’t want to loose so we fear losses. We want to preserve our limited capital so we fear losses. We want more than anything to make it as a trader so we fear losses!
With all that said, I need to trust the data. I know that I am profitable about 90% of the time. So, as long as I keep my losses under control they aren’t going to stop me from being successful. I, of course, need to learn from them! I just need to not let them define me.
This next week I am going to focus on not letting this fear of a loss prevent me from taking a properly planned out trade that fits within the parameters of my strategy. I am going to work on not letting a loss affect me emotionally. I feel excited about this discovery today and I am excited to try and work on it!
I’ve had the same problem recently. I took a few big losses, didn’t have many setups to bounce back quickly, and just sat there watching the few setups go by. I also attribute this to fear of losses, but in my situation, it’s more like trading the P&L instead of the chart.
I’m still in the thinking-small stage of being profitable everyday, instead of just trusting the numbers and process. I’ve lost money 3 out of the last 6 weeks which is a record low for me. And even though I’m green, those 3 weeks took an emotional toll on me overall.
And even though I finished this week +$2k, I feel a bit beaten. But I am proud that I sized down or took less trades after a beating, followed up by less opportunities. Taking it slow is the right thing to do vs. just pushing hard and making it worse. That kind of maturity will make this a successful career. And I think you’ve acted similarly and have reason to be excited.