Take the Stupid Trade!

As many of you know, I have been learning some new strategies for the past 3 months.  Doing so has been a rough road. It has almost felt like starting over.  It has killed my consistency and hurt my P&L, but I feel that it will be worth the effort.

I have sought out new strategies for a few reasons.  One being I wanted to eliminate the stubborn trading from last year that would wipe out months of work. I have struggled this year to find the right balance of stopping out appropriately and getting shaken out. I have had 0 large losses this year, but I have been stopping out way to frequently. Second, I wanted a more systematic approach to my trading instead of feel.  I wanted to add triggers to my tape and level II reading. I was sick of hearing general comments from guru’s that were supposed to somehow help my trading.  (ex: don’t add to a looser, don’t catch a falling knife… you know what I mean!)  You can drive yourself mad with all the rules of thumb you hear out there that don’t necessarily work when applied generally.  I was also sick of the convoluted, wishy-washy, hindsight trading help out there.  And not to mention the lack of transparency with most educators!  I wanted to learn some true systems that fit well into my style from some expert traders.  I wanted to understand the why behind the trades, the theory. I wanted to internalize the signals.

I think I found those systems I was looking for and I think I am finally getting a handle on the new strategies I have been learning, but there is one thing that has really been stopping me from reaping the benefits of what I have learned… that is simply taking the trades I see when they signal.

I have countless examples from the past few months where I saw the setup but chickened out of taking it.  At least one a day on average!  What usually ends up happening is I will see 4 or 5 setups work that I don’t take, and then I finally take the 6th one I see and that one stops out.  No Joke!  Time and time again.  I am sure this is normal as one gains confidence in the setups and signals.

This dose not mean the setups are bad, no setup works 100% of the time, it just means I am messing it up by not taking it every time I see it trigger.  By not taking the trades I am messing up the win rate of the setup.  This reminds me of the book Trading in the Zone that talks about this very issue.

This leads me to my trading goal for November.  The goal is simple.  TAKE THE TRADE!!!!!!!!!!  When I see the setup trigger I MUST take the trade.  I don’t care if it is with tinny size, I MUST take the trade, or at least try. Doing this will allow me to build confidence in my trading of the new setups and get better at the nuances of the trade.  I must build my confidence, and this is the way to do it, by getting my feet wet.

I have made a folder on my computer where I save all my charts.  That folder is titled, Chickened Out!  My desire is to have less than 5 charts in that folder by the end of the month. If I do, then I will feel that I succeeded. To land in that folder it has to be a trade I planned, was watching, it triggered the entry and simply chickened out of trading it.  Hindsight trades or charts I was not watching at the time of the setup do not count.

Let’s see how this goes.  I look forward to reporting back at the end of the month on how it went.  I am hopeful this is the key to me turning my P&L back around.