This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com
Next week I’m going to try something different to stop these blowup days I have. Generally, they happen about once per week. On the surface, it may seem that I trade poorly on those days. However, I have come to a different conclusion. When you are a piker like me, and make 20 round trip futures trades, you’re asking for trouble. Its surprising these days don’t happen more often considering the unbelievable number of trades I make.
There is only one criteria I will use to monitor my performance over the next month — the number of round trip trades I make. When I used to be a dummy, I only made one or two trades per day. In fact Zoomie recommended this awhile back. Although I knew he had a point, I disregarded it. My only focus was to be profitable at the end of the day. Who can keep track of Rs when jumping in and out of trades. I’m sure many traders are profitable with a fast paced style, but I see something different in myself. Multiple trades generally indicates that I’m unsure of direction, so I keep changing my mind (and position). That’s a sign not to trade.
Something else I used to do was skip the open. I knew I didn’t have the discipline or skill to trade it. Although I plan on starting later in the day, I will only grade myself on the quantity of trades. Each day when I report the results of the VC, I will give myself a grade based on this scale: (a) two trades or less = A, (b) more than two round trip trades = F. That may sound harsh, but I believe its the single most important factor in gaining consistency in my trading. Generally, once or twice a day, a trade will jump out at you. I need to quit pouncing on everything I see. Even if I miss the “best” opportunity of the day, I’m alright with that. Its not always easy to see it in the heat of battle. As long as I don’t chase every wiggle, I will be closer to where I want to be.
Btw, if you haven’t read the comments on this post, check it out. Random Trader made sense on sticking to your trading plan, but Tyro was able to put into words what I personally believe about the real challenge to trading (comment #7).
This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com
August 31st, 2007 at 8:31 pm
1-2 trades/day? Oh dear, you’re going to be like me. Everyone always tells me that they want to be like me, but it’s not all cocaine and pimpin. Most of it is sitting on the sidelines all day and making snippy remarks while trying to act happy for Phileo and all the money he rakes in. It’s the road to unhappiness, man.
So do you know which 1-2 trades you want to take? If you’re looking for something that slow, http://daytradeemini.com/blog/ has been a great source for me. I went through his entire blog archive and printed out every chart with a snippet of his commentary, put it into a (thick) binder and read through it once a week. He’s conservative, disciplined, clear and comfortably profitable. I haven’t bought any of his books but I think he’d make a good teacher.
Damnit, now look at what you made me do - pimpin again! Where’s my coke?
(Good luck BAT, I hope you find a pace & style that work for you.)
September 1st, 2007 at 8:25 am
i think the coke is the main reason for over trading…maybe i should smoke weed instead…i will check out MT’s site…thanks
September 1st, 2007 at 11:26 am
guys, it ain’t all a bed of roses here. Although I don’t talk about it too much, I still have the occasional overtrading day, which wipes out a good 3 days (or more) of hard work. It’s very frustrating to see how that it’s damaging not only my equity, but also my psyche. I have also been thinking about how to deal with my occasional bout of overtrading….