Followed My Rules

Today was a much better day for me. I have come up with a new guideline to help me in my trading. This is something I created, and I use it to slow me down. It helps me prepare myself properly for the day's trading - fundamentally and technically. It is rather tedious, but I find that when I slow down, and force myself to look at many different trading factors, I can analyze them all and figure out what will make a trade a success or a suckers bet.

Anyways, I came in this morning and caught a lucky break with a trade in the British Pound. I never trade the product, so I was thrilled when I was able to make a little on tiny size. From this trade (which was the first time all week I had started the day off on a positive note) it helped reinforce my belief that I must follow my guideline. From there, I did my readings and looked at my charts, and sat patiently. It wasn't long before I found a nice 30 tick winner in oil. I entered the trade because I had multiple reasons. I made a few more trades in oil and the euro, and then found a decent 2 handle winner in the ES. This winner was solely because I was looking at many different markets and was able to see a false breakout while my ancillary markets showed something different. Again, I attribute this to slowing down my trades and looking at the bigger picture. This is something my trading guideline helped me with.

After reviewing my trades, there were two things that really stood out for me. The first was that I had reasons for almost every trade. This made it so easy to take a loser, and a quick loser. I noticed that when I had my reasons, and they didn't work, it was time to exit the trade. Conversely, I made a few impulse trades (its part of my trading personality) and I had no idea where or when my exits were. This was the second thing that stood out for me. These impulses were my largest losers for the day. It was amazing to look back, and see that when I had good reasons I took small losers and let my winners run. And it was even more amazing to see that when I made impulse trades without thought, I had tiny winners and big losers. It is hard to fight the impulse, especially when I miss a big move and I feel I need to fade it because it has become over-extended. Fighting the impulse has become a goal of mine, and I am sure with time, I can fight the urge enough, so it wont take me out of my day.

For me, the hardest part is sticking with my rules. Typically, when I have a good day or decent run, I become lazy and lackadaisical, and it leads to a very bad trading stretch. I need to forget about today, and continue to work on following my rules. From all my reading and research, I have found that if someone can do something for 60 days, it will almost always become a habit instead of a chore. Its like going to the gym, the hardest part is starting to go, but after some time, it becomes a habit and a part of your personality. I am hoping that I can take from my readings and translate it into trading success.