The Importance of Following You Rules

I told myself the other day that I was done taking big losers. It's been a problem that has plagued me for years. I had one goal, and that was to get out of my losers quickly. I managed to follow my goal well, and even though I had another losing day (which happens in trading) I consider it a success. The good thing from the day is, I was able to identify something else to work on. I took a look at all my trades for the day, and the one good trade I had (one of the few winners) was when I sold oil because I waited for a retracement in oil, ho and rbob. I had many reasons to sell it, and I was patient with my execution.

After that I trade, even though I was long ERY (a triple short oil etf) I kept buying oil at points I felt were acceptable. I had some reasons for most of my trades, but as I watched 20 tick winners quickly disappear, I became agitated. I kept buying the whole way down, and after 15 - 20 losing trades, I had taken enough small losers to finish down at an amount I was comfortable with. While I faded the big move in oil, and even faded myself (long ERY) I can come in the next day and work on my patience and avoid fading the trend.

I can work on identifying ancillary markets and finding multiple reasons to trade. I am going to work on a guideline sheet to follow every day. I hope by following this, it will slow me down, help me stay out of the market when there are not great trading opportunities, and provide a sort of outline to my thoughts. This should make it easier to develop more of the good and watch out for the bad.

I must also remember, this is a race, not a sprint. I need to learn more from mistakes, take decisive action, and move forward and improve. This is a test and the low point of my career thus far, but after reading and re-reading Market Wizards, many great traders had numerous set backs . . . and they survived their blow ups and defeats to see brighter days.