Trader’s email to his mentor

I thought a copy & paste an email I just wrote to my trading mentor, as it gives a good glance of what I am going through on my trading journey right now.  The more I look at these insights, the more I surprise myself at how amateur-ish my trading behavior is at times!!

Hi Paul,

Thanks for your email.  You asked me whether I would have completed my analysis of the stats by next Thursday.  There’s something I wanted to run by you.

Looking over the trades I have been doing in July and August, without going into minute detail, I can quickly spot that the BIGGEST problem/issue seems that I am still taking trades that are not valid setups – i.e. they don’t fit the parameters that I have set out for triggering a long or short position.

For example in August, I have taken 66 trades in 8 trading sessions thus far and have lost 11.5R.  Out of those 66 trades, at least 17 trades did not meet my specific setup criteria, yet I still took them.  This seems to indicate that my discipline is well below par!  Incidentally the net loss of those 17 trades was around 9.5R.

Would you agree that simply ensuring that I ONLY TAKE VALID SETUPS should therefore have a SIGNIFICANT impact on my trading results?  My thinking was that I don’t need to engage in further analysis in order to verify this – because it seems quite black & white.  Would you therefore agree that this insight alone is, for now, going to have the most potential for changing things?  Thus if I focus my energy on only taking valid setups, and then conduct further analysis once I have that sorted out.  For the eventual analysis I can look at both the valid trades that I have already taken plus all the ones going forward.  Do you agree?

That said, I am still keeping fairly detailed records of all my completed trades.  It will take some fine work to combine the trades from the two broker accounts (LMAX and FXCM) – most trades (other than DAX and SPX) I split 50/50 across the two accounts to enable me to compare the executions and final costs.

In terms of position management – I have been trying a few different things – here also I have realised that managing a position becomes somewhat difficult (and meaningless) if the position stems from an invalid setup to begin with. 

Thus, although my trading results are simply horrific, I am getting a lot of trades under my belt – and am learning a bunch of things along the way.  Although it does seem to anger me and get me down at times, I seem to just keep going, adapt and improve.

Have a nice weekend,


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