Two trades on Cable – both long. I came out of the first one because I felt quite uncomfortable shortly after entering the trade. Price ended up going sideways for the next 4 hours before finally rallying. However I caught the rally with my 2nd trade, with T1 being hit in 7 minutes. Both of these trades were with risk of £100.
Today’s other trade was on Oil, with a £50 risk. That one worked out very nicely.
Key Issues: Gym Workout breaks mental frustration and allows for fresh start, The ‘Incompetent Trader’ – the 3rd trading personality, Volatility-triggers can be threats, allowing pressure to trigger inappropriate action
There is a lot of stuff to discuss (again). After arriving at the office around 7.30pm I was starting to wear by the time I reached the 5-hour mark. Around noon there had been some comments from the EU regarding the Greek debt situation – this triggered volatility in the currency markets and in the European indices – and this unsettled me. After my head was thumping and I was getting clueless, I decided this would be a great time for the gym – I took out my frustration on the rowing machine, the treadmill and numerous dumbbells. By the time I came back to the office, armed with a jacket potato and a double espresso, I felt fresh, alert, and ready to go. As the psychology book advises, the charts do in fact look different after one does himself over. I proceeded to trade well in Cable and Oil.
- For each completed trade, who was in control? Was it the proficient trader inside me? Or was it the destructive George? What picture or image is evolving for both of these traders?
- How much of the trading session was spent “trading well”, and how much of the trading session was spent “trading badly”?
- How could I have increased the amount of impact that the proficient trader inside of me, had on the trading session?
- List and describe specific examples of good and bad trading from the day’s session.
- Why did I do the “bad trading”? What, such as specific events, or patterns of thought, caused it?
- What other observations, in the context of Chapter1, can I make?
1. Destructive & Incompetent Trader (see below for more details) in charge of entry of Cable-1. Not sure who was running the management.
Proficient Trader was in charge of entries for Cable-2 and Oil. Managing the position – again the Proficient Trader was in charge – carefully and patiently managing the stops, giving the trades room – except for 2nd portion of the Cable-2 trade.
2. The morning session was mostly ok – it turned sour just after noon on release of the EU comments. No trades were entered into prior to this point. The proficient trader was in control, exercising patience.
The afternoon session was spent mostly trading well (other than the position management on Cable-2).
Thus, all in all, most of the day was spent trading well.
3. Proficient trader could have come more alive in managing the 2nd position – at the peak this portion of the trade was at +31 (with stop size of 22.5) – although I was managing stop on the basis of technical levels – the ….
Voila – I bring to life the 3rd trading personality within myself – I present the Incompetent Trader – he is not destructive – he wants to be good and proficient but he simply lacks skill and experience. He does not tend to be driven by emotions – he is driven by rational and logical thinking and rules. However often his decisions do not prove correct – simply because he is still learning. The management of the 2nd portion of Cable-2 demonstrates. The stop adjustment was done on the basis of technical levels, however letting +31 turn into +8 is simply not competent trading.
The method for decreasing the Incompetent Trader’s influence on trading, is to continue learning the fine arts and technicalities of training, and to accumulate more experience – to work hard. By decreasing the Incompetent Trader, the Proficient Trader automatically obtains a greater circle of influence/control.
4. Bad trading – Getting unsettled by volatility-triggering news (in this comments from EU sources) – leading me to enter into a trade – and not reading the chart correctly. The actual ‘getting unsettled’ is not bad trading – but entering into a position as a result of it – that is bad trading.
Good trading – realising that I felt very uncomfortable and that a valid setup had not occurred (Cable-1). The trades taken in the afternoon after the gym. Excellent chart recognition and patience on Oil, and also on Cable-2. Picking the T1 level for Cable-2 – picked the level very well – with reference to supply zone from Monday’s session. Also great T1 level pick on Crude Oil. Exercising good judgement in closing the 2nd portion of the Oil trade, on basis of looking at risk-reward given T2 and tightened stop at $50.55.
5. What led to the bad trading – definitely the volatility-triggering event. Something that could have worked in conjunction was the prolonged trading session to this point – I had been at my desk for a bit over 4 hours – remind you, I had taken a 1/4hr hot chocolate break in the middle. And I was physically and mentally ok prior to this point in time.
6. No comment.
And here it is, my 3rd trading personality…..