I am still taking some setups that I afterwards judge as sub-optimal. Some are ok and some are quite simply bad. I am sure that I am able to judge the quality of the setups at the time that I take them. So I will make a bigger effort at only taking good setups and at entering them at good levels.
My gut feel is that the reason for taking bad setups is that I am greedy or fearful that i am going to miss out on price moves and on trading profits, when in actual fact the opposite is true. By only taking good setups I will probably be able to turn myself from a scratch trader into a winning trader. And I should feel a lot better during each trading session – not necessarily “better”, but less stressed, less angry, less frustrated. (Added 22/8: Am I afraid that there are not enough good setups in the market? Is that why I believe that I need to take bad setups in order to make money?)
And I believe these are vicious circles – I have tried to explain my thinking with the diagrams below.
So maybe that’s all that it’s going to take now – just stop taking bad setups and getting in at bad levels – maybe that’s all that’s missing from my trading operation becoming profitable! Fingers crossed, I will find that out after my long holiday (during which time this blog will be very dead!!).