Tiger Woods style trading reviews

tigerYesterday got inspired by watching YouTube documentaries on Tiger Woods.  Tiger tried to learn from every single round he played (competition or practice) – he’d go over the round in his mind to figure out potential improvements  – this reminded me of the need to diligently documenting + reviewing completed trades, always looking for weaknesses and findings ways I can improve.

Am planning to write about the general benefits of reviewing one’s trades and trading processes in the near future – similar to how I tried to outline the benefits of blogging, the benefits of trading buddies, the benefits of working in a trading office etc! But for now, to illustrate my point, I decided to share a bunch of trading insights I made today after reviewing trades from the past 2-3 weeks.  Might useful for other traders to quickly check out!

Insights coming out of my review today:

[WARNING – This will most likely put most non-traders, and probably most traders, to sleep!  It’s insightful and exciting for me – but who knows about the rest of the world!]

  • Paying attention to how I feel (emotions, physical feelings, mindsets) is making a big difference to how I approach the trading session, and how I approach individual trades – it leads to me passing on many situations that I’d normally trade – however I still ended up taking the same amount of trades, as not being in mediocre setups has allowed me to continue hunting for higher quality ones – and it lets me stay fresh for longer.
  • I seem to have underestimated the true cost of taking trades when I am not feeling right on the money, or when I leftover emotions from the previous trade(s) – it’s not only the ‘cost’ of getting into a trade I shouldn’t get into; it’s also the opportunity cost of missing out on better, higher quality setups – creating more anxiousness by virtue of knowing that I am not doing the best I can, then having trouble managing trades simply because I started out from a spot/entry price, and triggering tiredness, and then creating more negative emotions from having more negative results.  It’s been quite an insightful week thus far.  Could this be a breakthrough?paper-1330887_1280
  • The rule of thumb trade management rule about two consecutive closes on wrong side of EMA seems to be a good, simple and effective approach.  Always use the 5M for judging this, even if the XTF (execution timeframe) is 1M or 15M – if XTF is 1H, then use 15M for that purpose.
  • Closing trades early – often driven by fear – rather than simply following the basic trade management rule, has had a big adverse impact on the overall trading results.  Yes, I reduced losses on the trades that didn’t work out – however the foregone gains on premature closes that turned out to be winners, were far greater – by a factor of 2-3 times.
  • On average, half of the setups I take work – regardless whether it’s reversals or continuation/trend-following.  Reversals work about half the time, regardless whether I use 123 patterns as part of the setup or not.
  • There are still occasional trades where in hindsight I judge the setup to be poor – not many though – how many out of how many?
  • Thus simply taking good setups and using the trade management approach that is set out above, should work, without needing to worry about micro-managing the positions
  • Am finding it helpful to have other traders around that I discuss trading matters with – whether they be traders belonging to the hedge fund, or trading buddies that I have created alliances from retail trading circles (mostly the Veteran Traders Project and the London Traders Network)

If you want another example of a trader that does extensive reviewing, check out Bund-trader Adey on his blog takingonetradeatatime.com.

 

This entry was posted in Psychology, Reversals Strategy, Trend-Following Strategy. Bookmark the permalink.

4 Responses to Tiger Woods style trading reviews

  1. Good post. As a trader you should be focusing on what Mark Douglas calls ‘Flawless execution’. Journal everything that seems to prevent you from doing so.

    Most likely it is your feelings that are stopping you doing from doing so.

    Feelings of fear, feelings of boredom and impatience, feelings of greed, feelings of uncertainty and anxiety and frustration and anger. Feelings about losing faith in your method/system. Feelings about losing money in the past. The feeling of losing faith in your ability to trade any system. The feeling of not being able to understand your feelings!

    As Ed Seykota says:
    “Our work is not so much to treat or to cure feelings, as to accept and celebrate them. This is a critical difference.
    The feelings we accept and enjoy rarely interfere with trading. Trying to treat or cure feelings adds mass. When a feeling dissolves, it ceases to be your enemy and begins to be one of your allies.”

    Liked by 1 person

  2. Pingback: Nuts and Bolts review of today’s sub-optimal trading & lessons learned | Trick or Trade

  3. John6 says:

    Insightful self review. Trading may be seen as an activity were you make progress by achieving a level of ‘unconscious competence’ – consistent trading becomes second nature. So learning to become more aware of your feelings and acting on your expert intuitions, while complying with a trading plan, is a key skill to develop every day. Curtis Faith and Mark Douglas emphasize this approach in my opinion.
    ————————–
    P91 Mark Douglas, Trading in The Zone

    “Tapping into the left brain…an inspiration, an intuition, a hunch, or a sense of knowing that usually can’t be explained on a rational level…the rational, logical part will almost always win, unless we take specific steps to train our mind to accept and trust creative information. Without that training, we will find it very hard to act on our hunches, intuitive impulses, inspirations, or sense of knowing.

    If our mind has not been properly trained to trust this source, then at some point in the process of acting on this information, our rational brain will flood our consciousness with conflicting and competing thoughts. These rational thoughts…will have the effect of flipping us out of “the zone” or any other creative state of mind.”
    ————————

    As you become more aware of your emotional states, you also become more aware of the psychological cost of taking trades or exiting trades against your more intuitive insights when in a below average mental state. Part of the pain comes from the regret of not trusting yourself – and it can be hard, unnatural even, to trust your own opinion against the crowd. Rushed and mediocre trades can also result from scarcity-based boredom and impatience rather than the more abundance based patience and belief that there will be great opportunities IF you are prepared to pay the unnatural psychological price of waiting.

    Recognizing these intangible costs of ‘taking trades when…not feeling right on the money’ in real-time is definitely a breakthrough for any trader. You are also focusing more on developing a mental discipline rather than just reacting to market activity. Rewarding yourself with a small treat when you take a good trade in a peak mental state can also be helpful as it helps to train your unconscious mind to pursue excellent trades if it knows there will be an immediate tangible reward, even just a coffee and cake, rather than just a few numbers on a screen.

    Liked by 1 person

  4. Pingback: Trade Reviews: Lessons learned & Pre-Session Biases | Trick or Trade

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