The idea of having people around you in one’s trading journey has been mentioned several times on this blog, most recently in the Trader Buddies article.
In the last couple of weeks my trading results were somewhat dire (once again) – consequently over the last week I caught up with several people (either in person or by phone) who I see as part of my ‘support’ or ‘team’ structure.
Here’s some of the points that came out of the conversations.
TraderDi, prop trader and trading coach
She made the following points:
- Looking at my trades, I have added to many things to the strategy (question to self: what things have I added? how I have made it more complicated?)
- Suggested swing trading might be more appropriate for me
- Review the sessions in which I had positive trading results – did I have more focus during those sessions?
- Level of Focus required in trading is very high – similar to that required by elite athletes
- By carefully reading the notes on my charts, she can see what is going on in my mind during the relevant trading sessions.
- I have strayed from the path to some degree.
- This issue that I am hitting is NOT a system issue – the system that I am trading is working – although my testing was on the 1H timeframe, I am essentially still trading the same system, just on a lower timeframe – she says that there are many traders trading profitably with this system. [She has mentioned on earlier occasions that traders can fall into the trap of hopping from one system/strategy to another and that this is not the way to becoming consistently profitable]. She says that the issue is with me. Going to another system is not addressing the issue that really needs addressing/the root issue.
Trader ‘M’ (discretionary hedge fund trader)
He was able to make several points and/or raise questions as follows:
- Trading too many instruments on too many timeframes – this can become unmanageable and/or unmaintainable leading to poor trading perforance, or burnout, or both
- Not having enough time and/or alertness to properly review executed trades and/or charts for valid setups – will have adverse impact on trading progression
- Not having enough time for life balance – will increase risk of burnout
- Check what your aims/objectives are – what returns am I looking for? What lifestyle/quality of life am I looking for? How much screen-time/instruments/timeframes will I need for that? [This is something that traderDi has also mentioned]
- Not being able to spot a valid setup in reviewing the chart – this means that I don’t have a clear enough picture of my setup in my mind – it means that the setup has not been documented clearly enough – it also limits the progression I can make with the strategy as I am not able to establish why missed setups were missed
Ideas to consider that came out of this conversation for me:
- Clarify the setup that I am looking for, to the extent that I review charts afterwards and easily identify all the valid setups
- Reduce the number of instrument-timeframe permutations to something that is maintainable, manageable and that allows me to meet my desired returns
- E.g. move from 5M-15M-30M-1H for DAX-US30-AUDUSD-GBPUSD-EURUSD-USDJPY (24 permutations) to 5M-15M-30M-1H for DAX-US30 and 30M-1H for AUDUSD-GBPUSD-EURUSD-USDJPY (16 permutations) – initially that appears as a 33% reduction, however the 5M and 15M timeframes require significantly more attention/focus than the 30M and 1H timeframes
- It seems insane that I have seriously been attempting to trade these 24 permutations for the last 2 months for both continuation and reversal strategies
- Reduce live trading time, increase time spent on working ‘on my trading’
Once the setup is clear, I will be able:
- Execute the setup better in real-time
- Review charts to spot valid setups
- Practice execution of setups in simulated environment
Paul Wallace, prop & fund trader and trading coach
- Concerned that I am planning to move to scalping – considered that this would become the mechanism for me to blow myself up – is glad that this is in fact not the case – was going to suggest for me to take all of April off
- My Work Ethic is very good
- Considers me as a good trader – and the potential to be a very good one, it’s just a matter of 1-2 things not having fallen into place yet
- Agrees re point of overcomplicating (with TraderDi) – recall that Steenbarger mentioned that in his webinar – traders love to overcomplicate things
- I have not found my setup – my trade – the ‘George’ setup – I need to be able to identify it easily on the charts
- Paul has a pattern bias for trading – an Irish trader colleague of his has a bias towards trading price levels – what is my bias?
- It’s great that I have a number of people around me who are willing to help me and “who are rooting for me”
- Agrees that therapy would be a good investment – regardless whether only for trading purposes, or for life generally
Mr X , a very successful entrepreneur
The talk with Mr X was somewhat of a contrast to the other conversations. His knowledge of the financial markets is more restricted. Although he didn’t say it directly, I believe he was trying to encourage me to put an end to the trading at some point. He complimented me on my stubbornness in pursuing trading thus far and not giving up. But he was saying that at some point you have to be able to say that it’s not working – he is of the opinion that it’s very difficult to make money in the markets based on some of his own attempts and those of business associates.
Lots of food for thought. Have a nice weekend everyone.