H/T to Eyal, I found this interesting talk. I am loving it. Just how often we are deceived by our own miscalculations of the future, and make the wrong decision. Good stuff for the weekend.
Trading Psychology
Trading Edge, Less is more
A couple of blog posts that I found it to be useful. Enjoy reading.
I am quoting this from Tremble Hand Trader.
you don’t need more stuff you just need to practice what you have. That the endless search for market knowledge is wasted time. You are better taking what you know and testing and practicing that to death. After you have the basics everything else is just another layer of wasted complexity. What’s required is working on your strengths – niche development.
Sometimes, we just forget. Again and again we spent time readings books, blogs, forums to search for new strategies, new systems or the worst, new indicators. Focusing on what we’ve already known, practise repeatedly, enhance it and develop it to become our unique edge. I like the term, niche development.
Here is another post from TraderFeed
It could be argued that the mechanical accuracy of the trading method would be less important to long-term success than the trader’s ability to adapt to market shifts with risk management that takes maximum advantage of periods of valid signals and minimizes risk during periods of invalid ones.
I fully agree with the importance of developing the ability to adapt to market shifts. Nothing is going to work forever, being able to see the change and develop a plan to work in the current environment is the way to go.
We are the Champions, We are Manchester United
Look at this! You know we are Manchester United. You know We are the Champion of UEFA Champions League!
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Are you ready to trade?
Trading is a job that requires constant high quality performance. You can relate this to a stage performance, a tennis competition or even a business presentation. You slip, you screw up your own performance, and you will be penalized in one another way. Losing your audience, losing US open championship, or losing a potential million-dollar deal.
The fact is, you do not have to be in the market every single day. It takes tons of work to get yourself prepared before go on to the stage.There are times that, traders try to trade their day out even though they are lack of sharpness, having hangover, or even sick. They feel ‘it is my job to trade, I am a trader’. Yup, you are a trader, a stupid trader, or even worse, a losing trader.You have to respect your job (being a trader) by putting in effort to make sure yourself are in good condition and ready to give your best shot.
In the corporate world, you might be able to fool your colleague or your boss even though you are in bad shape. But not in trading. You can’t fool the market. You will get penalized for the poor performance. Good performance does not mean you are earning good profit, it includes making timely decision,getting a good entry, a good exit of a winning or a losing trade and trade with the correct risk measure etc.
If you know you can’t give the best shot today, please, stay away from the market. Come back tomorrow.
STOP! Wait Wait…Somethin’ is goin wrong here
STOP! Somethin’ is wrong here..
Though I thought of writing this in my monthly review later, I just can’t help thinking of the cause/reason of my mediocre March performance. OK, I am not losing any penny, instead, I am just having a FLAT month with a whopping 0.9 R profit to date. The months-long flu and cough and chopfest of stock index futures after the big sell off might be part of the reasons, but I am not using these as execuse.
Here are what I did this month.
I started a new strategy which is more like a scalping strategy. After flipping through charts after charts after charts, I decided to jump in with some real money. Well, things were not as rosy as I had thought. I hit problems like spread, confidence, order execution speed etc. I stopped this after I started feeling uncomfortable.
Secondly, instead of focusing on NQ only, I started expanding my trading basket to ER2 and ZG. This move was fine, but it was just too fast. I jumped into two instruments that I had never/rarely traded. So, the movement, speed, spread and risk level scared me a little. I lost confidence for a while. I have stopped this monkey act immediately and taken out ER2 and ZG immediately. Now I again focus on NQ.
Third, I am timid. When I am facing the situation that the risk required for a trade is far below my R, I hesitate to increase my positiong size. So, even though the trade painted out a nice picture in the end, my equity growth is still mediocre.
Solution? I don’t have it all now. The only ’emergency action’ I am taking now is focusing on One product One stup again. And I need to push myself to increase position size when opportunity comes.
OK. Now go back to trade.
Red packet day
When I wake up in the morning in Singapore, I see Straits Time Index dropped -157.74, the biggest one day loss I have ever seen since I started trading (It shows I am still young huh). and I see overnight NQ lost -87, YM lost -482.
World stock markets plunged on Tuesday as fears about an economic slowdown in the United States and the end of the Chinese economic bubble sparked a global wave of selling.
Asia was dragged down by a plummeting Shanghai stock market, Wall Street slumped, and the main European indices showed falls of between 2.0-3.0 percent on average at the close.
The sell down of NQ started around lunch hours, and I had already left my desk. The feeling sucks. I was unable to profit from this kinda day. Ok, I was thinking market had gone down “enough”, what a fool.
Stay safe.
