Today's wrap-up

Today was relatively uneventful for live trades, with only one entry taken on the EURCHF. However, it was still a very productive day. As I've mentioned before I am currently demoing a new trading strategy and that went very well today. The results were definitely encouraging, but the best part was my ability to stay within the plan throughout the day. Looking to repeat that performance every day for the rest of the year, and then possibly taking it live depending on what the results and progress have been at that point.

Weekly wrap up

This week was a success. It wasn't a success because I made a huge amount of profit, which I didn't. This week was a success because I followed my trading plan and exercised patience every day. Not every trade was perfect, but progress was made. Also, I started to demo trade a new strategy picked up from Blue on his stream. Continuous improvement is the plan and this week fit into that plan.

Discipline

A guy that goes by the handle T4 on blue-point-trading's stream was sharing yesterday that discipline is one of the key ingredients in successful trading. He said that what people commonly refer to as emotional challenges with trading just come down to discipline, doing only what your plan allows and nothing more or less regardless of what you may be feeling at the time. This is probably not the trading revelation of a lifetime, but is still very interesting way to look at things. Am I disciplined as a trader? Admittedly, not as much as I should be. What is discipline as a trader? It probably comes in many forms and all situations but here are a few that seem important at this moment. Am I only taking trades that specifically conform to my daily trading plan? Is each trade exactly the size it should be according to my plan, neither smaller or larger? Have I been managing active trades exactly as I should be? Was my computer screen configured the way it ought to be for me to trade? Was I watching the market and ready to trade when I should be? Did I update my trading journal and review my performance at the end of the day/week/month? Did I get the amount of sleep that is necessary to be productive today? These, and many other, questions will help me identify if I've been disciplined today or not. Finally, if I haven't been disciplined today what am I going to do tomorrow to fix that? Again, no revelations here. If you follow Dr. Steenbarger, SMB Capital, the Mind of a Trader podcasts, or any other relevant and qualified trading resource you've probably heard all of these things a million times. A next step for me is to ask myself these questions every day and act upon the answers if they are anything other than a resounding and disciplined yes.

Patience

Today marks the second day in a row that no trades were taken. Now, yesterday was only a partial day since I took most of the day off to celebrate Veteran's Day. However, it is still important to note this lack of trading activity? Have the markets been stagnant? No, I've just been much more selective about my trading plan for the past 2 days. I've decided that my string of recent losses reflects an incomplete understanding of what I was specifically looking for so the best idea seemed to be to slow everything way down and focus on one specific trade setup on one time frame. With the help of Mack from the Bluepoint trading stream the one hour chart has become my new best friend and I'm only looking for reversal candles that are the color of the direction I would be trading (red for a topping or green for a bottoming reversal). There have been a couple opportunities for this, most notably in the euro and aud yesterday morning, but I wasn't completely comfortable with either setup so no trade was initiated. Hindsight being 20/20 the euro trade would have been stopped out and the aud trade would have gone to my take profit point for a successful trade. Not taking these trades was a success in and of itself because the ability to walk away from a potential trade had escaped me over the recent weeks which I believe has contributed significantly to my recent drawdown. What tomorrow holds I do not know but my goal will be the same as it has been over the past 2 days, to only take trades with this specific setup. Once this becomes a habit I plan to slowly introduce other trades or time frames, but to remain patient and only take whatever setups I am committed to for that day.

Better

Today my trading showed some signs of life with 2 of 4 trades being good. Actually, one of the good trades was a loser. How could that be? I've been spending quite a bit of time this week listening to podcasts about trading psychology. They make it very clear that if you only define your success as the dollars made that day you are setting yourself up for a self-worth roller coaster. Initially counterintuitive, it actually makes sense. My focus all week has been on making one good trade. This doesn't mean the trade resulted in profit. Rather it means that I followed my trading plan to the letter and set myself up for financial reward. Beyond that there is nothing else we can do as traders. We can't control where the market goes once we've opened the trade. We can manage it to the best of our abilities but the end result is quite out of our control. The trade in question was a short usd/jpy which, if you watched the market today, would almost half to be a loser since it went up all day along with the broader market. The reason I consider it a good trade is that the 1 hour chart was showing the pair in a downtrend with price staying between the inner and outer bolinger bands (i use 2 with different settings) for a few hours. There was a reversal candle, which I should have taken, on the 10 minute and the pair consolidated for a little while. Then there was a bearish reversal candle at the 50ma on the 10 minute chart. This was a signal that he current longer (1 hour) term down trend should resume so I entered a short position. The price only went down a few pips from there and a while later I was stopped out for a loss. I'll take that loss because more often than not the current trend will continue in that situation and the exact same trade would result in profit. Follow the trading plan? Check. Good trade. Not a great trade because there was an opportunity to cut my losses once a certain price had been achieved and I didn't manage accordingly, but a good trade nonetheless.

Tomorrow's plan, one good trade.