Originally posted to www.pipaddict73.blogspot.com on 9/26/14:
Well, the plan for this post was to talk about the steps I’m taking to break out of the slump, but today’s trading was incredibly interesting and provided some great lessons, so I thought I’d share about that instead.
First, the good:
Now the bad:
Sadly, instead of just staying in the trade like I’m supposed to, I got scared off like a little baby when the market took a little breath and got out at 1.8562. Now, given the state of my uber-slump, it is understandable why I took a profit. I hadn’t taken a profitable trade in weeks, so it was great to see something. However, this is NOT the style of trading we are looking for on this platform. At the time, I took the profit, I thought “Good job, I finally took a positive.” In reality, I had forecast the market perfectly, entered the trade nicely, but then emotionally fell apart when it was time to execute my trading plan. Damn.
I made this mistake a number of times as I kept catching little bits and pieces of the short market. The worst part of what I was doing was taking a positive trade and then not even waiting for a significant breath back before getting in again. In other words, I was giving up my better entry points for worse ones after only capturing 5-8 pips – and then getting back in and paying a 3.3 pip commission. This is ABSOLUTE STUPIDITY. If I’m going to target trade, then I need to stay in the trade and execute my trading plan. If I do decide to get out, I MUST wait for a breath back before trying to enter again. This is really crucial. Basic. Simple. Critical. But somehow I didn’t do it today.
Now, one thing I’m concerned about is not staying married to a trading plan when it’s going against me. This will be something I have to learn to balance. When do you immediately realize you were wrong and actually take the other side of the trade and when do you wait and re-evaluate. I’ve seen Shane flip the switch when he realize he was wrong and go from taking a -7 in a short to suddenly taking a +25 or more in a long. Maybe I’m just not ready to do that yet. Maybe it’s better if I just wait if I realize things aren’t going according to plan. I suppose it all depends on whether or not I really understand what I’m starting to see.
I’d love to hear your thoughts about all of this. Thanks for reading. See you next time!