I am once again mired in a long deep slump. Strangely it started right around the time Fx365i made the switch away from WealthSmart to Smart Money profile. I had been trading reasonably well on the Smart Money platform for the 6 weeks prior to the switch. I don’t think it’s a coincidence, but I can’t explain it either. Part of me thinks it’s an ego thing: I thought I would be able to come in and help people, but instead I suddenly don’t know how to get in a positive trade to save my life. So, how bad is my slump this time? Out of my last 77 trades, I have only been positive on 25. Yea… 25-52. Damn. Additionally, out of my last 42 trades, only 2 (2!) have been for more than +10 pips. Wow. Talk about sorry. What’s that? You think pathetic is a better word? Yea, I can’t argue with that.
!@#$ %^&* ()!@!@#$ !@#$ %^&* ()!@!@#$ !@#$ %^&* ()!@!@#$ (pardon my French).
So what am I going to do about it? Well, #1, I have already lotted way down. I’m only trading at about 20% of the lot size I was a couple of months ago. Part of this has been forced by the margin requirements, but I have lowered my pip values considerably further than that. According to my account balance, I could be trading at more than 3 times my current lot size, but why on earth would I? With a good sample size to look at, I can see I’m only right on about 1/3 of my trades over the past 6 weeks. On top of that, the winning trades are small winners, so why would I trade the max?
On the flip side, I could actually trade an even smaller lot size, but I believe that would be counter-productive for a couple of reasons. First of all, everything in trading is a balance. When it comes to lot size, you don’t want to trade such a high amount that you’re a) either scared of how much money you could lose, or b) constantly on the verge of being forced to lot down. However, you also don’t want to trade too small of a lot size that it just becomes a video game.
I always want to be skill-focused and content-driven (this is why we don’t trade with our pip counter up). One of the problems I had when I first lotted way down a couple of weeks ago was that I started getting loose and sloppy in my trading. I found myself thinking I could run a larger stop because if the pips are worth less than half of what they used to be, then I could take a bigger hit without really feeling it. This was pure stupidity on my part. After all, if you get crap entry and are now risking 15 pips instead of 7 pips at the higher lot size, guess what? You are still losing roughly the same amount of money. Even more importantly, at least as far as long term trading goes, I want to continue to work on really nailing excellent entries in order to control my risk. When you lot down as far as I have, you have to be extremely cognizant of focusing on the skill and content of the market. If you allow yourself to focus on the money, it’s a recipe for continued disaster.
OK, so what else am I doing to figure out how to get out of this rut? Well, I am turning in daily screen shots and my trading report at the end of the week. Although I haven’t been perfect about doing this, moving forward I intend to do it every single day I take a trade. Fx365i student Todd Carson wrote a great blog post about turning in your screen shots and staying away from a fixed mindset. It’s a fantastic read and it really opened my eyes to some of my personal flaws.
As you probably know, Shane responds to most of the screenshots that are submitted. He pointed something out to me the other day I hadn’t even noticed. He mentioned that I have been over-trading (shocking, I know). I had actually been taking no trades for the first 2 hours of the session and then as soon as I took a loser, I was in 3-4 trades in the next 5 – 20 minutes. I knew I had been letting myself get emotionally beat up, but somehow I hadn’t identified the obvious over-trading. I have been able to use this to my advantage this week. On Monday, I actually made the exact same stupid move that I just described. I remembered the feedback Shane had given me and I have not made that same mistake since. I have now set a new rule: While an ideal week will involve 3-5 trades, under no circumstances will I take more than 10 trades in a week. Sending in screenshots and avoiding over-trading are two keys to breaking out of this damn slump.
Getting back into blogging is another tactic I am using to dig myself out of the hole I am in. One of the main reasons I started blogging in the first place was to try and fight out of a previous slump. I believe some of my best posts actually started out as personal thoughts in my trading journal. For some reason, although I consistently take notes about individual trades, I had stopped keeping a journal of my trading thoughts. This makes me realize that blogging on a consistent basis will be a lot easier if I spend time writing out my thoughts. Writing out my thoughts will bring clarity to my trading. Of course I trade better when I have more clarity (who doesn’t?). You get the idea.
Another strategy I am going to use to start improving my trading is that I am going to get back into the virtual classroom. Wade and Shane have put a tremendous amount of effort into that classroom and it’s an amazing resource. It is unacceptable, lazy, undisciplined, and loser / spoiled brat behavior for me to not delve into the classroom. I’ve got this incredible resource at my fingertips. Why on earth am I not taking full advantage of it? I’ve been trading like crap, can’t find my way into a seriously positive trade… and I’ve got a resource created by great traders that I can access 24/7. This is a no-brainer.
Outside of trading, I am working on two things. Number one, just this week, I finally started working out again. I haven’t really worked out since April. Exercise is well known to be the best stress-reliever available. I have a 24 hour fitness less than 2 miles from my house. There are a couple of dog-friendly trails within a couple of miles of my house. My Jack Russell Terrier loves the trails. I’m sick of having a fat and unhealthy gut. Hmm, maybe I should be working out. Another no-brainer.
The other thing I am working on as of the last day or so is to really try and let go of all the negative energy I have been carrying around. When I trade this bad, especially this far into my trading career, the frustration is through the roof. I mean it makes me want to slam my head through a wall (good news: so far I have only resorted to banging my head into my desk!). On top of that, my performance at work has been subpar. I believe this is partly caused by my horrendous trading affecting my energy and self-view. This weekend when I get into the classroom, I am going to take a deep breath and make sure I’m studying from a place of positivity and learning rather than having an angry clenched fist in my heart. Interestingly, writing out my thoughts, blogging, holding myself accountable with screen shots and weekly reports, and exercising will all help towards letting go of the feelings of self-loathing, depression and anger I am dealing with.
I’m really curious to hear what you do to get out of a slump or rut in your trading. Maybe you’re an athlete or a coach and you have ideas about how to help people bust out of slumps. Maybe you’ve learned some slump-busting techniques as a parent or a supervisor. Whatever the case is, I’d love to hear your thoughts on what you do to get out of a rut.