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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.


-Cyrus Sidhwa
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Comments ( 3 )

  • Howard says:

    Thanks for this detailed post, Cy! It is actually an encouragement, as I’ve been in a very prolonged “slump” as well. And suffering from some of the dynamics you mention. I appreciate your lack of “ego” in being honest about actual results recently. I wish you the very best in soon doing MUCH better! The things I’ve tried have only “succeeded” in the sense of keeping me from losing large amounts of money and in enabling me NOT to take it all too seriously (nor flippantly either), and “stress me out”. It’s not much different than your own strategies so I don’t think, at the moment, I have much to share that might be helpful. BTW, I’ve tried the “no way more than 10 trades (or 15) per week” but have found “valid” reasons to cancel that out by Tues. or Wed. I do still think that kind of rule can really help one’s trading and it HAS helped probably for a couple days or so… would more so if I would enforce it on myself. I imagine.

    Still, I think that identifying the reasons one had for entering the wrong direction or being “right” but a bit early or late and getting stopped out is at least as important as just cutting down the number of trades. One still has to generally enter high probability trades at decent (or sometimes even poor, in long moves) entry points and know when to reasonably get out. Anyway, thanks again for sharing!

    • Cyrus Sidhwa says:

      Thanks Howie! It sounds like we’ve had many of the same issues holding us back. I’ve had others email me similar stories, so having you post it here is awesome – your comments will definitely resonate with many in our community. One thing you said that many of us will relate to is that it is a lot easier to make rules than it is to keep them. I’ve broken my own rules so many times it really makes me sick. What I am trying to get through my (apparently very thick) skull is the real REASON for that 10 trades per week limit:

      I really only want to take trades in which I have tremendous confidence. If I only take those trades, the reality is that I would only take 3-5 trades a week. On a typical day, I usually only see between 0 and 2 setups in which I have great confidence (hence the 3-5 trades/week goal). If I actually wait for those setups when I really understand what’s going on, it’s more than likely I would get 35-50 pips in those trades. Everyone is different, but the #1 cause of me not being up 35+ after 3-5 trades is that I have traded when I am either a) not completely sure about the DB, or b) just kind of poking around hoping to find a lucky entry before being absolutely convinced that the real stop-taking has taken place. As I type this, it’s obvious how stupid that is, but I’ve done it more times than I can count.

      In all actuality, 10 trades in a week is a LOT of trading (unfortunately I’ve allowed 15+ many times over the past 7 weeks). Since the market doesn’t just continually give out obvious trade after obvious trade all week long, if I have taken 10 trades, it means I haven’t seen the market clearly enough to have made my goal in the first 3-5 trades of the week.

      I’m hoping I have reached a point where I am so tired of losing that I actually follow the rules I create with extreme discipline. In a way, it really just boils down to integrity: If I say I’m going to do something, I should probably do it…. I owe that much to my wife, to myself, and to the instructors who have coached me up for over a year and a half now. I feel a lot better about things going into this week, so we’ll see how I actually deliver.

      Thanks again for the comments. Let’s get this.

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