Monday, March 23, 2009

3-23-09 - You ain't a trading robot!

First, I'd like to say a big thank you to Don Miller. Somewhere in his vast collection of videos he reflects on a truly sage piece of trading advice, and that is that he trades based on emotions. Not his emotions, but the market's. This isn't some news flash to me; however, I never really trusted those signals. I traded in my robotic, mechanical fashion like a retarded monkey. With this piece of advice, and my wife's admonition, "you never trust yourself to trade right" (ouch!) I decided to change how I prioritize my trading.

I have always had a very strong interest in trade tactics and mechanics, but I realized that my strategy of "capturing short-term momentum moves" was about as vague and useless as one could get. So, I'd like to change that to "capturing short-term momentum moves based on extreme emotion in the market."

With that change, we've had some good results today. Interestingly enough, I called each emotional swing (if you will) correctly. But I'm still working out the bugs in execution. You'll also notice I'm trading half size at this point, and that is for two reasons: 1) my trading was poor last week, and 2) I'm scaling into and out of trades.

Overall result for the morning: +14 - what it easily could and should have been +24. Still, if anything, I am more excited to trade than ever. It felt right trading this morning. I knew things. I traded based on what I knew. The mechanics supported me, but didn't stifle me. I felt like an artist.


P.S. Just made another 10 pips on yet another emotional golden opportunity this morning. Too funny. So make that +24 out of a possible +34 for the day.


Jules said...

Good for you, LT! Exit has gotta be the toughest part of the game.

I find it amusing that while I've been too human, you've been too machine-like :-)

I'm making an effort to get mechanic with very unimpressive result. Testing a setup and was really upset to get stopped out twice - costing me half of the "profit" I made in the first trade. Think it will take a while for me to get adjusted..

But congrats on your result! Rock on!! :-)

Lord Tedders said...


Thanks. While I think its important to have solid mechanics, if you ignore your instincts about what the market is telling you, this conflict inside yourself builds until you let it out - usually by doing something stupid :P