Weekly Reflection

Wednesday, March 9th 2011 I reached the lowest level of my account in history. That's the time when I don't care about the result anymore. I just trade my plan. And the biggest wake-up call coming to my mind. Keep readin, maybe my experience will help you too:

Pressure.
Maybe most of you already know how pressure can affect the performance of the trader. Pressure is something you should avoid at all cost. Pressure create expectation.

When I was overconfidence several months ago, I thought the market as my own ATM machine. I kept thinking that it's easy making money. If I wanted, I just kept trading with my system and money will flow. I felt like a great trader, a big guy with awesome talent. I felt like a super trader, until subconsciously it crushed me to pieces.

The basic things first you should embrace is, cut losses small or early. If you can't accept this truth, you will fail guaranteed. This is the core of every traders out there. Cut losses early.
You must made your brain and yourself comfort with the cut losses early. I realized after the last one year, I thought I accept the cut losses early in me. I AM NOT!!! Why?

1. Often impulsively get back in trade after stopped out.
2. Adding the size of my trade after consequtive stopped out.
3. Against the trend with small stop losses.

All those things happened because I WANT TO GET BACK THE LOSSES!!! The real thing is I can't accept the losses. I don't want to get red on that day. I want as soon as possible make it green again. Sometimes I trade undisciplined, the worst. But even with disciplined trade, it won't solve the problem. It happened when I losed more than $1400 in less than 1 hour. Chopped out like crazy at Crude Oil. I trade disciplined, yes I followed all the signal there. The problem is: There's always time when we have to accept the losses, stop and go on to the next day. Always. There's also time when you stop, the market will move your way. Always happen and will happen.

So, before entering a trade, let's make questions for yourself that day. Simply yes or no answer:

1. Are you willing to stop trading after losing _________ (fill your max daily losses) today, no matter what happened to the market after you stop trading?
2. Are you okay if your trading plan today make you lost money?
3. Are you ready to let your unrealized profit gone because you follow your trading plan?
4. Are you okay being stopped out and the market moved without you in it because you missed/slipped the entry?
5. Are you accepting the truth that maybe your execution error will bring you losses of the day?
6. Are you okay even in the good market condition, you still can have a losing day?
7. Are you okay waiting all day and not doing trade at all because of the plan?
8. Are you okay if after you make profit the market still move further without you?
9. Are you okay if market stopped you out at the exact tick?
10. If all those 9 questions happened today, are you still can trade the next day at your best interest in mind?

If you answered 'yes' for all those questions, you still not guaranteed to succeed. You still need a good edge.