How Can You Win By Losing....
Today was one of those days that you think about for a few days after. Yes I did do well but in my own mind I did not manage risk very well. This is more important to me than my wins or losses. I took two trades and quickly banked 20 ticks. Both were well read and both were good trades resulting in nice profits. However my third trade was a stupid trade. One that I haven't done in a long time.
What is more concerning to me is that I got away with it.
Bad habit and psychological lapses are bound to happen. Even to the very best traders out there. We are not machines and so this happens because we are human. I executed my third trade first of all without a stop. Next I did NOT define my target area to stop which I always usually try for at least 2:1 reward to risk. Next I executed a trade as I was in drawdown as a form of averaging. I kept the position. Fortunately the market turned and I got out with a small profit.
I fumed for a good 2 hours after the trade thinking about all that could have gone wrong and has in the past when I do this from time to time.
I immediately went to my bank account, drew out some money and took it to a charity of my choice as a means of punishing myself for getting away with the mistakes.
Do you do that in your trading. When you get away with one do you make yourself pay in some way? If you don't you should.
Why you say? Everyone gets a bit of a break from time to time.
To be a successful trader you cannot afford to have slip ups. You should trade with a partner at first when you are getting used to trading. One that will hold you responsible for your mistakes. The reason is simple.
You won't hold yourself responsible and a bad habit starts. This is how accounts get blown out.
Now today was a winning day as I caught the bottom of the move today nicely and the market formed a nice V recovery. However when I really think about it only one of my four trades was really good. That was the final one. I really did not wait patiently enough today for the right set ups. In truth I should have recognized this very early and simply shut down my trading station for the day. I have been at this long enough to know better. The times in my life when I suffered through the worst trading periods I have had is when my brain was distracted the most.
Trading Oil is tricky at best. You need to be sharp every day to have an advantage over the other traders. You must be able to see what they do not.
So don't be afraid to lose. Your winners will come if you always limit your losses. Never average down. Never add to a loser. Never get reckless and reward yourself. Never take a trade you haven't calculated in advance. Most importantly always use risk management.
What is more concerning to me is that I got away with it.
Bad habit and psychological lapses are bound to happen. Even to the very best traders out there. We are not machines and so this happens because we are human. I executed my third trade first of all without a stop. Next I did NOT define my target area to stop which I always usually try for at least 2:1 reward to risk. Next I executed a trade as I was in drawdown as a form of averaging. I kept the position. Fortunately the market turned and I got out with a small profit.
I fumed for a good 2 hours after the trade thinking about all that could have gone wrong and has in the past when I do this from time to time.
I immediately went to my bank account, drew out some money and took it to a charity of my choice as a means of punishing myself for getting away with the mistakes.
Do you do that in your trading. When you get away with one do you make yourself pay in some way? If you don't you should.
Why you say? Everyone gets a bit of a break from time to time.
To be a successful trader you cannot afford to have slip ups. You should trade with a partner at first when you are getting used to trading. One that will hold you responsible for your mistakes. The reason is simple.
You won't hold yourself responsible and a bad habit starts. This is how accounts get blown out.
Now today was a winning day as I caught the bottom of the move today nicely and the market formed a nice V recovery. However when I really think about it only one of my four trades was really good. That was the final one. I really did not wait patiently enough today for the right set ups. In truth I should have recognized this very early and simply shut down my trading station for the day. I have been at this long enough to know better. The times in my life when I suffered through the worst trading periods I have had is when my brain was distracted the most.
Trading Oil is tricky at best. You need to be sharp every day to have an advantage over the other traders. You must be able to see what they do not.
So don't be afraid to lose. Your winners will come if you always limit your losses. Never average down. Never add to a loser. Never get reckless and reward yourself. Never take a trade you haven't calculated in advance. Most importantly always use risk management.
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