Thursday, 24 November 2016

Third Blog Post From The T-Model Trader

We are onto our third blog post from T-Model Trader and I hope you're enjoying them as much as I am. These are from the mouth of real beginner traders and hopefully offer some insight and also inspiration for anyone else who is going through their trading journey.

I hope you've all had a great trading week!

James Orr



Blog Post 3 - T-Model Trader
Since being asked to contribute to these blogs, I have given much thought to the challenges that I have been faced with in trading. The bleeding obvious in this list is dealing with “losses”. I would guess that there would be very few who step into the trading arena who haven’t in some way been hit by the intensity of the runaway emotions that are so firmly attached at the hip to the “loss”. Yet recently I have noticed a difference in my responses regarding this aspect of trading.
Dare I say that over the last week or so, that there have been “good losses” which weren’t the result of “dud trading” decisions based on emotional reactions. In looking back to these losing trades, I can see that the entries were in fact….ok. I followed the trading plan. I had ticked the right boxes. My assessment had in fact been clear. Yet they were losses.
As my stop got taken out on one of the trades, something very interesting happened within me. I clearly heard the words “fair enough” echo in my head. Usually my “stop taking” vocabulary is rather different and certainly more colorful in its expression. But this time, it was simply “fair enough’, said with the acceptance that that is how it goes sometimes. This is trading “reality”.
It wasn’t that the emotion had disappeared, but this time, acceptance was also present in equal measure. This is a subtle thing and I believe it marks a very important time of transition in my trading development. I “accepted” that outcome of the trade. In turn, I have begun to relax a lot more about my trades and broadly speaking, about trading in general.
In one of my morning reviews a while back, I could (yet again) see how I didn’t allow for the proper set up to unfold and jumped in on a trade, to only watch it go pear shape. So as I sat at the cafĂ© pouring it all out in my trading journal, all I could write was the word “Idiot” over and over. Then, like an opening line of a joke, I thought...… “How many idiots does it take to enter a dud trade”? And the answer is….Only one…. and in repetition it seems.
I just kept staring at the word “Idiot”. As though it was flashing in neon before my eyes, I instantly saw the word expand in front of me and came up with the following…..
I.D.I.O.T…….. I Do Impulsive Obsessive Trades. (I love a good acronym).
I then continued to write in my trading journal…….
Group facilitator: We have a new member tonight. Make him welcome……
T-Model Trader: Hello everyone, my name is T-model and I am an impulsive obsessive trader.
The group: Hi T-model.
T-model: I have been trading for around 10 months now and although I have managed to stick to the trading plan at times, I am constantly troubled by the desire to just place random trades.
The group: Ooh. Sounds challenging.
T-model: It really is. Just the other day this happened. The market opened and moved up through a zone, pausing half way to the next zone. Then over about 30 minutes a bunch of candles with lots of upper wicks printed. It was clearly obvious that it was rejecting any move higher.  However, it wasn’t happening in a zone, so it wasn’t a legit signal. I could feel my trade trigger finger just inching slowly towards the sell button. As I hovered over that sell, I actually clicked on it to bring up the trade conformation box. I could feel a cold sweat come over me, knowing that I was about to break the trading plan rules…again. But at the last minute I canceled. It was really close thou.
The group:  Well done T-model.
T-model:  Thanks. It was touch and go thou….real close I was to doing it. The problem is that it did sink like a stone, so I would have had a big winner. I would have got this right at the top only to watch it make a 40 point move in a really short amount of time. Not only this, but also as it passed through the zone below, it didn’t create a signal candle. I would have been a trading rock star. This IS the problem.
(This is word for word from my trading journal)
It is great to say, that over this last week, I have truly felt a great change taking place. On a few occasions, after just having my stop lightly brushed and taken out, price action did indeed move off in the pre-determined manner. I felt ok about this. It felt like a clean process. I was in fact in alignment with the trading plan and the price action unfolding, even if I got stopped out. A dud trade is a very murky affair loaded with a fistful of emotion in comparison. This loss was simply an aspect of how trading works. And I could accept that.
So I added one more…….
Every…..Moment…..Of……Trading…..Involves…..Ongoing…..ALertness……E.M.O.T.I.ON.AL
I have these printed off in large bold type stuck up on a pin up board in front of me at my trading desk. As I know I am sooooooooo likely to shoot from the holster (usually into my own foot) then it is a constant and ONGOING process of staying ALERT and not be the IDIOT.
The alertness is not just about watching for the right candle set up. It also involves knowing how my personality reactions are interfacing with trading. As an artist, spontaneous impulses are great. But not here. Not with a trading chart. This is the sort of “alertness” I am referring too.
Till next time….
Be well…
The T-model Trader.

3 comments:

  1. I've had lots of trades where there was a 'failure to understand certain key underlying priciples'. I think this is because I am a ' Trader whose ability is terrible'.

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  2. you know....having the ability to say that is I believe a TRULY great thing....It was when I said something like that to myself HONESTLY, that I began to turn it all around, simply because I was now starting from an authentic place. Patience, honesty and commitment.... is what will get you there.

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  3. Been there, done that! Great post Model-T. I've taken to typing 'FOLLOW THE RULES' on my chart and moving and placing it close to the action. If nothing else, it pricks my conscience when contemplating a daft move.

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