Thursday, 2 March 2017

Beginner Blog Series - To be... (Right)...or not to be... (Right) T-Model Trader


Hello Traders.
I am hard at work on the Pro Trend Trader course at the moment, but I always manage to find time to stop and read the blog posts from T-Model and Craig with a coffee in hand. I hope you all enjoy!
James Orr

To be… (Right)…or not to be… (Right)
I headed off on my morning pilgrimage to the local café for the daily journal writing a few days back, forgetting that I had completely filled my trading diary cover to cover the previous week. So instead of writing, I sat there flicking through the many pages, laughing mostly, cringing at times, but in general, fascinated by the many twists and turns that have taken place.
I came across an entry from mid-last year that caught my attention, to which I wanted to speak about. But firstly, I want to give a past work scenario to help explain.

A woman came to have a counseling session some years ago. After getting settled she began to explain what the issue was that brought her here and spoke clearly with insight about what was causing her problems. Added to this, her ability to see the problem from a variety of different angles was also very strong. In retrospect, I couldn’t have got a better run down of the situation.
Before I could respond in anyway at all, she then explained, again in some detail, exactly what she felt was needed to address the situation for the better. In a similar manner, she appeared to have thought it out clearly and from several differing angles of approach.
At this point and I was beginning to wonder why she was here, as it seemed clear she knew what to do. That day also happened to be my birthday and for a moment or two I thought I was about to be at the butt end of some prank, with people bursting into the room or the likes. But no. This was real.
As her accounts of the problem and solution were very through, a period of time had already passed by before she momentarily drew breath. During this pause in her descriptions and pondering upon my first response to all that I had heard, I was about to say something when she continued with….. “What if I am not right”?
It all came down to that sentence…. “What if I am not right”? In that sentence lay the paralysis. There lurked the foreboding reality that after so much thought and self-appraisal, that there was still that chance of “right” not being “right”. It was amazing to see an intelligent, articulate and capable person so completely frozen in fear and terrified to take “that” first necessary step, when it appeared that she had actually outlined what those “next” steps could be.
There is something of great interest here in what she stated about being “not right”. She didn’t use the words “get it wrong” and this I believe is most important. This is in many ways similar to what I said in an earlier blog about having spent the year trying to “not being a failure” at trading, rather than, “aiming to be a success”. Perspectives are so fundamental.
After a few sessions together, one of the themes that appeared is that it would be humiliating to be “not right”. Her high profile work also needed her to be “right” at all costs as well. She was at the time a senior advisor in the federal government at very high levels. Being “wrong” was just a human thing that happens to others, but not to her.

It was in May last year that this happened for me on the Ftse 100. I had loaded in all the zones for the day’s trading. Having listened to the analysis videos, I then checked out the different time frames to get my sense of the market. It certainly appeared that buys were definitely showing greater strength in this market.
About hour later, price had slowly wiggled down into a zone in a lack luster movement lower, which also gave me a sense that an upward move was more likely. This was also an identified buy zone as well from the morning review. To add to the picture, at the bottom of this zone was the 200 ma, sitting just above the pivot.
Then a buy pin bar formed. Price went up a little, then jiggled back down a little and formed another bullish pin, creating a nice double bottom, just to add to it all.
Then I just froze up.
I spent the next couple of hours watching price saunter upwards, bouncing off the 8 ma like a perfectly shaped stone skips over water. It went up and up and UP. Yep…..I watched the whole thing. I really can’t remember a trade set-up as juicy as that ever. It was like that “perfect storm” scenario where everything just lines up to create something profound. It was confluence on steroids.
I had been sitting there looking at the chart going…yep…yep...yep…..it’s all there….get ready to enter a buy position, when I just choked and couldn’t do anything. This particular trade “implosion” just hung around in my psyche for months like a benchmark of…of….well….stupidity…..dumbness….and the likes.
It wasn’t until I read about this trade again recently in the diary, that I recalled the session written above and the woman’s fear of not being “right”. I had thought previously, that it could have been because it was confluence overkill and that something inside me began to doubt the reality of what I was seeing. Or maybe it was something that was just going to happen at some point and that was the day.
What I do remember thou, was that same feeling as the woman spoke about… “What if I am not right”….creeping into my mind. Given the overwhelming confluence of several factors all lining up, then there was also every chance of being “right” on that trade. But that day, the fear of not being “right” won out.
It was like someone turning the lights off unexpectedly, and I just sat there in this suspended state. As there were a couple more signal entries that I could have taken after those two pin bars, then this wasn’t a fast moving…. “oh bugger I missed it” sort of thing. It was like my hand couldn’t move the mouse to click the buy box on the screen. I wrote in my trading journal back then… “My brain seemed unable to generate the sparks of action”.
I have experienced those feelings on many occasions that come in the early days of trading. Call it doubt. Call it nerves. Call it the… “What if I am wrong” scenario. But this was paralysis and I can now see that it was based on that sense of potentially not “being right”.
On that day the market did what it always does. It offered me information…nothing more and nothing less. Yet that day, for whatever reason, I seemed to internalize the potential outcomes as a personal thing, which it is not.
I could set off and analyze this to the cows all die of old age, but in the end, like the woman in the session, the fear of being “not right” crippled the situation. I think that underlying this reality is that I, for whatever reason again, lost perspective that there is always an “uncertainty” in trading, and that it is my task to load the probabilities in my favor.
In sitting there reading the journal, I noted that, like this situation outlined, there are benchmarks of trades that have acted like beacons in my development. Like that skipping stone, at some point it has to descend and hit the water in order for it to fly again. I guess that these trading moments are like points of friction that test the strength of the development at hand. It is also interesting to note in this regards that this “trade” was actually a “non-trade”, as nothing actually happened. Yet it still made an impact.
Till next time
T model.

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