“Your mind is like water, when agitated it becomes difficult to see but
if allowed to settle, the answer becomes clear.” – Tsem Tulku Rinpoche
No real change to what we have been discussing, so we just have to be patient and let things play out. In the meantime, here is some food for thought from our Trading Reflection post:
– In order to put yourself in a condition to succeed, it’s really important to have realistic expectations.
– Many can talk the talk but
few can translate this into a decent track-record… the basics are,
pretty basic but practice is more tricky. If this rings true for you,
you might want to focus more on understanding bet size and how that
effects the translation of your edge. Obsessing about entry and
triggers, all things being equal, is probably the least important aspect
yet very few ever get this. Remember that if you get your bet size
wrong, you could end up with a negative p&l even with a guaranteed
– In order to really make a
step-change in your trading journey you have to make a conscious
decision to be honest with your progress and accept full accountability
for your actions. You can’t afford to delude yourself and handicap your
progress. Always confront your problems, especially those related to
your mental game. Don’t find excuses, put yourself in a condition to
progress and evolve as a trader.
– Fear, indecision,
uncertainty and related emotions all tend to be linked to a lack of
understanding of the situation at hand. The more you work on your
overall domain knowledge, the less room there is for these emotions to
get in the way of you executing the task at hand. Furthermore, working
hard to understand ever-changing context quickly translates into a
better understanding of how to play whatever hand you get dealt.
– Trading offers you the
privilege to be able to create your own positive ecosystem. Don’t ever
take that for granted and work hard at blocking out negative influences
and putting yourself in the best possible condition to have a chance at
– In this game, resilience
and self-discipline are far more important than any kind of diploma or
certificate. No standardize test or program can really prepare you or
serve as a good predictor of how you will fare day in, day out, in a
live trading environment.
– In different shapes and
forms; ultimately leverage kills. Once you understand and control that,
you can get away with a lot and still be around to fight another day.
Remember, it’s about consistency and longevity.
– As hard as it may be for
most to fully grasp, remember that you don’t know what you don’t know.
Keep an open mind and always be ready to question your assumptions. If
you keep on thinking the way you have always done, not only will you end
up with the same results but you will also waste the opportunity to
grow and evolve.
– There is no reason to swing
for the fences every day. It’s about showing up, come rain or come
shine and playing the best you can with the hand you have been dealt.
You don’t need to be perfect and you don’t need to hit 100%. However,
what you do need to strive for is to do more of what you do well and
less of what you don’t do so well. Slow and steady; keep on moving in
the right direction.
– Make sure you understand the basics and then
find out what works for you. Don’t be in a hurry, give yourself time to
learn and put yourself in a condition to give this a real good shot. If
you are wired to trade, this is a great profession. If you are not, then
there are a lot of other things to do in life.
– Easier said than done but
once you have set yourself up with a realistic road-map; you just have
to stick to your rules, plan and set-ups. That’s the hard part. No fancy
things, no bells and no whistles; do more of what you do well and less
of what you don’t do so well. Never underestimate how hard it is to get
used to just showing up day after day and monotonously implementing your
– Keep in mind that
self-sabotage, whether conscious or subconscious, is probably at the
center of most issues you will face in your trading journey.
Furthermore, the root cause of this self-sabotage is usually linked with
a very basic lack of domain knowledge coupled with unrealistic
– Even if you are a
discretionary trader, this does not mean that you can consistently get
away without having a systematic approach to the actual execution and
management of your trades.
– This is a marathon, not a
sprint. The markets aren’t going anywhere; take your time and do things
the right way. Taking repeated highly leveraged shots at low liquidity
binary events is not going to result in a solid long term track record.
– It may seem
counter-intuitive but the truly great achievements come from setting
small goals/targets and repeatedly delivering on them not by setting
unrealistic goals and exposing yourself to the inevitable failure that
will result from consistently playing from a position of weakness.
– The key balancing act is;
being a flexible humble student of price action and market psychology
whilst being rigid on positive reinforcement and mechanical execution in
a live environment.
– There is very little to be gained by actively
looking at your p&l. The focus should be on what you are trying to
do and not how that translates into your bottom line. If you have done
your homework, you already know what the consequences of your actions
will be. The vast majority of traders benefit from taking their p&l
completely off their screens and not letting it distract from the task
– It is far easier to have a plan, wait for the
conditions you are looking for to line-up and simply execute than to
show up and wonder what you should do. In the long run, traders that can
take emotions and bias out of the equation and decisively execute, will
consistently have better results and less p&l swings.
– No matter how solid you get, inevitably, you
are going to be confronted with a lot of adverse and irritating
developments over the years. The quicker and better you get at
accepting/internalizing them, the faster you are going to continue to
grow/evolve both as a person and as a trader.
– Getting emotional usually tends to cloud
judgement and accentuate bias. We work very hard on trying to stay as
neutral and focused as possible; you need to learn to be detached. Stick
to the process and let everything else take care of itself.
– Peace of mind is a crucial
piece of the puzzle… don’t be fooled into thinking that it comes
naturally. Just like any other part of your game; it’s something you
have to work hard on.
– If you decide to go down the demo route,
remember that you are pretty much wasting your time unless it is done as
a proper dress rehearsal; everything needs to be done as it would LIVE.
Failure to grasp the importance of proceeding this way will inevitably
result in all kinds of struggles and false expectations.
– Broadly speaking, the
intellectual part of the work is done before your actual trading. When
you are live and ready to allocate capital, you are strictly in
implementation / execution mode.
– Forcing activity rarely
translates into a positive and smooth equity curve. Sometimes, there is
only so much you can do with the hand you have been dealt. Markets move
in cycles and many fail to truly understand how much of a waiting game
this can be.
– Fear, greed and getting
angry will only distract you. These emotions have a tendency of
‘switching off’ any kind of mechanical / studied approach and triggering
rash behavior that only detracts from the proper execution of the task
– Remember that the real edge is at extremes because that is where asymmetric risk reward comes into play.
– If you are trading scared,
you should not be trading at all. Go back to the drawing board, get back
to basics. There is no point in making things harder than they should
be. You can lie to yourself on the surface but not deep down inside. If
you don’t really know what you are doing, you will probably not be
feeling comfortable and this should not come as a surprise.
– Goal setting is a lot
harder than it may seem. For a lot of people, consciously or not, there
is a real struggle between setting goals that are either too easy or
completely unrealistic. It’s important to set smaller milestones in the
context of a bigger picture/plan.
– You should never be in a
position where the outcome of one single trade could change your life;
neither for the good, nor for the bad. Once you really internalize this –
and it’s a lot harder to do than it may seem – then you are ready to
start working on consistency and longevity in a professional manner.
– It would not be natural to
not have to deal with all kinds of emotions but it is essential to
understand that a low, focused and consistent level of intensity is
key. The vast majority of people that become proficient have learned the
importance of keeping a level-head and tend to reflect this kind of
attitude. The calmer you are, the more focused you can keep yourself and
the more effective you are at executing.
– Trading is an extremely
hard way to make a living. Don’t let anyone tell you it can’t be done
but equally, don’t let anyone give you the false impression that it is
easy, that there are shortcuts or magical formulas.
For all of the new followers, don’t hesitate to explore all of the content on the blog. The interviews
could be a very interesting place to start to help put the business
of trading into context and to give you an idea of what to look for in
terms of realistic expectations. There is a lot of free content on the
blog for those that are willing to take the time to explore.
Should you be interested in a more in-depth discussion on the topics
mentioned in this post and a more structured approach to setting
yourself up to have a chance of succeeding, you might want to check out
the Foundational Webinar Series.
As always there is no substitute for real-time/live action; if you
are interested in attending a daily morning call into NY with a more
detailed live discussion on all the charts and ideas we highlight/review
in the outlook video and here on the blog, you should check out our Daily Webinar Group.