The recent market has definitely tested the patience of lots of traders, mine included. I am over willing to go short, so the markets direction is not the problem; it is the cost action which has been hard. The past several weeks have been marked by trades beginning to work only to reverse and cause teeth gritting and table banging! Take heart! You are not alone if this is the way you have felt.
Be Positive and stay in a Negative Market Trading is not always simple. They say if it were simple, everyone would be doing it! Not to mention that if that were the case, they wouldn't be paid as well when they are right.
Possibly the most frustrating part is that the market has been drifting steadily lower but the intraday moves have been sloppy and sudden, making it hard to chase trades in case you did not already have a position. For me, this has resulted in some winning trades and some losing trades and overall, not lots of progress. They are not seeing smooth moves followed by tiny pullbacks that offer multiple chances to get on board a trend, but speedy whooshes followed by complete reversals on a dime. This won't last forever, I am confident of that.
In my trading past, I would continue to trade aggressively in the coursework of times like this even when my results were less than great. This resulted in greater frustration and deeper account drawdowns, which meant that one time conditions smoothed out and I got back on the profit wagon, I had some ground to cover to get back to where I had been. I was one time also mentally worn out after wrestling with the market to no avail.
Hopefully, one time the market moves become more predictable (they may never be simple, keep in mind), I can resume profitability from the same place I had been, than make my own funds back before growing my account again.
This year, I am trying to take a different approach, and so far so nice. I made it a New Years Resolution to back off significantly when my trading results began to slow down or suffer, hoping to shallow out my account drawdowns in the coursework of rough trading conditions. My new approach has me being much more selective with not only which trades I take, but what size I do those trades in.
When day trading or swing trading, they regularly feel bound to always be in a trade to stay busy. Busy is not always nice in trading, I have learned. The mark of a great trader isn't measured by profits made when correct, but how tiny do they lose when they are wrong. Recent market conditions are ideal for putting this thought in to practice, with lots of narrow-range days and only an occasional move to catch. Fighting this whipsaw market action will have your confidence lowered and your confusion heightened to the point that when smoother waters do arrive, you are reluctant to set sail. Be willing to patiently wait for your favourite trading conditions. They are going to be here so be sure you are prepared for them mentally when they do arrive.
Stay patient in this market, and make your trades show to you that they are worth keeping. With commission costs so low, the willingness to exit and re-enter is an cheap way to step back for some clarity.
Overall, make it your objective to stay positive in a negative market, along with your account balance and your mental toughness intact. Keep a nice trading book on your table, and stay mentally sharp for the better conditions which are sure to return!
Post a Comment