No Plan, No Trade
March 23, 2006 by Trader Rich
I’ll admit that I’m a bit discouraged by the uncertainty of my trading plan or lack thereof. Whenever I do try to develop one, I just get overloaded with information to the point where I don’t even know where to begin. Therefore, this week I have not been trading much. The only trades that I placed were generated by my Dooku trading system that I have already lost confidence in due to the weak backtesting results it generated on data from 2000-2003.
So where does this leave me? I’ve actually been getting more involved at my full-time job lately. I don’t know if this is an ominous sign that my Project is failing. I know that I’m just a little down on myself right now. I have to realize that I’ve only been doing this for about 9 months now and my journey has really just begun. I’m going through the same learning process that a lot of traders who are now successful traders have gone through. I’m also going through the same learning process that a lot of traders who have since failed have gone through. What keeps me going is that I find trading to be such a rewarding experience and I enjoy it immensely.
I’m not a quitter and I know that I’ll continue to grind it out to see where this takes me. What do I need to do to get back in the right mindset?
1. Continue to develop a simple trading plan, either mechanical or discretionary. I’m leaning more towards a discretionary plan right now.
2. Put more time into analyzing multiple time frames of currency pairs. What may help is for me to pretend I’m a currency strategist and each day write up my own thoughts. At the end of each day, review my prior thoughts to see how well I did.
These are really the only 2 ideas I can brainstorm right now. For all of you that are just starting to explore the world of trading, don’t let my discouraging thoughts seap into your minds. Just realize that you too will go through this and it’s all just part of the process.
Popularity: 4%
Loading ...
Rich,
You’re almost onto it. You’re too enslaved to the past. You were right in a previous comment when you said that markets were dynamic. Heed that advice!
Your recent system for example, …Just because it failed on the backtest 4 years ago…Who cares? That was a different market. It’s not here now, and it’s not coming back. If you can maintain _some_ stability - consistent for the last year or 2 years - take it. Backtest other methods while you use the one that works currently. I don’t mean to say that you should stay with the the flavor of the day, but more along the lines of “do what works now, plan for the future, be prepared when the markets don’t suit your methods anymore, and stay on top of it” Backtesting is good, but it is not God, so realize that, much like the EMA, the most recent data carries more weight. But on the other hand, it could just be what works for me…
Thanks Tom. Your absolutely right.
Rich,
Keep your spirits up. Listen, I am a trader at a US equity hedge fund and I can tell you that I want to be doing this on my own account as well. Politics in the workplace are poisonous, and distracting in a way I never thought imaginable.
I’m with you and am trying to better myself. We all have bad days, these days my account has been overly volatile due to some leveraged positions I am comfortable with, but the fluctuations hurt my P/L.
Keep at it, you’ll get through. I like your idea of being your own forex strategist, I am sure it will help.
The best of luck and more importantly, the will and focus to see it through.
Ali, thanks for your encouraging words. I work at a big financial in NYC and I know how the politics are… it’s rough everywhere it seems. Once again I appreciate it.
Hang in there…you’re trying some new things and its when you are getting close that the setbacks often seem the greatest. Keep it simple…you already know that. You shared some great insight as well as your ups and downs…kudos for your frankness. Anyone who says they haven’t been there too is just fooling themselves. If I can be of any help, please don’t hesitate.
Thank you Raghee. It is quite motivational to hear encouraging words from you. Thanks!