Inordinate Amount of Effort and Time, Results?

November 21st, 2018 | 5 minute read (Repost from We The Market)

I have been pondering something I and Jack, a person I am mentoring, have both said. Something similar to: I have put in an inordinate amount of effort and time but the financial results are negative. The bank account does NOT reflect the tears, sweat and blood that has been put into day trading. I told my wife that I have put in an INSANE amount of time into studying and learning everything I can about the markets this last year. At this time there is no financial reward for the amount of time I have put in.

Being older and having much life experience I have accomplished a great deal of success. Forgive me if I come across as bragging in the next few sentences. Whatever I have put my mind to in life I have succeeded. I have collected so many trophies and awards I can fill a room. In the last couple of years I have won several bare bow archery tournaments. I have competed and done well in gun shooting competitions. After 7 months of trading and not seeing great success in my financials I decided to compete in a Spartan Race. Did I still have the grit, determination and will power? I finished 1st out of 90 in my age group and top 5% (125 out of 2600 competitors) in total. The point is, I put in time and effort and there was a positive result. This has been the model I have followed most of my life until I started day trading.

Giving this much thought, I believe that we must be studying the WRONG material. I shifted my studies toward my psychology because I believe that is where I am failing. If I would break down my mistakes the majority would point to breaking rules. Why did I break the rules? My psyche. I have some trades where I would cut my losses. Excellent. But then the loss would make me revenge trade to make up the loss. When I revenge trade I would use the incorrect position size and the entry was not a planned set up. This is a psychology problem. A person might point out that it is a technical problem because I chose the wrong direction. There is more to argue here. That same trade did in fact go in the direction I predicted. The problem was a severe, fast spike in the opposite direction forced me to stop out. The spike reversed back to my original direction. It happens. What should not have happened was my emotional reaction. Please also understand that you must always be learning from the dynamic market. I am not an expert on technicals but at this point I have a statistical edge when reading a chart. As a new trader, my losses are larger than my winning trades. A phenomenon that plagues all new traders.

Which brings up another point. Maybe we are studying the right material but we are not performing to what the mind knows. I can read everything I know about archery. Can I hit the bulls eye after reading how to perform that feat. NO, not in the beginning. This is where practice and experience comes into the mix. If this is the case with day trading then there is a race going on. The race is, will I turn the corner before my account is wiped out? I do NOT have a large trading account. I know there are paper trading accounts. That is simulators, no money is envolved. The problem is I can do well in a simulator but when there is skin in the game my psychology changes and so does my trading.

I have been re-evaluating from time to time and shaking things up drastically to make a difference. I will keep searching for the right model to follow until I find consistent profits. Profits larger than losses. I am experienced enough now to understand there will be losses and that does not bother me.

Be mindful and trade well my friends.