It’s been a tough few days on the markets for me with confidence seemingly oozing out of every position I had open. I’m sure you can all imagine how close my finger has been to the close position button on all of my trades but, mostly, I somehow managed to hold on.
I wrote on Friday about how the market seemed to suddenly lose momentum and I was struggling then to decide whether or not to cash in or hang in my open positions.
With the support of other traders, I came to the conclusion that I should hang in and stick to my plan to let my revenue-generating positions run until they showed a clear signal in the opposite direction. I made this decision despite every trading demon inside of me hurling barbs of fear my way and teasing me to cash in my positions and sit things out for a while.
On monday, my two positions in Drax got stopped out. One on a trailing stop for a breakeven trade and the other for a small £12 loss. I saw this during the trading session and went through that panic you experience when things look like they’re all going the wrong way. I almost closed everything out and did a runner at that point.
I have to confess, in the end the fear demon did take a bite out of me and I closed out two of my winning positions in Marks & Spencer and Debenhams shortly after. I won’t be so bold as to say I caught them just in time even though their prices fell shortly after I closed them because even now, with a couple of days of price falls since, neither of them have taken enough of a hit to signal a reversal against my original position.
Nevertheless, it did make me feel good to close out these positions – as if a weight had been lifted from me. They are both still on my watch list and I am waiting for another buying opportunity in both – indicated by what I feel will be the end of a pullback (heard someone call this a ‘retracement’ the other day, I’ll have to look that one up).
The really important point to note here is whilst I didn’t trade to my plan in these instances, closing the trades gave me some kind of psychological or spiritual boost – enough to help me make the next big decision which, now I look back on, I am extremely proud of.
I left all of my other positions running even though they had suffered a substantial reduction in equity.
I can’t tell you how much these polarised decisions have fortified my spirits. They may not be the most profitable decisions but they sure feel like good ones.
So, yes, it’s been a really tough few days because I’ve seen my open equity fall from £230 to £90 but I am strengthened by the hard decisions I’ve made to keep the rest of my positions open and ride it out.
To conclude, I may not be a better trader yet, but I do feel like a tougher one.