Wow, what can I say, after redefining my trading strategy at the end of August and making solemn promises to myself to stick to it, I’ve managed to ignore everything I promised myself I’d do and almost blow up my £500 account. Painful? Check.
In a series of about 10 trades over the space of 2 weeks, I’ve managed to get stopped out of almost £250 worth of positions. The really annoying thing is that in 80% if the cases, shortly after I was stopped out the price headed in my direction.
I mean, take barclays, for instance, I opened the positon on the 24th August at 187 with what I felt was a generous stop at 179 with a 12 point target of 199. On 5th September the position got stopped out, bang, £42 loss. Today, just 2 days later, the price has soared to 204. Words can’t express how fu**ing annoyed I am – but then, I know I’m supposed to find a way to disconnect myself from the emotion of it but honestly, over the last week I’ve found that increasingly more difficult.
Another cracker that just happened was Spot Gold. I opened a long position last week at 1675 and made the decision to hold until after the ECB announced their QE (or OMT) as they’ve called it with a target of somewhere in the region of 1800. For this position, I’d told myself to hold long, with a longer term target and look at the bigger picture trend.
I opened at 1675 and watched the price rise steadily to 1713 yesterday up to the announcement. I was sitting on a £380 paper profit on a single trade, which would have been my largest to date. I made the decision to sit and wait it out, expecting the price to fall and a ‘reaction’ to occur. This morning the price had fallen back to 1692 and I panicked and closed the position for £170 profit.
A few hours later I’ve logged back in and the price is now 1725, which would have been a £500 profit.
I actually feel physically sick and what I want to write here is a long list of vulgar expletives that might just convey how I’m feeling.
This pissed me off to no end so I just threw my hands in the air and spat my dummy out, figuratively speaking, and just started making a few rash trades on gold and even a few more rash trades on stocks.
After a few minutes, I realised I had to take some time out so I went and sat in the garden for a bit. It’s 23 degrees here so the sun is gorgeous. I sat drinking my coke with ice and just thought about throwing in the towel. I’m obviously shit at trading.
My mind wandered to other money-making ventures as I came to the conclusion that trading was not for me and I’m not very good at it – clearly. I started thinking about what other business I could get myself into that I would be better at. I let my mind excite itself at various possibilities but none could quell the sickening feeling I felt in the pit of my stomach and the constant urge to just shake my head and laugh at the irony of the gold trade. What a fucker, is all I could bring myself to say – over and over again.
After about an hour of mulling things over in my head, I realised that on both trades, the Barclays and the gold, fundamentally, technically, I’d actually been right. The price did go where I expected it to go, just not at the right time.
So maybe I’m not completely shit at trading, I’m just not good at it yet. Couple this with the fact that to start any other business, I’d be looking at startup costs and time costs and I’d probably always still remain interested in the markets so really, why bother with anything else if it’s going to take just as long to become an expert at that as what it will to become a better trader?
The reality is you just can’t build empires in days.
Things take time, knowledge and skill, and even the greatest traders in the world will make mistakes.
I’m leaving this post with a thought for the day; in the form of a great article which you can read by clicking the link below.