Friday, June 17, 2005

Let us know what you see in the mirror

Cantgetadecentnick posed interesting questions about the reasons why I write this blog, which I want to answer in the blog directly.

Writing is a way to focus myself. While usually I have a theme to write about, I don't know what the result will be, when I'm finished writing the article.
The last article was planned to be an article about Stopsize, because I had read a comment in a Yahoo group, where someone claimed to successfully trade the Euro currency futures with a 2 tick stopsize, but then complained about getting stopped out of decent runs.
You all can read what it became instead.

Writing this blog, as writing the Tradejournal I did for about 2 years, focuses my thoughts, it’s a way of my subcontious mind to express itself, if I don’t think about what I write, but just let the words flow. So, while on the one hand I’m interested in your thoughts and ideas, I don’t depend on them. Sometimes very valid points are made about flaws in my reasoning, as you all can see, when you read the comments about my series re the Defense strategy. Sometimes I get no comments, but nonetheless just writing about something tells me, what I’m really worrying  and thinking about on a deeper level of my mind. I’m writing articles for computer journals for about 10 years now and it always was the case, that I never knew, what would be the gist, the spirit of the article I was writing before I had finished the article.

I have had a real big emotional problem increasing my tradesize recently. Why? Because five years ago I got hit hard not being able to manage a size too big for me, losing about 1/3 of my then decent account in 10 minutes. Then I was still trading stocks and I played a hand too big for me with tools not suited for the task. Nonetheless, the wound festered and hindered my further trading career to a point, that I came to a standstill, even when I finally had learned, what to do and should have been able to increase my trade size again.

I recently met a trader, whom I see in the league I wrote about. She agreed to mentor me and help me along on the way. Why? She doesn’t want to sell me something. She has no trading system to offer. Still everything you do has some motive, some purpose. And in trading I became aware of something I intuitively always felt: Helping others helps yourself.

She talked about the size she handles regularily and this alone started the thought process which resulted in the article Risk vs Reward. After writing the article I was able to increase my size without the nagging thoughts in the background of my mind, that I would be unable to manage the risk, which comes with the increased size.

Trading is a lonely business. Most people you met in chat don’t trade real regardless what they say. It’s one thing to speculate, to formulate a plan in your mind, to write it down and to try to follow it in your daily trading. It’s something totally different, if you see a plan in motion, traded by someone else. By someone you respect for her trading ability. If you see how the risk of increased size is managed. If you see, that there still is no Holy Grail. That it all still boils down to your statistics. To do what you already do successfully, just with increased size, so that the return you get increases. Trading should be easy, should be fun. And it is, if you trade your plan, if you have rules, if you follow them and know when to apply them stricly or when to bend them. It is fun to learn. To see new ways to trade the same old stuff. To see, how it’s done successfully and then to build on this to integrate it in your own trading system, to make it your system.

You asked, if I can make the transition to the higher level? A few weeks ago, it was a dream I thought realistically impossible to achieve, because I knew I would not be able to handle that kind of size. The worry was too big. Now I know someone who is doing it. Now it’s reality. And I can achieve something real.