Monday, November 21, 2005

Been there, done that

From time to time you need to stop and think about what you are doing, what the results are and if the time invested is worth it, considering the results.

If the resumee isn’t: I’m doing 150% of what I reasonably can expect, and the results I get are just unreal, then maybe you should think back, take a look at your trading journal and look for times, where things went good, really good and pleasant. Where you had nice streaks of winning trades, with just one or two losers in between.

Being long enough in this business, I’m sure there are times like this for everyone of us. And now comes the difficult part:

  • What did you do then, what you are no longer doing today.
  • What changed in your trading,
  • in your chart-setup,
  • in the way you managed your trades.

Take a look at your charts from 3, 6 or 12 months ago.

  • What has changed,
  • do they speak to you in a way, your current charts don’t?

There are a lot of additional questions you might ask yourself, but leave out one:

  • Have the markets changed?

Yes, sure they have. Every moment is unique and we might not see the ranges we saw 1 year ago in the contracts we trade. But be honest with yourself: 12 months ago you did not see the ranges you saw 24 months ago. Markets are changing and it’s your job to adapt, to adjust your trading to the now. And actually that’s the next step.

Once you have identified a time, when you did good, not because you had 1 extraordinary good trade, but when you where one with the market and you have identified things, which worked then, but which you abandoned over time, then you have to take these things and adapt them for today’s markets.

Don’t discard everything you do today. You had valid reasons to change the things you did then to the state you are in now. There was for sure a reason, why you left something aside, which worked then. Still, say you look at an old chartsetup and you instantly feel in tune with it. Don’t take it 1:1 and replace your current charts. Identify, what it is, what makes them speak to you and integrate it in your current charts, as if you would add a new feature, a new study to them.

It’s like someone you respect as a trader told you: Hey Chris, did you ever try this or that study, that setting? You never did, so you take your current chart and add the study. You eventually remove something instead, as it is suddenly redundant and you come up with a new chart-setup.

Often it changes nothing, the new study is usually no more or less valid, than the one you currently use instead.But sometimes there is something new to it, something, which instantly speaks to you. Chances are, that your own voice from the past has something important to say to you today. Something which can instantly improve your trading, if you choose to listen to this voice.

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