Friday, November 03, 2006

Doing it the right way


One of the most important data of the month.

I had a plan, I executed that plan and got 10 ticks in the Euro, I was green and waited for the next trade in the Euro setting up.

Short 1.2750

Dogs barking

“Honey could you please help me getting all that stuff in the house I bought at IKEA.”

Exit 1.2749

“Sure my love”

30 min later the Euro trades at 1.2725, I would have taken 15 ticks at least on that trade.

Plus another 15 on the DAX which decided to scream up from 6260 to 6290 at the time my wife came home.

Yes I was a bit frustrated, but just for a short while because the question is:

What is important in life?

Sitting in front of a computer or

having a family?

I’m sitting in front of a computer a very long time each day, but important is my family. Yes I missed a good trading opportunity, but so what, I made another DAX trade later today for 15 ticks. There are so many trading opportunities each and every day. If you miss a good one, go on, take the next one. It might not be a home run, but it will provide you with all you need.

I wrote about the subconscious mind and the conscious mind being in sync. For me my family is important, so the answer: Honey, I’m a bit busy right now, can it wait 15 minutes is no longer acceptable, because I know, she would do the task herself then. Would I ignore that knowledge I would set me up for failure again.

I can’t change, I don’t want to change that feeling, that the family is important and I know my subconscious mind will find a way to show me, that the family comes first.

Unfortunately my subconscious mind is a devious bastard. It knows the one sure way to get me off the computer: Let Chris have a big loss and blast to his ego. Then he feels frustrated at himself and he will be no longer able to press the trigger. Most likely he will shut down the trading station.

Goal accomplished.

But I can learn and doing it the right way gave me 5 green days and the best weekly result of the year.

I’m away next week, so see you Monday in a week….

Thursday, November 02, 2006

Get your mind in sync

How did you manage to get your subconscious mind to work with your conscious one? Usually, the subconscious mind reminds one of one's past failures, mistakes, etc. It actually creates doubts and confusion to one's thinking.

You are absolutely right. It doesn’t work that way or it wouldn’t be the subconscious mind we are talking about. I did not get my subconscious mind to work with my conscious mind.

It was the other way around and it’s a daily struggle for understanding, listening for the small voice, not the loud one.

The first step is accepting that your subconscious mind has an agenda of its own.

Then you need to consciously identify this agenda of your subconscious mind. Sit down, take your time, have no pressing matters at hand, keep distractions out and just let your thoughts come to you.

Make a list of any worry, be it trading related or not, any unfinished business, anything you think you need to do, personal problems in your relationship, with your kids, with a friend or former friend, anything else your thoughts drive around for a while. As you say, often you will think about failures, mistakes, doubts. Write it down.

Now start working on that list.

Do the chores you had put aside for something more important.

Find solutions for your personal problems. Often it helps to see a problem from a different angle: Let’s say after living together for some years your partner starts developing an irritating habit. Nothing big, but for you it becomes a problem. You could start nagging, you could tell your partner that that habit is driving you nuts, but usually you can’t change another person that way, because there is a reason for your partner to have developed that habit. 
Maybe you are able to identify the source of that habit, maybe you can identify the reason why your partner is doing it. And if you do, you actively take it in your hands to remove that reason. Do it for a while and then talk with your partner, show him that the reason for the habit no longer exists, that it is taken care of and that -to tell the truth– this habit drives you nuts. Most likely your partner will listen.

Or identify why you are not able to take a stop, why you let trades go out of hands. There is a reason. It might be fear to admit that you made a failure. It might be, that you are just plain stubborn, ignoring evidence, that the trade is not working. Maybe you actually can’t afford to lose that amount of money. Maybe the risk you take is too big and your subconscious mind is interfering and trying to shield you from the reality, that you have a big loss in this trade.

I can’t tell you, what to do to actually solve these problems. There are professionals available, who can help you, if you can’t find a solution for yourself. I can only tell you, what worked for me: Writing

The need to bring thoughts in sentences structures and sharpens your thoughts and you can consciously work on understanding your subconscious mind.

What’s the goal?

Our conscious and unconscious mind shall work together towards a common goal.

We can’t tell the subconscious mind, that a certain reasoning, thought, action, emotion is wrong. It just is, it happens, and no reasoning will change that. We can teach the subconscious mind through repetition, but we need to be very careful what we teach our subconscious mind, as we might as well see unexpected results from our well meant teachings.

So the best way I found to bring the subconscious and the conscious mind in sync is:

Take your subconscious mind serious

There is a reason for the messages and signals it is giving you. Take them serious, accept that you can’t change the emotion you experience, find the reason, why you experience that emotion and see how it hinders your trading.

Now you just need to find a way to change your current trading in a way, that you don’t trigger that emotion, that subconscious response. You do that not by avoiding the situation, but by actively changing it, so the emotion no longer needs to be triggered, because you took steps to prevent the reason, why it was triggered.

The result will be, that your subconscious mind will start helping you instead of being a nagging hindrance to your trading success.

Wednesday, November 01, 2006


I'm a discretionary trader. Meaning I'm not able to mechanise my trade selection and trade entry and exit rules. I really tried, but failed miserably in real trading, even if back-testing looked so promising.

But for a long time my %-Win, %-Break-even and %-Loss trades remained relatively static.
So this June instead of defining hard trade entry and exit rules, I decided to trust myself to be able to achieve about the same statistic results next month again.

It was a very difficult process for me, as that meant giving up control and relying on my intuition to provide me with a feeling that a certain setup seen on the screen would fit my trade selection criteria, even if I'm not able to verbalise them all.

It was exactly what I had to do to become a profitable trader.

It's nothing to be recommended to a novice trader, as you need a lot of screen-time to train your intuition. For me it took 5 years looking at charts, which today still have features I had on my charts 5 years ago.

If you can compile statistical data about your trading over a long time and you see consistencies, you don't need to come up with a objective trade rule, you can replace it with a trust in yourself to achieve this result again. And you can then build on it and try identifying the areas in your trading which need improvement.

For me it was bringing down the average $-Loss / Trade proving market lore again right: Take care of your losses, the profits take care of them self.