To conquer oneself is a greater victory than to conquer thousands in battle. Dali Lahma
This quote was random from a google search this morning. It hit me with quite the insightful jolt from the universe as I thought back to how many times in my golf career I let myself off the hook instead of making the difficult grind back to contention. Also when I am impulsive and reckless with my trading.
Golf and trading are similar. It’s you against you. Not the charts, not the markets, not your playing partners, not the field, it’s you against all that crap you lock deep down inside of you. Many books I’ve read on both subjects that are written from the psychological perspective are based on one thing: if you can’t change who you are, then you can’t win.
Winning with your trading is all about the setup that you trust, that ironically, you believe you know. The setup on the chart will never raise it’s hand and say, “hey babe! here I am”. There is a feel for what the chart is forming. As in golf, you have to feel your way around the golf course. Nothing in life is 100% technical.
In the past few weeks, I’ve been studying Eliot Wave. There again, in their curriculum they talk about perception and feel. In the twitter sphere I’ve noticed some “old guarde” tweeting about reading tape. A “feel” for the tape.
I’ll tell you this much, none of this matters if you don’t first practice risk management. Plain and simple, successful trading involves minimizing your losses. If you have a big account, unlike me, then you can have stop losses and let winners run. Small accounts, like me, take huge risk with every play because the amount at risk is roughly 80% to 90% of my account. I can’t afford stop losses!
Reflecting on this mornings trades, I had a “feel” that this was the bounce day. It was cockchop for the first hour or so of the play but I was FULLY PREPARED to lose every single penny I placed on the bet. I waited a good hour before I decided to even trade. I studied the hourly trends and noticed that there were several attempts to break the hourly downtrends I had on my charts.
I’m a bit of a non-conformist when it comes to the strength of trend lines. Some “guru” teach that the longer the time frame for the trend and the more times it is tested then the stronger it is… common sense tells that the more something is tested that eventually it will break.
Common sense probably doesn’t have anything to do with it… I teach golf and common sense has no place in the game nor the swing.
I took the 267 calls with an average of 1.26. I mistyped on the first trade and got the first two for 1.32. The next single options was bought on the pullback at 1.16. I was determined to stay the course and I did. I had a plan and I traded it.