… or is it?
For me, the day after a good day, sometimes turns out to be a bad day. It´s like a bad hangover.
Today, London open forex morning, was the typical example of a undisciplined approach to trading, though the preparation phase was quite ok, but not perfect.
A little excited in the morning, full of ideas with trading breakouts and such.
What I should have done was to follow the plan and
trade only trend trades (my setups).
An extract from todays Forex trading plan, GBP/USD:
“GBP – Could be about to break high 1.61490, else bounce back towards RBD 1.58181
On short term, it´s in quite a narrow range, but could burst in any direction soon.
* Short – If it starts trending down, be aware of resistance 1.60790
* Long – Try to position on a breakout through high”
(I should have known, before I started the session. With this tiny plan, I wasn´t really ready for trading)
In forex, I only trade trend setups on 1 minute time frame, with some help from Keltner channels (Explained in another post). So, the *Long approach should have read something like: “If it breaks high, watch the pullback and see if it´s starts to trend up”.
I don´t say it´s a bad idea to positioning yourself for a breakout, but if it´s not in your playbook it might just mess up your mind. Mine certainly did. I got stopped out several times, and after a while I started to chase it, especially when my limit orders didn´t get filled. At the end of my session, I even wanted to fade the level.
Lucky for me, I´m disciplined enough to follow my risk and money -management rules.
Discipline (Please bear in mind that I´m no psychologist in any way, these are just my thoughts)
I see two different approaches to discipline:
One is to see it as some kind of punishment if you do things that break your rules. Maybe that will work for some, but I think the subconscious mind still want to take shortcuts whenever it find it possible. Aren´t we all a bit defiant? The mind will start to compare the benefits against the penalty.
Another approach to discipline, which I think is a better way, is to not see it as a sacrifice or a punishment. For me, it´s like if you quit smoking, you cannot see it as a sacrifice, you have to NOT want to smoke anymore, you just don´t like it and you feel better without it. In trading, you simply have to love to take those high probability setups that´s in your playbook. It´s not a sacrifice to not be in the big moves.
If you compare, becoming a more disciplined trader to quite smoking, I think it´s the same resistance, but once you´re there, you don´t look back.
Keep it small
If you have a discipline issue, as I do. Keep the numbers small until you´ve overcome it. It certainly wont get easier just because you trade with bigger numbers. My guess is that some traders think that if you just have a lot of money at stake, you´ll become more disciplined and more focused, but I´m absolutly 100 percent certain that you will not. So, please keep it small.
I guess this didn´t turned out to be such a bad day after all. I learned a lot. And thanks to risk and money -management, the lesson wasn´t that expensive.