So here it is…

I have realized some things about myself that will ALWAYS keep me from profitability if I let them stay apart of me. So those things have to go…

I am going to do these four things that I am about to list for the next 40 days and I am going to track them here so as to have some accountability

1.Trade one pair on one time frame in the U.S. Session (EURUSD)

2.Trade ONE time that day regardless of win or loss

3.Trade One System and follow the rules to the T. No cheating

4. Call my trade and post it on this page every morning along  with the results

My good friend Matt Lacoco sent me some pages from a book yesterday that are making me think about what I am really doing; and in an effort to bring transparency to everything I do, I want to do this, I need to do this.

“It is here that you eliminate wanting and expectation. You will always gravitate toward your current dominant thought, points out Earl Nightingale. If your dominant thought is wanting, you will create more wanting. Then you will not have, you will remain in the state of want. If you stay in expectation and that is your primary focus, you will create even more expectation. You set the target, act, and the allow the results to follow.”

-InVINCEable Principles-

The whole point of this is to live out what I believe. I see many principles and traits that I believe will make me a successful trader over time. I can no longer try to steal the gap, and I can no longer play the student and be the thief. Change is difficult, but necessary.

I am going to stop over trading, learn discipline and accountability, and this is where it will all play out.

6.13.13: Some thoughts as I begin this. Why? Because I want  to be on the plateau mentally. To be on the plateau means that accumulation is not the goal. Accumulation comes naturally as I move across the plateau, but it can not be the goal at the outset. A good friend gave me the advice once to “put away the shotgun, and get out the rifle”. In essence he is saying don’t do anything with the attitude that if I take a shot, I have a lot of chances to hit my target. Be very intentional, fiercely intentional about everything. Be patient for the entry, be purposeful about the stop loss, and be expectant of the target. The real goal of mastery is to weed out the misguided motivations and be purely process driven. I am attempting to leave behind all of the toxic motivations I have with trading, a detox of sorts. Reminds me of this clip from The Last Samurai (this is one of my favorite trading movies). You don’t get to see it here but he is forced to get the toxins out of his body because they will not allow him to drink alcohol. After that period, he wakes up and sees the world differently. He is impressed and deeply moved by the discipline and attention to detail and this is not a perception change but a character change. Holding to a set of values becomes more important than the outcome of wild, thoughtless actions.


Sometimes we have to just not do the things that are damaging to us. Just stop it. And then we will find what we have really been looking for. Sacrifice leads to discipline and discipline leads to fulfillment
This is the essence of the plateau…

I hope that you will follow this journey and email me or find me on twitter and tell me about your experiences with having to change behavior to find success

Day one of TradingLife:OwnIt

6.14.13 Short Euro 1.33166 on retest of broken trend line. stop 1.33274(-10) Profit 1.322869+30. So strategy for this trade is to move to break even after 10 pips. (Need to expound on my strategy) moved to break even. stopped out at break even. Trade station off for day unless testing on separate demo acct. Today’s notes: This is exactly what I wanted. I didn’t want a win today because nobody ever learned anything on the mountain top and this experience is to train, not to win. Too much anxiety still and it all stems from not having enough confidence in my entries. It also has a bunch to do with I am still wanting and not expecting. When my shoulders tense up, that is definitely not the time to be reentering trades. Its time to step back and find out why. Do I really trust my entry? If not should I have even taken it? Am I still a poor loser and am more concerned with NOT losing than making the proper trade? And now the real test begins: can I just stay away today. I didn’t lose money and probably won’t get another set up today so can I control the beast in side that needs and wants and allow tomorrow to come and be expectant of good things? Also realizing that while it was a technically legitimate trade, it was a reaction trade. It wasn’t the system I set out to trade. Patience would have presented a proper opportunity. Going to spend the weekend working on my strategy. Some thoughts that came up last night; am I trying to take every pip I want from the market, or am I trying to take every pip I need?

Pip Total:  0

TODAY’S TAKEAWAYS:

1. Be very patient and intentional about approaching the market

2. Too much second guessing and anxiety. (That is the purpose of this exercise, to kill those)

3. The first step on to the plateau is already pointing my head in the right direction. I am finding myself more concerned with did I take a step towards mastery of my system rather than look to make money. In a small way, I can say yes.

Day Two: TradingLife:OwnIt

6.17.13 So I thought I would take the next couple days to talk about three points of foundation regarding this experiment: The System I am using, The Strategy I will attempt to employee and refine, and the motivations, both of why I am doing this and the ones I look to change. Today I will talk about the system. I have thought about all of this so much over the weekend and am so excited to share it.

Here is the idea behind why I choose the system I did before I explain the system itself. Simplicity is always the key factor in choosing how I trade. I look at the charts in terms of what I call “decision points”. Any one who follows me on twitter has seen me post plateau charts that have two trend lines and a pivot and I always say that the pair is coming to a “decision point”. I want to identify the points in price where it is forced to make a decision and when it does, the move is powerful and profitable. So for this experiment, I took the Bombora system and I stripped it down. The big “variable” in Bombora is the moving averages and I have been working with a set that, through testing, I have found stand on their own. These moving averages give me the decision point I am looking for. So that is what I am doing. Two moving averages on a five minute chart and a session box around the U.S. Session. here is what my chart looks like:

Chart Example

So why so simple? Because for this journey, I wanted as few rules as possible, and I have two rules for my entry: Green box, first line cross of the session on a closing basis. And the reason I have made it so simple is the less rules I have to follow, the less I can break. I want this experience to be as pure as possible. If I am trying to do this and I have to match 3 lower indicators with price action, and then figure out if it broke out of it’s triangle pattern all at the same time, I can guarantee you I will break the rules and then proceed to destroy my trading  life. Simple. Minimal. Make sure you have a system that the rules are clearly defined and easily followed.

I got this question this morning “do you think that the 5 min chart is limiting? Should I set bigger stops so as not to get stopped out and have to be done for the day?” It’s the perfect question that we all ask and the only way to answer it is through my current strategy (for more on strategy, I will be posting this week on it and also see the “system vs. strategy” post where I started this whole idea). My strategy right now IS to limit myself. I may sit on a 10 pip plateau for this entire experiment. But what the Yak Hunter @mattlacoco and I have discussed is that the more we limit ourselves, the less chances we have to make mistakes.

I want this to be the most purposeful task I have ever set out to accomplish. To limit myself is freedom. To be in control over the emotions of want and excess is pure freedom. It is so counter to what we believe sometimes but it’s truth.

Can this system make me pips? Heck yes! It is a valid entry point into the market. But I am making these days less about having the opportunity to accumulate my account, and more about accumulating my ability.

Update: Trade initiated Sell EURUSD 5m 1.33341 Stop 1.33412 Profit 1.33136. Stop always has to go above the moving average convergence point (also a recross of the MA’s would end the trade as well.) It’s amazing what calling your trades does, even following the rules, it makes it more stressful. rangy kind of day so we will see but I am forced to take that first cross by my rules so here we go.

Snagit screen capture
http://screencast.com/t/zDZvpE3vHmQ

And before I could finish writing, stop out at 10.

Takeaways: Stops happen! Now I learn but not the kind of learning that I tell myself that I knew it was a terrible market and I should have stayed out. It’s the kind of learning that allows me to be ok with one trade, one stop out. Live in expectation and not wanting. I expect tomorrow to be better. I have seen it a hundred times. Also, look at the wins today. I was patient to wait for my systems entry, let the stop do its job, and will wait for my chance tomorrow. Again, this isn’t about proving that I can make a ton of money. This is about proving I can face the adversity, and do it in a way that I can be proud of. That’s it for today…

TradingLife:OwnIt

Day Three of the Trading Experiment

6.18.13: Fear Can’t be Defeated Through Backtesting

Happy Tuesday Everyone. Well I wish that I could say that the account has accumulated 50% over the past three days but it has not and that would defeat the purpose of this exercise I believe. Today was an 8 pip stop. See the awesome chart:

Snagit screen capture
http://screencast.com/t/9Xa08KNi

So on a day when I took my second stop in a row on this experiment, the natural thoughts have crept in: my system sucks, I can’t make money like this, this is crazy what am I doing!?

But this is the point that I must push through a couple of losses and face the monster to get to the new trading thinking. LET GO OF ALL THE OLD PRECONCEIVED NOTIONS and allow room for new thinking.

Today is titled fear can’t be defeated through backtesting because there is no test that could help get through the fear of being honest in these posts. There is no back test that could help get through the fear of an account draw down over an extended period of time. There is no back test in life that will prepare you for any kind of disappointment or challenge that presents itself.

So to put it simply, my good friend said “We outrun failure. And we decide that we just don’t ever quit. You just keep pounding on the door until your in. There isn’t any other way”

And he is right, there isn’t any other way. If you lost today, don’t fear. If you won today, don’t let your guard down. Face tomorrow the same way I am going to, with great expectations

TradingLife:OwnIt

Day Four of the Trading Experiment

6.19.13: Everything is going to be “o.k.”

I don’t know anybody that is reading this, save Matt Lacoco, so I don’t know where anyone else is in this trading journey but have you ever asked yourself this question “what if I never took another trade?” Some of you may never need to ask yourself that question. You could drop trading today, go find other employment, and take the same attitude to that job that you do with trading and be super successful. To those people, well done, and this experiment is probably not for you.

But if your like me and the opposite is usually true, keep reading.

What if I never took another trade? Would I be ok? Would I eventually find that letting go of the thing that I thought was going to change it all actually held me back from being ok today? Have you ever wondered what your motivations are? I think about mine all the time. By motivations I mean what is hidden deep inside of me that got me to this place, where I am pushing a button on a platform to see if I can properly predict what a candle is going to do so that you can make some money? Why do I push the button….

I am going to go to another level of honesty and list out my motivations because that’s ultimately what this is about and I have to so that I am honest to what I set out to do.

1. To run from other failures: Are you unhappy with your current job or situation? I have been. Are you frustrated that you made decisions poorly out of striving and knee jerk reactions to situations? I definitely am? So if I have a track record of making rash decisions that I am later unhappy with, what makes me think that finding success in trading will do ANYTHING to solve that pattern? If anything, success would confirm that pattern and be detrimental in the long term.

2. To be somebody: One of the first things Rob Booker ever told me was not to try and be the expert on a certain topic or in a certain conversation, just have the conversation because it’s a conversation worth having. So is trading something in my life that is just “worth doing” or am I trying to be somebody in it?

3. Is everything going to be “o.k.” Man this is a tough one for me. Life teaches us reactions. It just so happens that my default program is to believe things will not be ok unless I make them ok. That is the wrong foundation.

So… I am not trading at all today. I want to see that my situation will not get worse and that I didn’t “miss an opportunity” to make my situation better by not trading. I don’t want to run from the real problems by covering them up with a winning trade. I want to see that I can breath without all the things I think I need on a daily basis. Maybe I don’t get that cup of coffee I get every morning and I don’t turn on the platform and I spend the day thinking about things that make me happy, not just things that will make me happy once they are accomplished.

And today I will just believe, that through all of it, it’s going to be o.k.

TradingLife:OwnIt

**Update**

This just felt right…

Day Five of the Trading Experiment

6.20.13: The Breakthrough…

When someone say breakthrough, I automatically assume that means they have made the first million, or they won the trophy or the prize, or maybe it’s just plain and simple, I think that the problems are over and it’s on to greater things.

I would argue that the breakthrough comes well before the prize though and that is because its different than I’ve ever imagined. 

My breakthrough came from 3 separate conversations over the last 24 hours and I ultimately realized that I have been lazy and haven’t truly cared about the outcomes. Now this is a different kind of lazy than my yak hunting friend @mattlacoco. He says lazy, I say ultimately the most patient person I have ever met

My laziness is the worst of them all: expecting something or nothing. Expecting to be rewarded for really wanting to try. Pathetic.

So I started this experiment off one way but it going to take a turn here.

The one trade a day idea is breaking the habits and I will continue to pursue it. But new habits need to be developed in its place, ones without reward.

It’s my free throw example. If I want to be the best free throw shooter in the world how do I get there? Practice! Shoot 100, 1000, 10,000 free throws over a period of time. Take a minute if you will and picture yourself there. The smell of the gym and the quiet that is there as you are the only one still practicing. The feel of accomplishment that comes with every swish and the internal drive to make the next one after a miss. Does that make something stir inside of you? It does me. To put in that effort to master something is so appealing.
Keep yourself there for another minute. Pure love for the process knowing that when it really counts, you will be able to come trough for your team. Peace, calmness, understanding.

Now picture this, there is a dollar value attached to every shot. money added for a make and money subtracted on every miss.

BOOM! The whole thing is F’d up. What’s my motto? Don’t F it up!

So like I said earlier. The dynamic of this experiment is about to change.

Through next Friday at least, I am going to sit on the backtesting plateau. I am not going to be posting trade results. I am going to post my daily testing results hopefully in an excel workbook with detailed notes about what I am want to accomplish on system AND strategy. Some may find this boring, for that I apologize, but this is a journey to trading peace, not trading highs.

Breakthroughs are different than we think. Sometimes we need to start fresh, gain confidence, and only then, go win the game

TradingLife:OwnIt

Trading Experiment Day 6

6.21.13: Testing: Robot vs. Discretionary

The greatest part of doing this experiment is everything I am learning, realizing, and putting in to practice. And the worst part is that who ever reads this gets to see all of my mistakes…

I sat down last night with the intent to get 100 test trades complete while just observing past market behavior. Here are a couple of pictures of my charts that I was looking at

Snagit screen capture
http://screencast.com/t/nsohl4aFl4z

Snagit screen capture
http://screencast.com/t/a4XY4HAp

So I am trying to find a way to get these moving averages to produce reliable trade signals. Not working! So I found myself getting a little frustrated. And here is where the honesty part comes in again, I have been trading something that is not fully tested and the same frustration that I have been experiencing in my trading is now coming through in my testing. Mediocre effort produces mediocre results and the only person to blame is me. But that’s why I am doing this. I knew something needed to change…

And then it hits me… THIS DOESN’T WORK. STOP BEING FRUSTRATED AND WASTING MENTAL AND PHYSICAL ENERGY AND MOVE ON!

When I created the BOMBORA robot, I tested 1000’s of trades by hand and then again on the EA and that was extremely helpful. I understand how that system works inside and out.

But here is the question I am asking today: Does testing for a robot system differ from testing for a discretionary system? I am to the point where I firmly believe that’s true. I would love to hear any thoughts on this.

And then this morning after I had been up most of the night trying to figure it all out I just stopped, and I found this gift

Snagit screen capture
http://screencast.com/t/XSfDMpbe3

A quick friday 50 off some simple trend lines after some simple analysis

So, I am taking the weekend to think about this. I have determined that my discretionary testing is much different than my robot testing. Now how to move forward?

One thing is for sure, forcing my views on the market and needing those moving averages to give me something they can’t is going to be nothing but painful.

Sometimes, we just have to allow…

Also, anyone who is reading this, thank you so much for joining me in this, commenting on twitter, and just reading what I put down here. Please don’t hesitate to reach out. I love all the thoughts and opinions.

Happy Friday and have a great weekend!

TradingLife:OwnIt

The Trading Experiment Day 7

6.24.13: Painting over Programming

Well the weekend was good to both give my brain a rest and look back on the last week and see just how much can change in 7 days if I give it the opportunity. These are my continued thoughts from day 6.

There are definitely two different ways of approaching any market and through this experiment, I am starting to see them more clearly. These approaches are discretionary trading and robotic trading and it is very very easy to get the two mixed up if I do not define my strategy from the outset of any trading session.

Robotic (Programming): This is the process of trading the same set of indicators in a predefined fashion every time the set up happens. This requires a large amount of testing before hand to develop a set of rules that work more than they don’t and then requires the ability, whether through programming or rigid discipline to enact that set of rules at every opportunity. If you test a set of rules over all sessions and then only trade one of the sessions, the testing is not quite valid.

Discretionary (Painting): Taking the time to understand the flow, feel, and direction of a market. Using different indicators and time frames to “paint the picture” of what is going on in the market that day and arm yourself with the right information to make the best decision possible, knowing full well that being right, is not the ultimate goal.

My Paintings for the Euro today

Snagit screen capture
http://screencast.com/t/irnSp90wjnTw

Snagit screen capture
http://screencast.com/t/gJaJiMZHL

Snagit screen capture
http://screencast.com/t/ZzyyVeuyf9

I like the idea of a sell of the EURUSD around 1.31700-800 if it can get back up that high. And I may just wait for it. This whole thing is about reprogramming my trading brain. Sometimes it’s just necessary to do things that seem out of our comfort zone just to see if maybe there is a different way of doing things that may work better

Right now I am just going to put the spreadsheets away and learn how to flow with the market a little bit. Learn to find a rhythm without it having to work all the time.

MY THREE KEYS TO DISCRETIONARY TRADING

1. KEEP IT SIMPLE

2. KEEP IT SMALL

3. KEEP DOWN THE LOSSES

TradingLife:OwnIt

Trading Experiment Day 8

6.25.13 Pips or Dollars?

Is this thing over yet? This is sort of turning into that train wreck situation. Anybody that’s still reading this knows the outcome, you just want to see the point of impact!

Seriously this has been a great place to outlet the daily thoughts on life and trading, even if it doesn’t always go the way I think it will. But that’s life right?

So today I want to throw out there my idea on pips or dollars, which one do I make, or which one should I focus on making? And how does it relate to mastery?

jiro-dreams-of-sushi01

Let’s go back to Jiro Dreams of Sushi, and if you haven’t watched it, please do. One of the most influential trading films I could imagine. It probably inspired this entire journey and I wrote a mini E-book a while ago and asked some of the questions I am now trying to answer. (the book is free HERE)

So if Jiro went to his sushi shop early every morning and laid out all of his ingredients and then calculated the margins on each piece of fish, would he be a master sushi chef today? If Jiro set out every day to serve 500 people because he didn’t believe that what he was making was the best around and he desired quantity over quality, would he be a master? Would he be able to charge an insane price for his meals if that was the goal? I don’t believe so. He is a master because, while his endeavor was to make money, the way he went about it was to build a firm foundation and only then would money never again be an issue.

See I firmly believe there is no dollar value on mastery. Am I a pip accumulating master, or am I swayed by the dollar amounts that each trade represents? Pips or Dollars? Pips represent a measurable form of accomplishment, dollars represent a fluid reward of that accomplishment. A master puts away all of the external pressures AND rewards of their process and focuses entirely on THE process.

As a trader pursuing the plateau, pursuing mastery, I have to let it all go. I have to! I have to leave out the pressures of family, I have to walk away from the idea that anyone will think me stupid for putting all of this up here, I have to put out of my head that I need trading to come through so that I can have a job that I enjoy.

And most of all, I have to put away the idea that trading will make me happy. This is a longer story than I have time for, but trading can’t do anything for me. It can’t make anything in my life better. The only thing I need from trading is to learn how to take pips.

Today, I am letting go of some things that have held me back, in life and in trading. And taking another step on the plateau of mastery.

TradingLife:LettingGo

Trading Experiment Day 9

6.26.13 The Most Powerful Article I Have Read in a Long Time

And POW! Just like that, everything changes.

I woke up this morning with the overwhelming feeling of “something really has to change”. Ever have those days? Like you don’t have any idea what needs to change but you know something needs to change. In the end, that’s the whole reason I’m doing this, to find what needs changed and change it.

I am realizing through this experiment that I have more weaknesses than I first set out to uncover, Laziness, desire for things to be “easy”, transfer of risk, etc etc. I seem to be battling more demons than I ever realized. Thank goodness this is a 40 day experiment!

And then I read this article. PLEASE READ BEFORE YOU CONTINUE, in fact once you read this you can stop reading my crap forever and just do THIS! It’s that good!

http://www.stevenpressfield.com/2013/06/how-hard-is-it-to-turn-pro/

I literally have nothing else to say… I am the epitome of the “resistance-addicted amateurs body”. And this experiment is maybe a bit of a ploy, a transfer of risk of sorts. If I complete this 40 days, will my chemistry be changed? Not at this pace. I need to step it up and fight harder because “he has to do it by will power alone”. Ahhhhhhhhhhhh this guy is gut punching me again and again!

There is nothing to do except put in the hard work to become a pro, and stop sitting on my ass hoping that I can make it through this.

“The act is self-initiated, self-sustained, and self-defined. You turn pro in secret. But you know. And I’ll know when I look in your eyes.”

Work hard, cut out hope, and fight until I die or change. There is my plan in a nutshell.

TradingLife:KickItsAss

6.27.13 **Traveling**

Trading Experiment Day 11

6.28.13 Back to Work!

So the experiment started out as one trade a day for 40 days, lets get back to that.

I am still going to use my original entry method, but I am adding to it. I will spend time painting charts before I make an entry so as to try and find possible price direction for that day.

So lets walk through the progression:

4hr

Snagit screen capture
http://screencast.com/t/yTCyNcOAbCbO

4 hr looks to possibly be forming another little flag  or a real bounce off of that 1.29960 support that was invisible to me until now. that is what I am trying to train my eyes to look for.

1hr

Snagit screen capture
http://screencast.com/t/GHo242lDEJpi

The one hour makes it feel a little bit more like I want to be a buyer today. Bounce off major trend line, a broken down trend line, and above the 1.3050-60 SR level.

15m

Snagit screen capture
http://screencast.com/t/rNcHPbxF2

The 15 min really tells me what I want to know. This has upside breakout potential but could hold and reverse lower. This will be the key for how I look at the day.

5m

Snagit screen capture
http://screencast.com/t/9u6Eyquzq

I trade from the 5 so this will be the trigger chart.

Analysis: Higher time frames show possible support but the 1.3060 area looks like good resistance. The 15 min shows me that the Euro is at the top of its channel which tells me that if it can hold that line, I would be a seller. And then my trigger lines.

1.3060 looks like the go word today. if its trading above, my lines may not trigger again but if it holds, I will sell the next cross down later this morning.

**UPDATE**

Here is the short I took this morning based on these paintings.

Snagit screen capture
http://screencast.com/t/ph4lluKYRyV

25 pips stop at break even. Targeting 1.2940

To get there, here are the two areas of support that need to break down. If that happens, may move PT.

Snagit screen capture
http://screencast.com/t/IVXSaExGj

This 1.2990 on the 4hr is proving difficult

Snagit screen capture
http://screencast.com/t/J1vrf3DzhwLp

and this major line on the 1 hr needs to go first.

Trading Experiment Day 12

7.1.13 Turning Pro at Daily Analysis

The ocean and trying to “catch a wave” is such a perfect picture of trading. I am going to expound on this in the next couple of days but wow. It is perfect

Back to the charts!

Fridays trade went to break even. Should have paid closer attention to support.

Today’s Paintings:

4 hour

Snagit screen capture
http://screencast.com/t/ElA3EoIsWU

The four hour has held 1.2990 very well. When it didn’t break on the last push down, makes me hesitate on a short

1 hour

Snagit screen capture
http://screencast.com/t/SfkZLKKiZ

The one hour has held the up trend very well. there is trend line on the top that would open up some upside I believe

15 min

Snagit screen capture
http://screencast.com/t/AJdXT32w

The 15 min gives more detail. It is holding this small uptrend line inside of the bigger down trend. a break in either direction I am more inclined to trade.

Snagit screen capture
http://screencast.com/t/rKdAHMq9P

This is a closer view.

5 min

Snagit screen capture
http://screencast.com/t/Pn33aOseh

With all of my higher time frame charts looking pretty well supported, I am going to wait for a cross up on these moving averages before I take a trade.

So, today is a buy day. If it happens great, if it doesn’t, well I just got another day to master chart analysis and become a pro.

TradingLife:TurnPro

**UPDATE**

Buy Initiated Stop below previous lows, Target at 1.3055 just below my resistance level. Doesn’t matter how it turns out, just enjoying the process of analysis! Its a big deal for me to not have taken that sell trade. One more step to pro…

Snagit screen capture
http://screencast.com/t/g4m1cwM8

**Stopped out for 11 pips. See you tomorrow EURUSD**

7.2.13 Charts and Monsters University

Yes, Monsters University. We took the kids to see it yesterday as Florida is a rain drenched mess right now and normal beach activity is on hold

So to the movies it was. Monsters University was a very well done flick. I enjoyed it. Possibly its because I see everything through mastery goggles these days but it was a kids movie that brought out the idea of mastery. It was great. It was this glimpse into the early lives of two monsters that are presented as professionals in the first movie. It was their journey. They started out the way we all do, really wanting to “be somebody” by being the best scarer. They beat themselves up, fight against each other and the whole world, until that path doesn’t work. Near the end of the movie Mikey, the green one eyed little monster, looks at Sulley and says something like I guess I don’t need all of this to be ok, i’m just ok with being ok. Probably totally butchered the line but you get the idea. And that is when their journey as professionals began. They start at the bottom of Monsters Inc and work to become the greatest in their field.

Like I said, I am not proud that I just dissected my kids movie to illustrate a trading/mastery idea, but its everywhere if we look for it. Its just the journey. I am posting the charts everyday and the way that I see them to start at the beginning. Just do the work every day that is necessary to learn how to trade, and before I know it, I will go from the mailroom to the CEO of my trading company.

Today’s Charts:

4 hour

Snagit screen capture
http://screencast.com/t/Yf1q5mR3LCo

Looking nicely supported and may want to try for my 1.3060-70 area

1 hour

Snagit screen capture
http://screencast.com/t/q3kLzHXIu

1 hour has 8 touches of this line. Again, until something changes, I view EU as highly supported on the higher time frames

15 min

Snagit screen capture
http://screencast.com/t/YIIRMAvLsnXC

Again, looks to be supported, maybe a bit range bound. Looks to be “pressuring” the upside but would be decidedly bearish below that trend line for me as all but the 4 hour would have broken down and then 1.2990 comes heavily into play.

5 min

Snagit screen capture
http://screencast.com/t/NFHQKzSk

So on this 5 min with my trigger lines, I am waiting for a cross up. If it breaks the higher time frame trend lines to the downside which it looks like its about to do, then reset and adjust. Markets are always fluid and the analysis we do only lasts for a moment. Don’t be afraid to reset when conditions change. Happy Tuesday

TradingLife:OwnIt

**UPDATE** 1.2990 was shattered and no buy trade ever presented itself. Will see what tomorrow brings. Enjoy the evening

Day 14 of the Trading Experiment

7.3.13

Life-of-Pi-Richard-Parker

THE LIFE OF PI

Trading Lessons Taught To Me By Richard Parker:

1. Many beliefs are easy, one true belief takes time

2. The boat is my trade station, I am Pi, and I MUST work to tame the tiger and live at peace with him.

3. Don’t kill the tiger, it is my greatest ally. He pushes me to grow and want and fight, and I will miss him when I do not need him any more.

I love this concept. This was a very well done piece on what it takes to fight our nature. I picture myself in this situation. The absolute hardest fight in being on the ocean for 227 days would be the battle against myself; boredom, hopelessness, pain, hunger, day after day with no sign of relief.

TO NOT GIVE UP, IS TO FIGHT AND TAME THE TIGER

See Richard Parker represents resistance in its finest, purest form and when we turn pro, we take all power from resistance and make it work for us. It was Pi and Richard Parker, Pi against his mortal enemy, himself. And I hate to say this but I am envious of his situation. Not that he was stranded on the ocean, that would be my ultimate worst case scenario, just that he was alone with his resistance. I have a job and kids and passions and commitments and dreams and it feels like fighting my resistance is more difficult sometimes, but ultimately, that’s all part of it i guess

Sometimes I think it would be easier to be alone with my resistance, but then the resistance would just take a different form. The absolute key for me is to treat my resistance NOT as trading or anything specific, just as purely resistance. See Pi’s was different than mine, but the story is the same:

Once I turn pro and conquer resistance, NOTHING CAN EVER STOP ME AGAIN!

EURUSD Today:

4hr

Snagit screen capture
http://screencast.com/t/tUo11bL4Nu

This chart shows me that the E/U is at a decision point. A solid break of this trend line would open up downside.

I am a buyer of a little bounce here though.

Thankful just to be able to be apart of this life today

TradingLifeOwnIt

7.4.13 Fourth of July **No Experiment**

Happy 4th of July to those who are celebrating today. Freedom is different than we some times believe. I believe it is not the freedom from want and need, but the freedom to succeed or fail and have no one stand in my way. As a trader, that is the only thing I ask for, just give me the opportunity to do what I love, get better at it, and don’t stand in the way. I will be responsible for the outcomes.

I am staying away from the charts today. Bank holidays provide low liquidity and with NFP today, I don’t want to get blindsided in any way.

The only charts I looked at today were my Bombora charts that the robot is trading on the VPS.

Bombora was created to take the biggest chunks of the markets and build accounts in a loose “investment” style. It is not a scalping system. It was developed to find the points of natural continuation in a trend, at least as I see them.

Here are the charts of open trades at the moment:

This is a 15 min EURUSD chart with the Bombora system on it.

Snagit screen capture
http://screencast.com/t/gybfHSVYs

I taught some old indicators new tricks. The basis of the whole system is that big red or blue line, the Bombora Wave. Its as simple as when its red, it sells the market, and when its blue, it buys. Now there are 3 other indicators that help determine the best point to enter that trend but that’s it.

It trades the waves!

This is the current EURJPY 1 min trade. The entry is not visible on this chart but is works exactly the same on the 1 min that it does on the 15 min. Stop has been moved to +80 pips (Testing underway thanks to @lavertrade)

Snagit screen capture
http://screencast.com/t/ktSnTblccdz

And I have recently put it on the GBPUSD 15m and it took a break even this morning.

Snagit screen capture
http://screencast.com/t/EOB7DbyBN

Enjoy your day everyone. Thanks for reading

To find out more information on Bombora, pleas visit:

Click Here to Learn How to Trade the Bombora Wave
Click Here to Learn How to Trade the Bombora Wave

7.5.13 **NO Post** Day off 

7.8.13 Trading Experiment Day 15: Resistance Point

Resistance Point
Resistance Point

The night before I went on vacation I read “Turning Pro” by Steven Pressfield. You all know that because I haven’t been able to stop talking about it. That was a Wednesday night and we left for the beach on Thursday morning at 4 am. All of these thoughts of my amateur life were rolling around inside of my head and this constant nag that I really, really wanted to turn pro.

So Friday morning, I woke up and decided that I needed to burn the toxic thinking out of my system. So I did what I hated: I went for a run. Now if you knew me, I am an old football player and a current hockey player. Give me a lot of short bursts and then let me have a break! I am not a runner….

So I went to the beach in the dark on Friday morning to take a run and this is the entrance from the street to the beach and I just stopped when I got up to it and took in the moment.

Things were changing. 

Not my circumstances. Everything in my life was exactly the same as it had been for a long time. Frustration and resistance all around me. But standing there, on the edge the old life and the new, this line had to be crossed. I had to look resistance in the eye and and tell it to go to hell. I’m not doing it any longer.

Resistance all over my life. My job, my trading, my family life. ALL OF IT! None of that old resistance was welcome in my life any longer. See trading is just a mirror. If I am willing to beat resistance in other areas of my life, beating the trading resistance will be less complicated. It’s almost like I have to find “success” somewhere else and know how to win before I can find success at trading.

So today, I am back to real life, but it feels different. And I know that as I change my mind, only then will everything else follow.

Good day traders,

TELL RESISTANCE TO GO TO HELL, AND GO DO SOMETHING TODAY THAT YOU HAVE BEEN PUTTING OFF

EURUSD today

Snagit screen capture
http://screencast.com/t/2pTvCMWHqlk

4hr bounced exactly where I thought it would. I got ten pips off of the bounce last night before going to sleep.

TradingLife:ResistanceisFutile

7.9.13 Trading Experiment Day 16 And then I woke up:

Amatuer pro 1

FROM STEVEN PRESSFIELD’S “TURNING PRO”

I AM A DISTRACTED AMATEUR…

AND I NEED TO GO TO WORK.

Thanks for the journey everyone, see you on the other side

Just Remember: F*%# The Marshmallows…

TradingLife:OwnIt

7.10.13 Trading Experiment Day 17 What do I believe?

Belief

If only the hardest part of trading were actually the charts…

And not what I believe…

Then things would be so much easier…

I think there are things that haunt us all, and for all they are different. That’s not a “problem” or up for discussion. Me, you, everyone I have ever talked to has something that stands in the way of what they want to accomplish or who they want to be. Pressfield calls it resistance. Faith calls it an enemy of our souls. My good friend Matt Lacoco calls them dominant thoughts. I call them tormentors. Its all the same.

Try this little test. Think about this morning, when you first rolled out of bed, no before you took your head off the pillow, are you aware of what you were thinking about? Am I aware of the dominant thoughts that shape my day from the first second? It is rare to wake thinking the world will be good to us today, usually that is a decision to be made.

What are my dominant thoughts? Am I thinking about how no matter what, things are good!? Am I thinking about how unless my trading turns out good today, I am a total failure because that is the only thing I have ever believed.

What are my motivations? Am I trying to prove something in trading or by being a good trader? Do I need it to make up for some other part of my life? These are all trading killers.

Trading is a job, it has no meaning. To try and attribute meaning to trading performance will kill it… fast.

Thanks to @spacepip for sharing this video with me. It has a very thought provoking part in it that compares a mind to a field. He says that they are similar because whatever I plant in a field will grow, whether good or bad. The field is INDIFFERENT to what I plant because the fields job is to produce. 

IT IS UP TO ME WHAT I PLANT!

Today is about ripping out the weeds and the plants that I have let grow that shouldn’t be there. Most are bigger in my head then they really are in the field. It’s perception. And then tomorrow morning I will have to do the same thing. It will never end.

And after I kick all those old friends out, I will allow the good to come in every day.

The battle for my trading, for Matt’s trading, for your trading,  is not fought on the charts! It is fought in our minds, even before we look at the first chart or have that first cup of coffee for the day. Win the battle of the mind, and all things are possible.

The Bible says, “All things are possible to those who believe”

Can we believe?

TradingLife:OwnIt

7.11.13 Trading Experiment Day 18

Ordinary

I had a conversation the other day with a co-worker about her son’s upcoming wedding. She said something that struck me, she said “the bride to be kept saying how it was all so surreal” Surreal. Out of the ordinary, dream like, over romanticized, SUSCEPTIBLE TO DEFEAT. What happens when I live in the surreal? What happens when trading is in the surreal? It can be popped, like a dream bubble in a cartoon and there is a harsh snap back to reality. If I want to live in the surreal as a trader, I open myself up to defeat. What happens when a trade goes wrong, can I handle the REAL? If I trade in the surreal, reality will be very, very painful.

What if I was just able to take trading to the realm of ORDINARY? 

Lacoco and I had a cigar the other day and we talked about what it meant to “be a trader”. If you could hear me right now, I am kind of coughing and saying “bulls*$# at the same time because what does it mean?? Is it a romanticized version of a J.O.B? Do I think its any different than selling cars or owning a cleaning business? If I truly do, then I am in the surreal and I am toast. In fact, I can name ten better ways to make money with out taking a breath. I have actually come to the point where I loathe trading. I have lived with trading as this goal, this want, this blaaaaaaaaaaaaaaah place for so long. I hate trading. I want a job!!! Isn’t that funny, I leave my business to pursue this trading thing and in the end, I just want a job. So how do I start to make trading a job and not a fantasy?

I always divert back to the best trader I know. Matt says he is not a trader, he uses trading to make money. To be a trader is surreal, fast cars, stacks of cash, unneeded freedom. But Matt Lacoco is an ordinary guy who just beats the market. He needs no fanfare or pats on the back to just go make money from the markets. He just does his job and lets the extraordinary or the surreal come from somewhere else in his life.

I need to take my trading to the realm of the ordinary where wins do not increase the euphoria of the surreal and the losses do not sting with more reality than one should handle. 

I am going to bare my soul here for a second so please bear with me. For the first time in my life, I want to chase ordinary. I have run so hard and so fast from being “ordinary” to try and be somebody, be a “trader” be this, be that. I am more afraid of being unsuccessful than willing to just be cool with being poor trader who, through patience and perseverance, gets better with time. That is me being controlled by the ego. I am done running because the funny thing is, the farther I try to run, the closer I get to being less than ordinary.

I give up. In the best, most meaningful way possible, I GIVE UP.

See you tomorrow. I know today something good will happen if I allow it to…

TradingLife:GivinguptheSurreal

7.12.13 Trading Experiment Day 19: Discipline

selfcontrol

A great friend told me three things last night when I told him I was in the battle of my life with discipline:

1. Discipline is simply Self Control- In trading, can I control myself to do what I shouldn’t

2.No Wasted Motion- Don’t obsess, don’t try to steal

3. Blessings or Curses, you choose- I can either choose to be disciplined and be blessed or choose the old ways and have nothing

He is not a trader, and he gave me the greatest trading advice I could ever imagine. 15 seconds and it blew my mind.

But that’s how this whole thing works right? I am not sure the mind is a zero sum game but I am sure it is a field, and weeds must be pulled to make room for new crops to grow. The field is agnostic, it only produces, we choose what to plant. So yesterday, I pulled some weeds. I put down the desire for the surreal and the need to be somebody, and just like I thought, good came in because it was allowed to, not in the form of a trade, but something much much better:

I was able to plant the seeds of self control and discipline in the place of those weeds!

Now for some trading and some charts!

I am kind of kind of neutral on the EURUSD right now. Its right in the middle of this huge triangle pattern on the 4hr

Snagit screen capture
http://screencast.com/t/8lmrntubHj

Here is the important chart for the day for me. I want to initiate a short term long on the bottom of this box if this candle can hold.

Snagit screen capture
http://screencast.com/t/P8mV3gt5H1P

Will update later today

**UPDATE**

+20 off the bottom of the box

Snagit screen capture
http://screencast.com/t/bO3J1URES

Today…. Is a GREAT DAY! Hope yours is too!

TradingLife:ControlIt

7.15.13 TRADING EXPERIMENT DAY 20: GETTING TO WORK

Well, I guess it’s time to put it all to work. This experiment is specifically for finding out if a guy like me, who has been an inconsistent, mostly bad trader can, in 40 days, change the way he thinks and by doing that, change the way he trades. I have spent the first half “figuring out” my bad habits, bad thinking, and hard wired reactions. Now it’s time to see if those things can change by replacing them with positive thinking and actions.

I started this out four weeks ago thinking I could trade that moving average cross once a day. That didn’t happen. It didn’t work. And the funny thing is, I was having problems doing it because I knew it didn’t work but I wasn’t willing to admit it. I still wanted to be a “robotic” trader without being able to perform like a robot. There is such a big difference!

One of the greatest things I have learned:

So much time is spent asking traders to trade without emotion, to trade like a robot and just work the system. IF YOU WANT TO TRADE LIKE A ROBOT, CREATE A ROBOT! IT WILL BE A LOT LESS STRESSFUL!

If not, then don’t even attempt to kill Richard Parker, Pi’s “self” in Life with Pi. Learn to live with the Tiger, he is your ally! Control your emotions; the want for money, the desire for the surreal, and the want to be somebody, and then learn how to use who you are and what you know to trade the markets. If you don’t know something, don’t try and hide it with an indicator, learn it. If you want to trade every set up of an indicator, create a robot. Just find peace in it and be honest about what you know, what you can do, and where you want to go.

So, I spent some time this weekend pursuing a theory I have been burying in the back of my head on price action. And I am finding that just being honest about what I know and what I want to know, changes everything.

4hr EURUSD chart

Snagit screen capture
http://screencast.com/t/RoDvYJSae

bottom level at 1.3015 seems to be supporting in the short term. Little descending trend line on top. I am sort of “4hr agnostic” at this point. I am using 4hr charts purely to identify longer term trends.

1hr

Snagit screen capture
http://screencast.com/t/RoDvYJSae

one hour charts are now for price action tells. Like I said, I have found price action rectangles to be my favorite “indicator” I have ever used. It is what I have been looking for from the market on a discretionary basis. On this one hour, price rose sharply, and then it seems to always rest. Sometimes hours, sometimes days. There is a lot of money to be made both in the resting periods and the breakout periods. one hr eurusd is “in the box” and I will be looking to buy the bottom edge. I am undecided as to whether to sell the top edge or just trade with the trend. Dunno yet.

15 min

Snagit screen capture
http://screencast.com/t/jvCV5r38TlL

and the 15 min is where I will make trade decisions. Same box as the 1hr but more detail. buyers have come in 3 times at the bottom of the box. There is also sellers coming in earlier and earlier as shown by the descending trend line.

**Trade Idea for Today**

Will be a seller on a break and retest of the bottom side of this box on a 15 min basis. I may dip my toes on the buy side if that trend line on top is broken.

Its time to get to trading. I didn’t go through hell for the last 20 days and let everybody watch not to come out on the other side a much better trader. Lets get some work done!

TradingLife:GettingWorkDone

**UPDATE**

Super small long position on the trend line break and retest. What a boring day so keeping risk super low.

Snagit screen capture
http://screencast.com/t/EJEj9Oqvc

stop below the TL and will let it work to the top of the box if it so desires.

**UPDATE 2**

The problem with today’s position: poorly drawn box; reliance on a trend line that doesn’t matter.

Here is the redrawn box:

Snagit screen capture
http://screencast.com/t/n7BBQ2Cy1ZzL

Forget the trend lines!! Just trade the box. Its so simple. Don’t complicate it. buy at the bottom, sell at the top. With the trend line mess I bought at the top of the box. Draw box properly; draw more than one box if necessary. Stalk the trade from all angles.

Lesson learned

7.16.13 Trading Experiment Day 21: Setting Goals

7-16-2013 12-40-47 PM

I made a folder today. I made some decisions about what my goals are. To this point, my goals have just been dreams. They required the benevolence of either God or man, and I transferred risk and responsibility all of the time, and no action taken by me was important enough to change it. “Make a choice, like you just decide what it’s gonna be, who your gonna be, how your gonna do it. Just decide.”

Today though… things are changing today. I can feel it in my soul. Discipline, Self Control, Decisions Made 

The dream has never been to be a trader, as much as I always thought it was. Trading can’t be a dream! Dreams are saved for the surreal and fantastic. Trading is bars and numbers. zzzzzzzzzzzzzzzzzzzzzzz. So why do it?

The Dream is in here. The life I want is in here. And I have no pictures of charts in there… 

Folder

This folder contains the broad strokes of what I want out of life. My REAL goals.

And now being right and being a trader and being somebody can all fade away…

I can just trade because I want this, whats in that folder, and it will take time and effort, but now that I know what I am aiming at, I can hit it.

And Trading is just the vehicle to get there.

The action today was underwhelming again. I made 15 pips on a couple of trades today.

TradingLife:OwnIt

 7.17.13 Trading Experiment Day 22: Passion for the Process

Process=Habit

7-17-2013 1-59-04 PM

This experiment will probably be read by next to no one by the time it’s done, but for me, it is a painstaking and crazy important process. The type of change that I needed had very little to do with trading. My thinking needed so much more work than even I knew when I started or maybe even realize right now. It’s sort of that moment that you face yourself in the mirror and realize that all of the things that haven’t worked out are no one’s fault but your own. I don’t need to learn more, I don’t need to create another system, and I don’t need another book.

I HAVE TO TAKE RESPONSIBILITY

Trading is a process. Process is just habits, good or bad. I am retraining my habits and in turn my processes. In trading, how good am I at determining a process and beating the ever loving crap out of it with discipline? In other areas of life, how good have I been at developing good habits and processes? I have been less than good… I have been amateur or immature, which ever suites it better.

PUT AWAY THE MIND SET OF ACCUMULATION LONG ENOUGH TO DETERMINE A PROCESS, AND THEN BEAT THAT PROCESS TO DEATH WITH STRICT DISCIPLINE

Think of it this way. If my trading process is crap. If I have not defined a way to enter and exit the market and a money management strategy and a risk management strategy, but I am very very disciplined to get up every morning and execute on that half baked garbage, then I will still produce half baked garbage, no matter the level of discipline. Add discipline to a crappy process and you will still end up with crap.

7-17-2013 2-06-30 PM

So here is what I am going to do. I am going to create a drop box and I am going to upload screenshots of the charts and notes on the trades that I look at over the next 18 trading days. I will put a new link to that drop box up every day in the post. I am going to load 100 historical chart pictures every day for the rest of the experiment. I want to take another drastic step towards defining my process. I will have  1800 chart examples in a folder when this is done then. It is said 10,000 hours makes one a professional. This will give me a start.

TradingLife:DefinetheProcess

7.18.13 Trading Experiment Day 23: Discipline is NOT Perfectionism

110112-02-500x333
Really? Just to hang a picture!!

I was in the middle of my first 100 trade pictures and that still small voice inside of me was saying, this is good, but you are still just a little off course.  I have learned to listen to that voice a little more these days. I thought the picture above represented my problem very well. Perfectionism. It’s not discipline, its obsessive. It’s like this type A have to be right and have everything in my life turn out the way I want it to. It’s like being an adult spoiled brat! Seriously I’m not proud of it but it’s kind of true. I am an only child… and it shows.

IS THIS HOW I AM TRADING??  MORE IMPORTANTLY, IS THIS HOW I AM LIVING??

What am I actually looking for from these pictures? Am I trying to prove that I can see a lot of cool things in the past? can i draw lines where they are supposed to be after the fact? What am I really trying to accomplish? Do I need a chart to react perfectly? Do I need my wife and kids to react perfectly? Why do I expect so much perfection out of a world that I give mostly imperfection back to? I am taking perfection to my trading. I want tight stops so that the trade can be perfect. I want unlimited account appreciation because then it never has to be imperfect. What a sad way to live! Life, like trading will always be imperfect. Accept it. Embrace Richard Parker! If life were perfect Pi would have been trapped with I don’t know a dog or something nice. Embrace the imperfect! Nurture it because that is where greatness lives.

I want to define my set up, my process, and THEN take 1800 pictures of that set up so that I can have new visual keys for that set up. I know that when I built Bombora I watched thousands of trades. I know what the chart looks like. I can’t predict price but if you told me sit and trade it today, I would know what it “looks like”.

I can not start out with the only acceptable end being perfection, in trading or in life. It’s ok to lose, it’s not ok to quit. Life and trading are parallels, mirrors of sorts.

If I let go of perfection then the markets can act like they want to and my kids can too and on and on and on. Put it down! I am going to get hit by life or the market, don’t expect anything else! Life is going to be difficult sometimes. Don’t control, allow… I want to allow those around me to be themselves without me having to have my way. I want the markets to do what they do because if they went in a straight line, it wouldn’t be a challenge and everyone can conquer an easy game.

If you look on yesterdays post there is a comment from Cameron. Its says” I am enjoying your posts! Although enjoying you struggle with your own truths is probably not the right thing to say!” That’s what this blog really is. He nailed it. I am struggling with my truths, and I am doing it in plain view if anyone who will watch. It was just trading that brought me here. And that is why it is hard to deal with charts right now and post trades and blah blah blah. There is so much more to life. I want to breath it in finally. Trading does not bring life. If I was the perfect trader tomorrow and had a billion dollars and and and DOES IT SOLVE THE PROBLEM?? NOOOOOO. Something else will always be imperfect and I will waste my life chasing the divine, when the divine exists with me today in my wife’s eyes and my kids hugs, good friends, a great cigar, golden leaves on an aspen tree in the fall, and a nice glass of wine.

Life is a redemption story not a perfection story. 

I have unknowingly wanted this blog to be my path to perfection. “Can I use this forum to make the changes I couldn’t make before and enter the realm of the idealized, the perfect, the surreal?” “Can I come out on the other side perfect? Knowing how to make money and be dun dun dunnnnnnnnnnn a trader!….” crickets and snoring… who really gives a damn. Trading is so simple! It’s simply direction. I will allow it to be that.

There is this weight and stress lifting off my shoulders as I write this. I may be carrying on a bit but it is bringing freedom, and I am going to allow it.

If I had not set out to do those pictures, I would not be here. I wouldn’t recognize what is holding me back. I am still going to do 1800 pics,  now I know what I am doing though and I will just have to put in some work over the weekend.

TradingLife:Isn’tPerfect

7.19.13 Trading Experiment Day 24: Leaving Perfection Behind

The-Imperfect-is-our-Paradise

Wow. Freedom is in the imperfect. It truly is paradise.

I am basking in the glow of this new found way of looking at the world today. I have a ton of charts to share on Monday, but today isn’t about trading.

Today is about freedom.

I am just putting in one of my favorite songs for you to enjoy while you think about what you have freedom from today. What have you been fighting for? What has been holding you back? It may be different than you think, but it can be conquered…

I promise.

It’s victorious and yet requires contemplation. It’s perfect for today.

TradingLife:Freedom

7.22.13  Trading Experiment Day 25: Learning How to Trade the Imperfect

Square peg, round hole
MY TRADING IDEAS UP TO THIS POINT: SQUARE PEG, ROUND HOLE….

Striving for perfection in trading is a lonely place. It’s like falling down the rabbit hole in Alice in Wonderland and getting to a place where nothing makes sense, those who are already there look at you funny because they know you are trying to accomplish the impossible,  and there is no way out…. Except through.

And then I found it. A secret door in the belly of that amateur fantasy land in the form of a self imposed challenge: Post 1,800 chart pictures. Dive in and wallow in the depth of your pursuit of perfection. (What’s the name of that Will Smith movie? Pursuit of Perfection? no wait…. Pursuit of Happiness. That’s right)

Here is the problem, what exactly was I trying to accomplish? Prove to myself or somebody else watching that I should be able to trade because I am really smart and know a lot and because I know so much it should be a fore gone conclusion that I am a trader and can make money from the markets and because I am so smart and am a trader, I should be different than everyone else and never have to face loss again or problems or account draw down…..

(here is where I take a deep breath…. ahhhhhhhhhhhhhhhhhhhhhh)

And then it all stopped.

GREATNESS IS NOT ONLY IN THE IMPERFECT, IT IS ONLY POSSIBLE IN THE IMPERFECT

and

THE AMATEUR LOOKS FOR PERFECTION, THE PROFESSIONAL KNOWS GREATNESS ONLY EXISTS IN THE IMPERFECT

So what did that do for my trading?

While I was down the rabbit hole searching for the Cheshire Cat to tell me how to be the most perfect trader that never had to experience pain or loss again, I ignored the greatness right in front of my nose. I ignored the simplicity of greatness. So I spent time this weekend, 15 minute chunks to be specific, revisiting some of the things I have already done and tossed to the garbage bin because they didn’t work exactly how I wanted them to. I opened up some stochastic, Bollinger Band, and MACD charts that I had worked with and just spent time accepting them instead of trying to perfect them.

And the results from that freedom are incredible. It is literally like someone flipped a light switch on my charts, like I was trying so hard to squint at them in a dark room and would get so wrapped up in the fact that I couldn’t see what I wanted to see. And then the light was flipped on and I stopped squinting and seeing small pictures and straining for details. I can just see full shapes and lines and patterns, and I can see rules that make sense and that are very easy to follow because they are well defined.

The key take away is this:

WHAT YOU NEED, YOU ALREADY HAVE. IT IS THERE ON THE CHART.

There is no magic, only three things:

1. Define your process

2. Add discipline to that process

3. Find your greatness in the imperfect

Snagit screen capture
http://screencast.com/t/4Ctbq72MEC

TradingLife:EmbracetheImperfect

7.23.13 Trading Experiment Day 26: It Just Happens Now

This is a super weird feeling to be honest….

I really have nothing left to say. I am just… doing it now.

Its like this anti climactic moment when everything I have been grasping for finally happens and all the cards fall into place, not because I accomplished anything new, but just because I let go… And now I just trade. I don’t have MT4 on my phone. When not purposefully trading, I don’t look. Guess what! Trades still present themselves the next day! Like over night it all came together and I have the three things I knew I was missing: Process, Discipline, Strategy. More on that later.

So now I am just going to talk about trading until I come up with something better to say in the future.

Stats for Sunday, Monday, and Tuesday

Sunday: +11 pips

Monday: +14 pips

Tuesday: +55 pips

Losses: 3

Wins:9

Here is one of  today’s charts

7-23-2013 Trade

It’s just simple now… I don’t mean that like there isn’t stress or loss. I just mean that like there isn’t anything attached to it.

WHAT I HAVE NOW

1. A PROCESS: I know exactly what I am looking for every day and I trade only that signal

2. DISCIPLINE: I now know how to stop myself from taking dumb trades outside of my system. I may not have had my process before but at least I was able to stop myself from taking bad trades. I learned how to tell myself “no” “bad human”

3. A STRATEGY: I have a set lot size that has increases built in for milestone account numbers. I have stops and profit targets that add up to a meaningful outcome at the end of the month if I follow my rules.

Dude… Freedom is awesome!

TradingLife:OwnIt

7.24.13 Trading Experiment Day 27: Misguided Expectations

Self-Confidence

Ok this one could be a little tough for me but I have to be honest again

I have to be honest about my old expectations of trading

When I started out, I wanted trading to make me somebody it couldn’t

MAKE ME SOMEBODY IT COULDN’T: I viewed the world from one perspective, namely I wasn’t worth anything in it and I needed an outside force; God, another person; a job, to “verify” or “confirm” my existence. What I was worth, how I viewed myself was through everyone else’s eyes. I wanted trading to confirm my existence. Sounds weird and terrible but there it is. The money I could make, the “I am doing something that I find important and if I am good at it I will be important” attitude, and the idea that people would view me differently like successful or… something. Not even sure what. Validation maybe. I think we all look for it somewhere. I think we all want to know that there is a purpose or a meaning to our time in the world… It is just a poor decision to try and find it in trading, or any other pursuit. Let me me see if I can take you into the inner conversation. Hold on tight…

I picture myself opening the charts in the morning. I check the inner voice. The conversation goes one of two ways

The market asks “what do you think your worth today?” me “I don’t know, you tell me. Give me pips and I will measure my worth” The market proceeds to spit me out with losses.

OR

The market asks “what do you think your worth today?” me “I already have my worth. You can’t ask me that question so I am just going to take my 15 pips and leave. You have nothing to say about it” And the market leaves you alone and moves on the its next unsuspecting  participant to steal from

I CAN LOOK FOR MEANING FROM TRADING, WHEN ALL THE WHILE TRADING IS WAITING FOR ME TO BRING MY MEANING TO IT

Let me explain that. No matter what you are pursuing, trading, art, writing, whatever, bring your meaning to that pursuit. Know deep down inside that you can offer something to your pursuit, not that you need so much from it that it can’t give. If I approach trading every day from the perspective of “I need you to give me something. I need you to do what I say when I say and I need the outcome to be good so I can feel good about it”, then I will always be disappointed. Needing to take means I start from a place of lack, and I need to be filled.

But…

If I approach the pursuit from a place of fullness and not lacking anything, then I am free to approach the pursuit for the pursuits sake. Mastery in short. Pursue the process for the sake of the process.

Don’t get me wrong. I am not saying I have to be rich to approach the markets correctly. I am not saying I need to be full of money to get money. We all do this for the sake of adding money to our accounts. What I am saying is that no matter how much I think I don’t have, or how much I know I need to make, or any other need or want I may have, I need to leave it at the door step.

Approach the markets without need, and you will have no need when the day is over.

TradingLife:KnowYourWorth

7.25.13 **No Post** Have to add another day to the experiment… CRAP!!

7.26.13 Trading Experiment Day 28: Managing Expectations

Start

Two areas of my life that the starting line is most difficult:

Trading

&

Working Out

Starting new things is tough. There is excitement and anticipation for big results and good outcomes. Adrenaline is pumping and just the rush of changing things can be intoxicating. All I can see is how good it will be. All I can focus on is how good I am going to look or how much money I am going to make. In the story of the tortoise and the hare, I and the hare. Jumping at the starting line with my sweat band pulled down to my eyes and my old school Converse shoes on. Ready to Run!

The starting point is great. Excitement, joy, promise, and hope. I can think of many things that I started and didn’t finish for any number of reasons. Some important and some not.

Trading and my work out routine go hand in hand for me, at least how I approach them and think about them. I know I want to do both of them. I know both of them are super beneficial for me. I know that it takes discipline and perseverance just to make it past the starting line in either of them. I know that at the finish line of both of them is a supreme sense of accomplishment.

But I’m still at the starting line!

There are only 2 things I HAVE TO DO at the starting line:

1. Take the first step, make the decision- Get out of bed early enough to get to the gym. Set my rules for trading. Just set the rules and then take one trade. DO NOT expect to do anything other than follow the rules. This is not time to think about the finish line. It is so far off in the distance you would die of exhaustion on the spot if you had to exert enough energy in your mind in that moment. There are hours of running ahead. There are hours of lifting weights and doing push ups. There are days and years of sitting at your trade station. Don’t try and compress any of that time into today. Its the most important day because it’s the day you “start” but it’s just another day. There will be many between here and the finish line. Don’t compress them.

2. Manage the Expectations- Just don’t think about the result, think about the trade. Don’t think about how strong you will be in 60 days. All of those workout videos I see advertised on TV talking about 90 day work outs or 30 day or what ever. It immediately focuses attention on the wrong thing. “oh its only 90 days. whatever I can do that.” you have already finished something in your head that hasn’t even begun yet. And I guarantee that when day 20 rolls around, the next 70 days will feel like a freaking eternity because the expectation at the beginning was, “that is not that much” or “I can see the end already” Manage the expectations immediately, for that day. None of the other days matter. None of the other trades matter.

Just this one

Don’t get caught flat footed at the starting line day dreaming about the finish line. Just take the step, make the trade. It’s the only one that matters.

TradingLife:ExpectGreatness

7.29.13 Trading Experiment Day 29: Accountability in Trading

do-what-you-said-you-would

Accountability in our lives takes two forms:

Internal (Like from our own mind, conscious, thinking)

External (from our spouse, boss, bank)

I bet if I asked 100 people who trade which one they think is more important to have as a trader, at least 90 would say internal. As traders we NEED that ability to be responsible for our own decisions. I need to have that thing, that movement in my gut when I make a wrong decision to own it quickly and move on and to learn from it and not allow myself to make the same mistake again.

TRADING REQUIRES THAT I FOLLOW RULES, EVEN WHEN NO ONE IS LOOKING

When I place a trade, what are my “decision making stop losses”? What stops me externally from making a bad decision on a trade to not follow my rules? My broker doesn’t give a damn, they actually encourage the foolish behavior. There is really nobody else. I am my own boss. (There are times, unfortunately, I still feel like I’m 12 years old telling someone “your not the boss of me” all the while the “boss” which is the market, punishes me like a boss.) The responsibility is mine. And so for many of us, we make the mistake, trade outside our rules or at 2:45 right before roll over or whatever your drink of choice is, and then we get the daily report, delete it from the inbox, and allow the one time during the day where we could face ourselves to be thrown out. We walk away from accountability, and say, oh well, I guess I will try to be better tomorrow…

Tomorrow?! It’s already over, you just don’t realize it…

This experiment has caused me to form two new beliefs in the late innings. They are kind of the same but two different ways to say it:

1. Amateurs sway with the winds of freedom, pro’s build the structure of accountability (maybe externally first but only as an exercise to strengthen the internal)

2. Little boys believe that they should never be told they don’t have the ability to make their own decisions, men grow stronger with every decision made that they must answer for

This is the harsh reality I had to deal with. Is it more important for me to have autonomy, or is it more important to be successful? Think about it. Maybe nobody else struggles with this. I don’t know

I now firmly believe that this little thing, this word, accountability, will be the game changer for me as a trader. I must answer for my trading decisions, first externally, only to learn to account for my decisions internally. See gratification doesn’t come from the money made from trading for me, gratification comes from KNOWING that I have conquered myself and that I am internally accountable for my decisions, basically that I am in full control of my “self”. That’s when I actually win.

I took two concrete steps over the weekend to make myself accountable every day for every trade. It is the most helpful thing I have ever done. This is another one of those moments, I can feel the whole thing changing again… and I love it.

TradingLIfe:BeAccountableforIt

7.30.13 Trading Experiment Day 30: Get Specific

Paths

Finally! I can put a 3 handle on this experiment. Day 30, 10 more, holy crap remember what I said about managing expectations? Well, I learned that through this experiment. I am tired and I am running out of things to say…

So I think I want to spend the fourth quarter of the experiment talking about how to move forward. I have spent a great deal of time cleaning out the old thinking. I have made concerted effort in many area’s of my life to identify and expose these areas of weakness and to change them. Selfishness, pride, greed, immaturity, and just overall amateur behavior. But I don’t think the trick is identifying them, I think the real challenge is can a person truly defeat them and never live there again? I need the inspirational  fire to move forward now…

CAN I ACTUALLY WALK AWAY FROM THE OLD WAYS AND MAKE A NEW LIFE? 

I don’t remember if I have used this poem already but the last line of Frost’s poem says:

Two roads diverged in a wood, and I, I took the one less traveled by, And that has made all the difference.”

And I picture myself there sometimes, in that yellow wood, and I don’t picture myself making the decision to follow the path. Its unfortunate but true. I am always trying to do one of two things: 1. Stand at the fork in the road and jump up and down and cuss it just for being a decision and thne being really pissed that there isn’t a map with detailed explanations on where these two roads actually lead; or 2. I choose a road, and then cut back through the woods to the other path to see how things are going on over there, and then repeat that process until it the gap between the two roads is so wide, I am forced to make a decision and it’s more of a musical chairs decision, like which one did I end up on, rather than a deliberate “this is the way I am going and forget all other paths”

So in the last days of this experiment, I need to answer one last question for my self:

Which path am I going to choose? And am I going to be specific enough in that decision to make it actionable?

Did all of the things I have written about really change me so that I can face this decision with confidence? With fortitude to never look to the side to see if another path is better? Live with the tiger, be ordinary, love the imperfect. Did it all really make a difference?

I started all of this, all I could focus on was the idea that trading was my nemesis. Trading had to be conquered and defeated. When in all reality, I was never very specific about what I ACTUALLY WANTED TO COME OUT OF THIS PROCESS! What do I actually want?

So tonight I am going to sit down and spend some time being as specific as I possibly can about the outcomes that I want from trading, and other areas of life and tomorrow I am going to share what I have come up with.

Get specific, plant the seeds of what I want, and then never look to find another, better, easier path. Just walk.

Tradinglife:BeSpecific

7.31.13 Trading Experiment Day 31: What do you Want? What Holds You Back?

One of my favorite movies as a kid was “The Never Ending Story”. I loved the adventure, the heroism, the coming through against all odds, and the idea of a journey that has a purpose bigger than ourselves.

So at 4:30 am today, that movie pops in my head out of no where. Quick background on the movie before I show this clip. A dark force called simply “the nothing” is sweeping through this fantasy world that the boy is reading about in this book. This scene is when the boy realizes that he has a part to play, actually not just a part, he IS the main character of this story and it is requiring him to take action. Take a look.

I can’t follow through on what I know to be true, I have to keep my feet on the ground

Our lives are a sort of  fantasy land. All things are possible

The “nothing” sweeps through them while we wait to actually make the decision about which way to go

And all we have to do is make the decision and say it, shout it out, own it entirely.

I have not been able to do that. I make quiet decisions and try not to let anyone know until they are done and successful. I have never owned anything. But this is my story. I am in charge of the narrative. I get to plant the seeds, I get to make the decisions on what grows and dies. Even sitting here writing this today, I still can’t tell you as friends whom I have shared so much with, what I want. My dominant thoughts are holding me back and the decision to turn pro is an illusive trophy in times like these.

As I sat last night contemplating my specific decisions that I want to make, it’s nothing short of all out war in my head. But who is the enemy? Why is there this stupid amount of resistance to this decision? I am afraid of trading for a living and making my stand there because simply, I am unsure I can do it. There it is. That’s my dominant thought. I have owned my own business, I am not afraid of risk, but I guess I am simply fearful of something I have yet to conquer.

UNFULFILLED PEOPLE SEEM TO RELY EXTERNAL ACCOUNTABILITY AND RECOGNITION, THE FULFILLED PHYSICALLY CAN NOT LET THEMSELVES DOWN, EVEN FOR A MOMENT, BECAUSE IT WOULD MEAN THEY STOPPED CHASING THEIR HIGHEST VISION FOR THEIR LIFE

So can I put the goodness that comes from a successful career as a trader as the highest vision for my life? And just own the crap out of it? And stand on a mountain and say regardless of the results up to this point, I need to come through here. I can stand here and be the best trader in my world. The dominant thought has to change to “oh hell ya, I can totally make this happen…”

I am the main character of my story, I have to get up off the floor where I am reading about my story and realize that if I want to trade for a living, I have to make that decision. And along with the decision, realistic, attainable, progressive goals.

8.1.13 Trading Experiment Day 32: We Become What We Think About

Fear

I have a feeling that the last few days of this experiment are going to work in the same way as compounding interest, almost all of my gains will come in these days.

“WE MUST ALWAYS FIRST BECOME SUCCESSFUL BEFORE WE GET PAID TO BE SUCCESSFUL”

I am going to make one last confession to you about trading here in the experiment. I know I have talked about this before but this goes with yesterday: I have not been doing what I need to do. I haven’t been working hard enough or believing that if I do that work, something different is possible.

I have let myself fall victim to “The Nothing” that I talked about yesterday. It is a perfect description for resistance. The resistance wants us to believe that we are powerless, that we are not the main characters of our stories and that we need a force greater than our own thinking that will shower us with benevolence to accomplish what we desire. All of my concerted effort is going into this one pursuit right now.

CHANGE THE DOMINANT THOUGHTS. DO IT TODAY. THAT’S ALL I HAVE TO DO

I need to become successful before I have can have anything to show for it, not have everything and then be successful. It is simple but it just doesn’t work the way we think it does. I think we have a tendency to look around at what everyone else is doing and say once I get there, then I am successful. Well I can almost guarantee that you will not get there until you are successful today.

What does that mean for me? I have to put in my hours on the charts. Not actually trading necessarily but just being in the game. I took on a new project last week. I am replacing head gaskets on a 2001 Land Rover which means I have the engine apart down to the block. This was a no joke job to do myself. And it hit me, if I approached that project the same way I have been approaching trading, it would never ever get done. I would take a bolt off and then sit down and whine about how hard this is and well things could go wrong and I may never complete this and and and.

And then it hit me! The only difference between taking an engine down to the block to change a part that will make a car run better and in turn make my life better and trading to make my life better is I DON’T FEAR ONE OF THEM. I believe that no matter how long it takes, I can fix this problem with the car and get it back to working order. That’s my dominant thought in this situation. I am in control and I can do this. The dominant thought in trading is still opposite. I am going to lose it all and no matter how hard I try, it will never work. And then instead of making a concerted effort to get under the hood of trading, I walk away and think that it should be easier…

Damn this attitude. It’s amateur to the core… but its a simple fix. Change my thinking and change my life.

TradingLife:ItISPossible

8.2.13 Trading Experiment Day 33: What Can I Reasonably Expect?

Finite Games

The difference between trading for a living (part of it or all of it) and trading as something fun that I do like playing hockey once a week is simple, yet it’s what I believe separates pro’s from amateurs: Pro’s are intensely deliberate about getting results, amateurs play the game for the sake of the play.

A book that was recommended to me by Rob Booker a while back is being recalled by my sub-conscience today as I write this. It’s in the club of “One of the most important books that I have read on an iPhone” along with Turning Pro and The War of Art. The book is called “Finite and Infinite games” by James P. Carse. Lets try and define these terms real quick..

Infinite Games: Games that are on a continuous loop. “The infinite game is played for the purpose of continuing play”; “Infinite players regard their wins and losses in whatever finite games they play as but moments in continuing play” and “Infinite players cannot say when their game began, nor do the care. The do not care for the reason that their game is not bounded by time. Indeed, the only purpose for the game is to prevent it from coming to an end, to keep everyone in play”; “Surprise in infinite play is the triumph of the future over the past” I seriously could spend hours discussing these few statements. siiggggghhhhh

So as an infinite game trader, I don’t care about the wins and the losses as long as play continues tomorrow, the future will always be better, I don’t have a damned clue why but it just has to be right? I want the loop. I want the title and the award, I just want to play the game by made up rules. It is the definition of amateur.

Finite Games: Played for the purpose of winning. There is set rules, a scoreboard, and both teams accept a win or a loss at the end of that predetermined period. “Finite players play within boundaries, infinite players play WITH boundaries”; “To be prepared against surprise is to be trained. To be prepared for surprise is to be educated.”

“TITLES ARE GIVEN AT THE END OF PLAY, NAMES AT THE BEGINNING”

To ask this question “What can I reasonably expect from my trading today, this week, this month”, and be able to count on those outcomes because you know within reason the amount of effort it will take to achieve those outcomes, is finite play. That is PRO to the core. It’s a play that has a definite end and a desired outcome. If I can’t answer that question, I should shut everything down until I can answer it…

IF I WANT AN INFINITE LOOP, GET A Wii. IF I WANT A FINITE GAME WHERE BATTLES ARE FOUGHT AND TITLES ARE GIVEN AT THE END, WHERE WINNERS ARE MADE AND LOSERS ARE EXPOSED, THEN LETS GET TO BEING A TRADER. 

And here is the thing about it: It’s my choice, I’m the main character and I’m in charge of the narrative. If I want trading to be like playing hockey, then man up and say that. Admit that it will provide no financial benefit to my family, in fact it will be a liability because it’s “for fun”, and be honest about it and move on… Or, I can put some rules to it. I can promise my family a reasonable outcome at the end of the game that day, that week, that month, and then for God’s sake come through on that expectation. JUST LEARN TO COME THROUGH. It can just be 5 pips a week, but just set a reasonable expectation to those around you that you are accountable to and then just come through on it.

TradingLife:ItsaFiniteGame

8.5.13 Trading Experiment Day 34: Trading is So Boring…

surprise-box
IS THIS WHAT I EXPECT FROM MY TRADING?

When I close the loop on trading, when I put real expectations on myself about following my rules real outcomes, trading becomes… so …. damn… boring. But is exactly what I want it to be.

Let me try and elaborate a little on what I said on Friday about closing the loop and taking the surprise out.

What does it mean to take the surprise out of trading. To me, it means when I press the button, the outcome is not a surprise. I set a stop loss, I set a profit target, and I walk away. The outcome is NOT a surprise. It will either hit my stop or it will go to the target. That’s it. I am not surprised the next time I open the platform. I know my outcome. Now, it’s my job, its my responsibility to put myself in the best position I can AT THE BEGINNING so that I get positive outcomes more than negative, and those positive outcomes need to outweigh the negative pretty heavily. So, there are four things that I have to do to take the surprise out trading

1. Put myself in the best situation possible in the form of well thought out and tested entries.

2. Know that the outcome is now no longer in question. It’s either profit target or stop. No other options

3. Make sure the positives substantially outweigh the negatives

4. Go look for surprise in something that matters. I want to be surprised by the time I spend with my kids and wife, like how awesome things just happen some times that you just CAN NOT AND SHOULD NOT try to plan.

Let my just put it another way that helped me to get over this hump this weekend. How I provide for the ones I love should never be a surprise. Do I want them to be reliant on something unexpected happening at work today, or do I want to be able to give my family peace of mind that what I do everyday is not in question, and that it will be beneficial for them?

And this is why I am so excited about trading being boring, because the more boring and routine I make my it, I open myself up to exponentially more surprise from the places that it should come from.

Plan your trades, let life surprise you

TradingLife:NoSurprises

8.6.13 Trading Experiment Day 35: Trudging Through

pond_hockey

Ever make the decision to start trading the system you have been developing, whether robot or discretionary, and it doesn’t start off as smoothly as you would want it to?

Ya. That’s me this week. It’s almost like its a trading law. “Though shalt get your face ripped off on the first week you start any system” -God-

Its just another form of resistance, our deepest and strongest enemy standing in the way of where we want to be. The back testing is done. The system will produce pips. But the day you decide to turn it all on is the day that all the normal stop outs happen. Maybe its because I require too much confirmation? I want to watch it work on the practice account and then when it does, oh ya baby lets roll! And then the market flattens out exactly like it will every time, and the trades that worked on the practice account don’t exist any more and all you can see is red.

I have found myself here two times in the last couple of years. Push forward and then hit this wall and then get immediately discouraged and tell myself “self, time to go back to the drawing board, you were wrong.” When that isn’t the case at all!

This all came into focus at hockey last Sunday. It just so happened that the best defense man on the opposing team was playing over my side every time I was on the ice. I held my own but I wasn’t able to razzle dazzle the way I normally would. (ok razzle dazzle might be an over statement. Stay on my skates is probably a more accurate representation…) Anyway, half way through the game I found myself getting a little frustrated and found myself whining in my head “i can’t make my play” “why does he always have to play tight on me and nobody else?”

The amateur little boy in me was starting to stir again.

And then it hit me right there on the bench, this is the reaction that stops me from trading. So I forced myself to think a little bit different about the situation:

1. Enjoy the competition- getting by easily every time does nothing to make me a better hockey player, just as winning every trade would do nothing but make me a cocky trader that is destined to fall

2. Do whats easy- pass the puck more, go to the bench, play better defense instead of always trying to push everything up the ice so hard

And the real epiphany of the story is: It is exactly what has been holding me back in trading…

Every time I have put my systems to work be it starting robots or pushing buttons, I have run into the best hockey player in the ice, that great resistance to my success that causes me to shrink back and question all of the work I have put in. I hit the wall immediately and I back down. I have had the courage to create, but not the courage to push through. So now it’s time to fight through. It’s not a believe thing, belief can be shattered. It’s not that it needs to be proven out, that’s done. It’s just the moment when I just trade it. I make the trade and then sit on my hands until it hits stop or PT. I realize that it’s boring and unfulfilling so loses hurt less and wins mean nothing more than a notch against resistance. I have to push through all the old with no guarantee of success other than I know that if I stop, I definitely lose. Its that moment when your running, and your legs burn, and you have to ignore the pain and just keep running, whether you win the race or not because ultimately, the win is simply beating the resistance.

TradingLife:FeeltheBurn

8.7.13 Trading Experiment Day 36: Less Effort, More Result

TIME v. RETURN

Is this a picture of your trading life? 

What causes a rational being to live this way? What causes a person to beat the living hell out of themselves trying to find a result that they simply need to let find them? Trading should come to us. When your system sets up, you know it. That is the time to put in effort. Not checking the charts every 20 minutes as a nervous tick.

I used to spend 70-80% of my time and energy pursuing trading while it could only produce a fraction of the income I need. Absurd but a true story. Why? Because I was more worried about what the opportunity meant than the actual opportunity itself. I was letting a real opportunity in my life pass by because it was just low hanging fruit. Wait. Did I just say that? Just low hanging fruit? We may choose to not eat low hanging fruit for a period of time for whatever reason, but then when its your last meal because you have been trying to grow really expensive fruit using sand and a stick… its all of a sudden the best fruit there is.

Robots are low hanging fruit. I have two up on the VPS. Why in the world would I not just let them run. They produce! They are the exact definition of low hanging fruit. They trade at all hours of the night so I don’t have to. They make decisions very easy, because I made all the decisions when I made the robot. Turn it on, then go do something else productive.

OPPORTUNITY IS LIKE THE FIELD, OR MAYBE IS THE FIELD,  EITHER WAY IT IS AGNOSTIC. IT IS SIMPLY THERE FOR YOU TO DO OR NOT DO. IT DOESN’T CARE

TIME v. RETURN 2

Make sure that whatever you are doing today is properly planned out. Make sure that the time you are spending on trading or whatever it is that you are pursuing is time well spent and that you are giving it the proper place in your priorities. Trading has the ability to do so much with so little effort. Why complicate it?

Trade your system and when there is no setups, go do something else. Either work another job or do a hobby, or do something meaningful to you. But whatever you do, keep it in the proper perspective.

TradingLife:MakeitWorkforYou

8.8.13 Trading Experiment Day 37: Analysis Paralysis

KC&CtS

I may vent a little today so please forgive me. It’s one of those things that as you grow out of a habit like drinking or smoking or biting your finger nails, and you have made all of this progress and taken the time to change something, and then you see someone else do it, and your amateur side comes back alive briefly and you really want to blast that person for doing exactly what you used to do and somehow you have become so righteously indignant about it you can’t help but be pissed…

I have been doing that lately and I have to confess it…

See long long ago (like 37 days or so) I was notoriously bad at not sticking with a chart, a system really. I have told all of this to you before in the perfection posts but I was really bad about it. I would suffer a loss or a trade wouldn’t set up for a day or two and I would want to scrap the whole thing. I would literally scrap it and go back to the drawing board and try to find that next thing that fit the chart perfectly. If  I could just play with this setting and get this moving average to do this every time then I could make a perfect system. Desire for perfection will kill all of the good you already have and you won’t even know it. So I spent a lot of time playing with indicators trying without avail to get them to do what I wanted them to do. And then this happened to me…

OK another confession time, I am so sick of having to do this. In my attempts to find perfection I did a lot of out of the box things trying to get the perfect flow. And then one day it happened. I thought I had found the awesomest system in the entire world. I couldn’t lose with this system. It back tested so great. But there was one problem and I want you to see if you can spot it on the chart below.

This is so embarrassing…

-50 BB

I did a lot of work on historical charts with these bollinger band settings. it was great. every time it touched the band price went the other way. every time. And then I put it on real time and this is what I saw. In my efforts to make the bollinger bands do exactly what I wanted in the past, I totally lost all ability to trade the present. Can you believe that. That’s some BB’s with a -50 shift. Someone please explain to me why the hell that’s even possible… Great memories.

The point is. Put in the work to figure out how you can see the chart best and what the entries and exits look like and then until you have enough money to never care again, don’t change that. Find the process that works for you and then add all of the discipline you can muster to that process until you have all the money you need. This experiment has allowed me to find my place on the charts. 15m, Bombora wave indicator, Stoch, and MACD and I will learn that system back and forth and then never stop until it has produced what I need.

If you need variety, get that box of chips that’s all kinds of little bags, otherwise, stop changing everything in hopes of finding a better way, or you will end up with a -50 shift on your BB’s and wonder how you got there, and if you can ever find your way back.

TradingLife:DefineIt

8.9.13 Trading Experiment Day 38: Traders Have Jets Right…?

This is how I start the weekend!

Simple post for the last Friday of my experiment.

If you are trading because you think that it will bring prestige and power and significance to your life,

You should put it all down now, and go find something meaningful to do. Hug your kids, tell everyone that means something to you, just that, that they mean something to you.

Because no, not all really successful traders fly in private jets.

To all of you out there who have read these posts for the last two months, thank you so much. I can’t tell you how fun this has been and how profoundly it has changed everything about the way that I view life and trading. 

I will be doing a lot of writing this weekend. The last two posts will be titled “The Summer I Turned Pro: Pt. 1 and Pt. 2”

Have a great weekend everyone.

8.12.13 Trading Experiment Day 39: Finding True Adventure

I woke up feeling kind of blah today. I had a bunch of stuff “I had to do” this weekend and I am just tired…

So I get to work today and throw on a youtube video for some music to listen to and a trailer for a movie came up as one of those annoying ads before I get to listen to what I clicked on in the first place. Well, normally in my bad mood I would click the skip button immediately, but this caught my attention. Watch…

This…. is…. me…. What do we see when we look at that internal image of ourselves? This guy was going through the motions. Day dreaming. Fantasizing about not just a certain kind of life, JUST ABOUT LIFE ITSELF!  If you look carefully as he is running by the big posters, the title of his is “The Making of a Brave Man”. And the visual intensity of running by the snapshots of others who we would determine as having a “life” was absolutely stunning to me. The making of a brave man… I could talk for hours on the concept of what it takes to illicit bravery from a person, but what I would say would be completely academic.. Bravery is only found when very raw, real risk is in play. To make a brave person, we have to beckon to a calling to do something that is out of our comfort zone, something that requires something of us we didn’t think we had.

I ended up watching this movie trailer like 5 times for some stupid reason. Adventure. What is adventure? Break out of the old boring normal. Find something to do that is dangerous, exciting, inspires hope and optimism, but at the same time has an element of fear and danger and we have to “risk something to gain something”. My friend @lavertrade came up with all of those words for adventure and they were perfect. Where does this longing for adventure come from? And how did I get trapped in the life of a man who wants some form of “safe” adventure?

See this led me down the same road that I have walked many times in the past 39 days: what are my motivations for trading? I picture myself several years ago jumping into all of this with both feet, kind of like he runs out and jumps on that helicopter and has that look of total fear, yet total excitement. Like he knows that what he just did was completely against all the protocol he has set up for his life and now he has somehow committed to a life of uncertainty, again, NEEDING somehow, to make peace with the imperfect. But here is the thing: I didn’t really jump on that helicopter. I now have the secret life of Shonn Campbell as a trader where, when adventure was no where to be found, trading was the counterfeit adventure that was so easily obtained. Counterfeit adventure: something that feels, smells, tastes and acts like the real thing, but is a fake. Trading is a fake adventure for me.

I wanted to become a trader for the adventure, not because I wanted a new job. 

And I have held on to trading as the pinnacle of the adventurous pursuit.

And now, finally, it’s over…

I am not saying that I will stop pursing mastery of the craft of the advanced retail currency trader, but it will no longer be an adventure, an open loop game, or “the end game of what I am going to do”. I am saying that this experiment took me from the fringes to the core, and now things can really be different. I am free to go find the real deal, not the bigger, better deal. (again, thanks @lavertrade)

On the next to last day, when I thought I would summarize the narrative of this entire process, I had the greatest next to final post I could imagine.

I am going to go find a new, real adventure. One with heroes and heroines. One with battles that bring victories and defeats. Trading is like that, but different… And I believe that when I find my real adventure, trading will naturally fall into it’s proper place.

TradingLife:FindYourRealAdventure

8.13.13 Trading Experiment Day 40: The Summer I Turned Pro

mountain-road1
The Road to Great Adventure

The end of the experiment is here. I am both glad to be done  and in the same exact moment, I will greatly miss the reason to sit down and write about life and trading every day. When I set out on this journey, I really didn’t plan to write so much every day. I would never have thought I had that many words in me. Here it is, day 40 and I am still writing… The entire experiment is over 20,000 words. My high school english teacher would be shocked.

First of all, thank you to everyone who read these posts. I met new people who are on the same path I am trying to travel that leads to better ways of living this life. @spacepip thanks for the videos and conversation. @lavertrade awesome input and ideas. Rob Booker and Matt Lacoco you guys are awesome. Thanks for the life changing text conversations throughout.

Why did I do this?

In all honesty, I’m not even sure what possessed me to start this. The best I can come up with is I wanted to trade for a living, I couldn’t do it, and so I wanted to shake things up. I wanted to force a change and force my hand. The definition of insanity is doing the same thing over and over and expecting different results. Unfortunately, that was my trading. It was insanity. Over trading, undefined and untested systems, stress from expecting an overwhelmingly good outcome from entirely underwhelming effort.

In short, I was an amateur, and I was immature

If you read back through these posts, I think those two words were used quite often. I am not certain because I can’t bring myself to go back and read  anything I have written. Weird quirk but I hate listening to myself or rereading what I write. But I know that as I think back on the entries, those two words stick out.

Immature: “Having emotional or intellectual development appropriate to someone younger” ouuuuuch… I can’t really deny it though. I have great conversations with a good friend about what it means to mature, to face the world in a different way than we are used to. Deny the old dominant thoughts that things should be easy, that good should come without a fight, and that battles can be won without sacrifice. To mature is to leave behind childish ways of looking at the world. Let me make one distinction here. This is not cynicism. “The world sucks.” My broker and my boss hate me.” and its all their fault that nothing good has happened for me.

Amateur: This idea wholly belongs to Stephen Pressfield, my now favorite Author after finding his work through a Raghee Horner tweet.

Side note: this happened to me twice in this experiment. First I found “Turning Pro” from Raghee’s tweet and then just yesterday I found the “Secret Life of Walter Mitty” trailer by complete accident. I truly believe that fortuitous events happen to those that are looking. If I never would have been traveling this path, those two pieces and countless other articles, videos, and quotes never would have crossed my path. Take the first step and see what you can find.

So back to amateur. Here is what Pressfield has to say about being amateur and what it takes to turn pro

When we talk about the switch from the mindset of the amateur to the mindset of the professional, we’re talking about a total, fundamental, life-overthrowing revolution.

The amateur is in the habit of yielding to Resistance, just as the alcoholic is in the habit of taking a drink. I can’t prove this, but I would bet the farm that the chemistry of the Resistance-addicted amateur’s body is as deformed as the physical chemistry of the heroin addict’s. To change, he has to alter that chemistry. And he has to do it by will power alone.”

“I turned pro myself because if I hadn’t I would’ve died. I couldn’t stand myself for one second longer or endure for another minute the wasted, pointless life I was living. Like the Peter Finch character in Network, I had run out of bullshit. Otherwise I never would’ve found the courage. It was too hard. Too unknown. Too terrifying.”

and finally…

“The good news about turning pro is it’s free. You can’t be excluded. No one can turn you back at the border. The act is self-initiated, self-sustained, and self-defined. You turn pro in secret. Not even the NSA knows you did it. But you know. And I’ll know when I look in your eyes. I know how hard it was. I know the price you paid. I know the guts it took. I know how scared you are, and I know how weird and alone it feels. I salute you. You are one in ten thousand. You have done what many, many talk about, but damn few actually do.”

Just rereading these quotes from that article get my blood pumping. I couldn’t stand myself for one second longer or endure for another minute wasted. That pretty much sums up why I did this. I wanted to turn pro, I needed will power and determination I didn’t think I had, and couldn’t stand another second of not taking steps to change.

So I Started it…

I began this journey thinking that I could expose my trades to anybody who would look and listen and spend my time talking about systems and backtesting and indicators. I wanted to prove myself out. I wanted to validate the thesis that if I traded successfully, I could somehow validate my days and desires. I hoped this would propel me from money loser to money winner. I hoped I could skip over all of the really hard stuff and get right to the victory dance (which you DO NOT want to see by the way). Well, if you have read any  of the past post’s you know that just didn’t happen. I went down the rabbit hole, or as the matrix put it, i took the red pill. I decided early on, at resistance point, that I didn’t ever want to resurface as the same person. I couldn’t.  I didn’t even realize it but I was about to  learn things like self control, discipline, willingness to be ordinary, and how to live with the tiger and not to kill him before the word “success” could even enter my vocabulary.

So instead of using this forum to discuss trading, I used it to expose my journey as really just a guy, through the lens of trading. I set out to talk about my actual trades every day but after a couple of days, I found it so uninteresting. Let me say that another way, I found myself wanting to change my bad habits, my amateur behavior, and my dominant thoughts of lack and loss and replace them with the things I really wanted to be, and it all happened just because I wanted to be a trader. From immature wild expectations of everything in life to a controlled expectation of hard work.

So What Changed?

Almost all of the preconceived notions about trading I came into the experiment holding have been put through an examination, whether I wanted them to or not. Here is a short list of the specific ideas and practices that changed because of this journey:

IN TRADING:

1. Trading frequency- When I started this, I was a classic over trader who was unable to stick with any position. I wanted to trade, and traders trade right!? They push a lot of buttons and make money very quickly and price never works against them… ever. I wanted to be in the market, but didn’t really know why other than I knew that if I wasn’t, there was not chance of me making money. ahhhhhh there is the key word. Chance. If I was not in the market, there was no chance of me making any money. For the most part I left it to chance. Chance entries, chance stops. Everything about my trading was a surprise. It was an endless loop that needed surprise to win eventually, I just had to weather enough bad surprises I guess.

That is not the case any more. The experiment helped me to train my reactions, to form new habits. I haven’t taken a trade in weeks that wasn’t apart of the plan. No more jumping in and out and looking for surprises.

2. System- In the beginning, I had an untested system that I could not look anyone in the eye and give an answer for the question “what is the reasonable expectation for your system on a weekly and monthly basis?”. I learned throughout this process that that is one of the most crucial questions to ask and answer if I am to achieve any lasting success in the financial markets. What is the reasonable expectation for my system? And can I be held accountable for those outcomes. No bending the rules because I feel this need for money. No switching the rules because I am afraid that what I created doesn’t work after it has been tested.

Now, I have set rules and I am currently in the middle of the process of identifying my “monthly reasonable expectation”. Most of my trading is now done by the robot I created. I defined those rules and tested them. Why would I not use it to my advantage? I also talk with my wife about it all the time and we are working to treat the trading P&L the same as we would with any business. No more room for surprises…

3. Strategy- Eight weeks ago if someone would have asked what my trading strategy was I would have looked at them and been like what the hell are you talking about? My strategy is to win and make money… What I didn’t realize was that this was not a strategy but an outcome. Strategy is what plan I am going to put into action to reach that desired outcome. It can involve only discretionary trading, it can involve discretionary and robotic trading to get to the goal, and it can even mean both of those plus doing another job until a strategy without the extra job can be defined if so desired. Strategy is not something that needs to fit into a certain mold or box, but once defined, needs to be molded and not changed until the desired outcome is reached.

My strategy now involves proper lot sizing always. No exceptions. It involves discretionary trading, robots, and a job to reach my needed outcome right now but the strategy also addresses what it will take to not have to use all of those things to get to the outcome every month.

IN LIFE…

I am going to keep this to one idea. I turned pro. Not just in trading but in so many ways I would have to write a real book to explain them all. Defeating resistance, doing whats easy, making a plan, defining the process and then adding tons of discipline to that process. I could literally write an entire book on the things I have learned about life because I did one simple thing, I made a real effort to change it.

Surprisingly, I think Life of Pi was my favorite movie I watched during this time (see day 14). The imagery of the tiger as the self he had to conquer was very powerful for me. He had to face himself on that boat in ways that most of us probably will never have to. To learn to live with that side of us. The untamed strength that Richard Parker represents is what can make a person dangerous and needs to be reigned in, but we should never try to kill the tiger because all greatness needs those exact same qualities.

SO NOW WHAT….?

So now what? I keep asking myself this question. I believe that if you had known me 40 days ago, and we got together tomorrow in some coffee shop and shared a good cup of coffee that you would see a difference in my eyes, the difference Pressfield talks of. It’s just a glance between those who have made the transformation. Those that have walked through the fire and have allowed themselves to be melted down and reformed,

Trading is different now. I want to let the robots do their work. I don’t have to be in control. The perspective on life is very very different now. I can’t go back to old ways. I would be lying if I told you I was going to go back and try so much harder at being a better trader now and I am going to quit my job and trade full time. We say that like it’s important. That’s like me saying I am going to quit my job…. and go get…. another job! No crap. That is a reasonable expectation I think. A job is a job and now that I have most of the trading stuff in perspective, I can do it, and move on. Be super successful at it and in the same breath never care about it again. Why?

There is a greater adventure

There are adventures where we make life better for those around us. Adventures that are not so self absorbed because that is no adventure at all, it is just boring and utterly unfulfilling. There is purpose and meaning and the ability to change things for the better.

So… I am off to find that adventure. I am looking for my helicopter to jump in so I can go do something incredible.

Thank you everyone, I have so much enjoyed this journey with you… I will continue to write once or twice a week, hopefully about the new adventure.

Shonn Campbell “Trading Experiment 2013”

TradingLife:OwnIt

P.S. no matter when or where you read this, I would love to hear from you. shonn@shonncampbell.com or @plateautrader

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5 thoughts on “The Trading Experiment

  1. This is so inspirational to watch unfold. This is not just about trading. In fact, I’d argue that trading plays a very small role in what is actually happening as a result of this experiment! Here’s to being the fisherman!

  2. Motivating! I can only sit and ask myself why I have not shown this same level of commitment to learning about myself and trading! I guess its my turn next. If you’re going to be serious about it, then be serious about. Thanks Shonn!

    1. Thanks Derek. I have very much enjoyed my summer of turning pro. I would recommend it to anyone… and I really hope it is your turn next. I would be anxious to hear about it.

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