(via The Kirk Report : Justification Mode)
This article was retweeted all over StockTwits today before I finally read it. A great read that gave way to thoughts about my own trading. So to be blunt:
Summer chop is hard to trade
2010 has been nicer than 2009 but I’m not pleased when I look through my journal. After a great 1H 2010 - in which I stuck to my trading plans more, traded well, and seized opportunities, I can see how coming into July my ego got stoked enough to be loose with the rules. Respect the market by studying and taking the lowest risk opportunities.
Keep the probabilities in your favor
Losses have to be quick and small. “Keep it tight.” But what messes with my emotions is that those tight losses are taken more often. The focus on losses as numbers and not probabilities allows emotion to cause, over-trading at best and gambling at worst.
Patience is required. Entries have to be close enough to perfect. Smaller lot sizes on riskier entries. Take more off the table. Leave less to run. Break even stops. The idea is to be strict with both risk and profit. So I may be wrong more often but the losses are much smaller, allowing the winners to remain real winners.
Very timely article for me today.
My thoughts here are specific to my trading style and performance so let me know what works for you! Many fellow traders are doing well this year too both professionally and personally. We have all grown and prospered so much and I am always humbled to be trading and talking and tweeting with them. I’ve known traders on my stream for almost/over a year now. Our trading has certainly improved after last July. But oh what an interesting year :)
