2011 summary 2012 heads up and ‘secret weapon’ insight :D

So I’ve managed to procrastinate at olympic levels on writing this post but feel the need to draw a line under 2011 before moving into 2012. This kinda comes under the same category as tidying up, sending un-used clothes to the charity shop and filing paperwork but lets go for it πŸ˜‰

First off – I’m continually surprised by how much I actually got out of blogging both as a way of kicking my own ass but also the comments, feedback and great people I ran into during the last 12 months. This ‘ere humble record received 6480 views last year and more astonishingly I gained >160 followers on the twitter. I have no idea what to do with the twitter side of things btw but thanks for the interest!

I’m entirely amazed by this and would like to say ‘Thank You’ as well as wish everyone an awesomely successful 2012.

I’m painfully aware that this ‘media’ (?) success is completely un-reflected in my trading results however and since this whole blog thingumy is entirely peripheral to the main point I’m not going to say much more other than bits of the site here need bringing up to date (esp. books) which I’ll do as and when. (honest)

So I’ll break 2011 down into quarters to give the whole thing some structure and take it apart from there…

Q1, Q2, Q3 Jan-Sept

I guess looking back this is really the ‘no freaking idea phase’ where not only did I not know but essentially everything (including myself) could have killed me. The bit where the caveman walks out of the cave in the belief that velociraptors are actually cuddly, kind creatures that are simply miss-understood.

On the plus side (possibly out of desperation) at the end of June I began to learn vipassana meditation which I’ve not mentioned anywhere in this blog previously. Now, I’m sure some people will take the piss πŸ˜‰ and if you’d have told me in the beginning of 2011 that I’d now be doing this every day I’d have laughed my ass off too. No really. I’ve done stand up comedy about Jesus beating someone to death for driving in the centre lane of the motorway so don’t start on this, ok? K πŸ™‚

The reason I mentioning this now is to say doing this has had a ridiculously positive impact on my life outside of trading which has fed back into how I view what I’m doing on this particular (trading) area…

So vipassana is ‘looking at things as they really are’ which, if you know any psychology at all or understand perceptual bias is very worthwhile getting your head around with regards to trading. Now hopefully you’ll follow me on this…

People (the majority of retail traders) look at trading (imho) because they are un-happy with their existing situation and being a trader will ‘solve all their problems’… doesn’t look hopeful eh?

This means that when trading they are extremely attached to the outcome and that will inevitable cause them to NOT see what’s actually going on in the market – they will be too anxious, too scared, too fearful and too everything. They will do everything wrong. Take profits too early, trade emotionally (revenge trade) and also pass up opportunities to actually do things properly.

Their trade will represent how they see themselves in the market. Overconfidence on one side (possibly) without the required actual knowledge versus fear on the other side also compounded by lack of knowledge.

Now to come back briefly to this – I’m writing this blog to prove to all the retail traders out there that have got sucked into the FX hype that it can be done and it would be pointless to pitch up out of the blue running around shouting ‘I did it – I’m consistent’ without being able to contribute to the rather sketchy (i.e. shit) path worn in the road by the travellers before. I’m talking about lack of ‘proper’ methodology about how to master this skill but I’m also digressing a whole hell of a lot. Sorry!

Anyway the psychology will kill you if you’re looking for success in the market to ‘fix’ an issue you have out there in the real world. One of the ironies here for me is that if I wasn’t going after this goal then I’d likely never started meditating in the first place and I’d not have seen what a powerful tool this has been at every level.

Here’s a hint at what’s happened outside of the trading arena.

  • No longer dealing with people that just sap my energy
  • Now getting on better with friends/colleagues in a job role that (while stressful) I really enjoy
  • Have resumed running in addition to the usual gym stuff I do
  • Haven’t had a cold or any sort of illness for the last 6 months
  • Eating better and sleeping better
  • More ‘level’ emotionally

Now, is my life suddenly perfect? Hell No πŸ˜‰ but I’ve realised that all the solutions are actually locked away in my head and that they will absolutely NOT come from getting really good at trading in order to solve problems by being able to throw money at them…

So what does this mean for trading? Like a dog with a bone I still want to become very proficient at this skill. However, all the reasons for doing so are now subtly different because they’re no longer keying in to all the negative emotional and psychological debris that massively gets in the way of any kind of decision making. The emotional ‘tie’ between me as an individual and my position in the market isn’t going to screw me over (as much – lol) whenever I’m looking at what’s going on.

Now, am I suddenly a ‘super trader’? No because I still have some un-helpful character traits that I need to sort out.

1) I’m way too impatient. By this I mean I close good trades far, far too early. This is just going to take some new ‘rules’ and self discipline for me to stick to them

2) I’ve been trying to trade 5min intra-day bars when my work commitments make this virtually impossible. Putting myself under this kind of pressure has had a negative effect in the last few months. I actually like this timeframe a lot but it’s not workable in my current circumstances

3) Still crap at record keeping. Which essentially points to laziness on my part and currently have one and a half days before the end of tomorrow to write a proper trading plan for 2012. We’ll see how much coffee I can consume tomorrow eh?

Before I get into Q4Β here’s another observation… The ‘goal’ of becoming a consistently profitable trader isn’t the actual goal at all. A goal is nothing more than an end point and when you’re at the foot of the mountain it’s entirely the wrong thing to concentrate on!

The goal is to master the processΒ of executing good trades and managing them well. Concentrating on the ‘goal’ is simply going to be the most massively frustrating thing you’ve ever tried and you will more than likely give up. It’s the process that is 100% more important than the goal. Some obvious examples

Trading
goal – money etc. you’ve seen the spam too so I won’t elaborate πŸ˜‰
process – simply learn to execute good trades one after the other

Diet
goal – lose 12kg
process – keep in mind what you eat, track it, don’t over-eat, exercise

Learn a language
goal – chat up anyone (LOL)
process – learn the grammar, structure, vocabulary and practice, practice, practice.

So you see, it’s the goal that’s sexy in the beginning but the PROCESS is way more important. This is why (to a certain extent) all the ‘positive thinking/affirmation’ crap gets on my nerves. Be mindful of the process and forget the goal πŸ˜‰

Q4 Oct – Dec

Here I think things actually improved. I got some proper tuition and possibly found the humility to listen and focus on the process of becoming proficient at a skill using my own eyes/brain rather than expecting coin to fall from the sky like some sort of manna from heaven… Yes, it’s taken my 9 months (well more like 12+) of bashing my head on the wall before I realised I didn’t know anything about what I was really trying to learn…

People I’m learning from…

  • Jimmy Young – absolute 1st rate tuition/value for money/pull out all the stops so you ‘get it’ however intra-day (5 minute) so kinda challenging for me and the j.o.b.
  • Chris Lori – price action, price action, price action (1hr-4hr-Daily)
  • Nial Fuller – as above with a different slant

On this basis I’ve been making a fair fist of trying to trade during the day while working and let me be clear about this – it absolutely doesn’t work πŸ˜‰ The amount of ‘mental’ required to get into the flow of what the market is doing on a daily basis isn’t compatible with staying employed. So I’ll be moving up to 1hr/Daily charts while keeping on with Jimmy’s excellent course as we progress through 2012.

So there we have it. I’m gonna head out to get a coffee and write a trading plan framework

Thanks again for all the comments, support, suggestions and especially criticisms

All the best to everyone for 2012

Namaste

Rob πŸ˜€

Finally 2012 can’t really start properly without some of the following because we must all be a bit ‘loco’ πŸ™‚ Kickit! INsane in the BRain πŸ˜€

Advertisements

9 thoughts on “2011 summary 2012 heads up and ‘secret weapon’ insight :D

  1. Applet

    Rob, Few years ago I was trying to do the same ie trying to trade while at work but ofcourse this didn’t work and I am back to daily charts. I have realised looking charts for 15 minutes a day, execute the trade if there is a signal / pattern and leave the trade to work out itself to either hit the stop or hit the first profit target is much more relaxing then intra day trades. Happy New Year!

    Reply
    1. robertsweetman Post author

      Happy New Year and thanks for the comment πŸ™‚

      Yes, apparently I’m not the multi-tasking omnipotent genius I thought I was – damn!

      World domination will have to wait till 2013 πŸ˜‰

      Reply
  2. Simon

    An interesting post.
    It is very important to keep records of your trades. I am a bit lax I wanted to spend time reviewing the trades and reading my trading diary over the Xmas holidays. But I have not had the time. I will make time tomorrow.
    Rob it is important to to keep a diary and a record of all your trades. Because you then have something to review at the end of a month/ year etc. To see what you traded and why. Also writing trades down, printing off before and after charts stops you from impulse trades. It stops you going rogue. And Rogue traders break the bank. See UBS etc
    Regarding closing trades early. I fire and forget because nowadays you can get real time prices and that can be very addictive. When my father was dealing in equities you got the price by asking your broker, or looking in the FT.
    Keep a trading plan by your desk and keep reading it.

    Good luck Happy New Year

    Simon

    Reply
    1. robertsweetman Post author

      Hi Simon – thanks for the comment and I completely agree

      Absolutely ref: trade diary. I’ve been writing trades down before trading them and this helps enormously so that I don’t trade ‘crap’ i.e. have a valid reason for opening a position. This is part of the reason for the flattening of my (previously) plummeting equity curve πŸ˜‰

      The bugbear for me at the moment is patience. Having the patience to wait for the price to get to where I’d expect it to… Nothing more frustrating than doing the work and then cutting the position for it to get to the target later. This is a fairly big psychological issue that lies between where I am and where I’d like to be.

      One thing I read yesterday which hit me was ‘don’t chase the market’ which applies for exits as much as entries I guess. So the idea of practising what I know to develop a good trading idea and then sticking to trading the plan is what I need to do.

      Laughing at that last sentence since ‘I know what I need to do’ is sometimes far from actually ‘doing’ what needs to be done πŸ˜‰

      Cheers

      Rob

      Reply
  3. Steve

    Hi Rob,

    What your explaining above is pretty much what I wrote here a while back:

    http://www.thetrendfollower.com/2010/12/controlling-controllable.html

    Unfortunately the vast majority of traders need to go through this phase to truly understand the value of a proper trading plan. If you can concentrate on the process, the results will follow.

    What you have done is acknowledge this, and are still in the game without blowing your account. Once you can get to the stage where you solely follow the process in an unemotional state, you will start to see the financial rewards – and that will make the success all the sweeter, as you’ve learned the hard way.

    All the best for 2012.

    Trader Steve

    Reply
    1. robertsweetman Post author

      Hi Steve

      Thanks for stopping by and the comment πŸ™‚ I guess the plain fact with respect to planning is that until I’d got to a certain level of experience at failing I didn’t have a clue about what ‘might’ work for me or my personality with respect to trading. Also went through an awful lot of believing huge amounts of crap that simply didn’t work either.

      Now I’ve a fairly good idea about how to actually go about doing this and I’ve invested more time, energy and money in cracking this mad-arsed pursuit than anything in life previously. So as of this weekend (about 21:06) I’ve got an actionable plan.

      Next blog coming up! LOL

      Cheers

      Rob

      Reply
  4. Pingback: Miss-directed rebellion | robertsweetman

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s