a conversation
A few weekends ago my wife and I were talking about our jobs and how easy it was to over-think them, get bogged down in the detail and completely lose track of our long term goals. Three thoughts have been repeating on me.
the present
In regards to trading, and life for that matter, I constantly get distracted by details. Moving averages, candle patterns, economic data, to paying bills, and doing the cleaning. I find it so easy to busy myself in the method of something instead of keeping my focus on the overall strategy. Of course as Sun Tzu says, without one the other could not be achieved, however perhaps the truth I'm missing is; it doesn't really matter what tactics you use.
If you're a trader with a high hit rate and average returns or a low hit rate hitting home runs, to be successful you just need to win more $$$ through your winning trade(s), than you lose through your losing trade(s).
the future
My coach along with quoting Sun Tzu, is always saying to keep things "desperately, desperately simple" and in the past few weeks I'm starting to see how desperately, desperately easy it is to do the alternative.
I've been reading a lot about WW2 recently, the allies got off to a terrible start but ultimately they beat axis to the hydrogen bomb, the rest is history. I can't hand on heart say that I start my trading day thinking about dropping the H-bomb, or even creating it and this is solely because of my propensity for over-thinking tactics.
Going forward one of my main objectives will be putting on my strategic hat more often throughout the week. This will mean a rethink in how I work my day and actually what I believe is important in it.
To start with it feels identifying my trading truths is a good place to start.
my trading truths
I am certain I am paraphrasing some of these from Mark Douglas...
A few weekends ago my wife and I were talking about our jobs and how easy it was to over-think them, get bogged down in the detail and completely lose track of our long term goals. Three thoughts have been repeating on me.
- How is this impacting my present?
- What power does this hold over my future?
- Paul quoting Sun Tzu all the time is starting to make sense.
the present
In regards to trading, and life for that matter, I constantly get distracted by details. Moving averages, candle patterns, economic data, to paying bills, and doing the cleaning. I find it so easy to busy myself in the method of something instead of keeping my focus on the overall strategy. Of course as Sun Tzu says, without one the other could not be achieved, however perhaps the truth I'm missing is; it doesn't really matter what tactics you use.
If you're a trader with a high hit rate and average returns or a low hit rate hitting home runs, to be successful you just need to win more $$$ through your winning trade(s), than you lose through your losing trade(s).
the future
My coach along with quoting Sun Tzu, is always saying to keep things "desperately, desperately simple" and in the past few weeks I'm starting to see how desperately, desperately easy it is to do the alternative.
I've been reading a lot about WW2 recently, the allies got off to a terrible start but ultimately they beat axis to the hydrogen bomb, the rest is history. I can't hand on heart say that I start my trading day thinking about dropping the H-bomb, or even creating it and this is solely because of my propensity for over-thinking tactics.
Going forward one of my main objectives will be putting on my strategic hat more often throughout the week. This will mean a rethink in how I work my day and actually what I believe is important in it.
To start with it feels identifying my trading truths is a good place to start.
my trading truths
I am certain I am paraphrasing some of these from Mark Douglas...
- Trading is based off probabilities.
- Probabilities produce random results but over time produce predictable patterns/KPIs.
- Patterns/KPIs be they good or bad, tell you what strategy you need, no guess work is needed.
- The only way to reveal your patterns/KPIs is to build your numbers up.
- Success is simply winning more $$$ through your winning trade(s) than you lose through my losing trade(s).
summary
The lesson from WW2 seems to be, it doesn't matter how many battles you lose as long as you win the war. The lesson for trading may not be identical but it certainly isn't opposed.
There will be many battles and I won't be able to predict the outcomes however over time they will reveal my patterns. It is those patterns that will tell me what to do next, one could say;
The December Trading Issues post was not off the mark. I suppose today I have simply thought a little deeper on exactly what "just build your numbers up" means.
The lesson from WW2 seems to be, it doesn't matter how many battles you lose as long as you win the war. The lesson for trading may not be identical but it certainly isn't opposed.
There will be many battles and I won't be able to predict the outcomes however over time they will reveal my patterns. It is those patterns that will tell me what to do next, one could say;
it doesn't matter how many battles you lose as long as you win the war,
the only way you can win the war is if you know you patterns
and the only way to reveal your patterns is to build your numbers
The December Trading Issues post was not off the mark. I suppose today I have simply thought a little deeper on exactly what "just build your numbers up" means.
Desperate2ly simple strategy (longterm) in trading is just using 2 straight lines :)
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