Is it Just a Dream?

I have traded from a bar
And the back seat of a car

I have traded on a train, 

In the sun and in the rain

Is this the land of milk and honey?

Can I make sufficient money?

Will the bills get paid when due?

Read on for a clue or two…………….

In the beginning

You could say that I’ve “dabbled’ with financial trading for a number of years.  Predominantly stocks and more recently Forex. I’ve been moderately successful on the stock front and moderately unsuccessful on Forex.  Like many who have trodden the realms of charts and indicators before I have also wasted hard earned cash on so called systems that just don't deliver on what they promised.

I’d been on planet “corporate” for nigh on 40 years.  I’d spent the last 8 of those in the USA but earlier this year decided that the time had come to return home to the UK.  Two days before boarding the flight with wife, child and cat I took the bold step of quitting my job, the circumstances of which are a whole different story and one that I may share in time.

But how can you live by trading if you've only been moderately successful? I hear you ask.  Well, having spent a year using the Inteligex platform I had enough data to convince myself (and more importantly my wife) that trading could and would:

1. Make enough of a return to keep us all warm and fed
2. Give me some more family time
3. Allow us to do what we want, when we want (within reason)

So, decision made the rest is bound to be really easy right? Tick the box YES/NO in your head before reading on!

Life Just Ain’t That Easy.   Despite all the practice, all the pain of starting on a sim account, then using real money, surely any and every challenge has been dealt with?  5 weeks in I can categorically say absolutely not.  And even if you think they have, they haven’t. Here’s just a few to be going on with:

It’s All in the Mind?

No longer do you have the safety blanket of the monthly pay check.  This is more than enough to play havoc with ones rational being.  Whilst it is desirable to maximize the trades you get into, it’s probably more desirable to protect your capital.  This has caused some conflict and also frustration; these combine with a multitude of internal conversations on the topics of could’ve should’ve and would’ve.  How many traders have exited a trade and then given themselves a good kicking when said market moves on a further 20 points in your chosen direction.  Rationally, be happy with a profit in the knowledge that many more great opportunities will follow.  Don’t rue the miss, look forward to the next success, whatever size it is.

Organisational

I’ve found it really important to create a routine, just as long as that doesn’t conflict with essential family duties.  Personally I like to be on it by about 7:15 am.  So I get up, freshen up, switch the machines on and get stuck in.  I set my own daily levels as I find this “cements” the numbers into my subconscious.  Not only that, but I like to trade the German market when that opens, along with my “pet” MCL (US Crude Oil).  I currently split my day into two, and sometimes three shortish sittings; at least they are short compared to a normal day job.  This is actually where lifestyle starts to have some meaning.  Plus I set the times that I want to trade.  If the market gives it gives and conversely if it takes away it takes away.  So I’ll “work” from 7:15 ish am to 9:30 ish am, then again from 2:30 ish pm to 4:30 ish pm.  I may take a little look later on or sneakily leave my machine on and annoy the hell out of my wife when it buzzes away from time to time.  Gotta love those audible alarms!

Return on Effort

This is a fact that requires personal acceptance at a rational level.  The Returns will be what they will be. This is based on the market, individual skill, understanding of the tools used and the ability to be disciplined.  Easier said than done I’ve found.  The trap to avoid here is to absolutely avoid putting yourself into a situation where you feel like you’re trying to catch up as this promotes irrational behavior and will lead to losses. 

Statistically Speaking

Over a period of time, on average, the market will allow you to win a certain number of points.  This will be different every day: some sessions there are Trade Signals I want to take and some sessions there aren't.  It is what is is and I've had to get comfortable with that. Which in itself makes having a daily target, not pointless necessarily but certainly arbitrary.  What can be made from the points on offer depends almost entirely on individual risk preference in terms of the numbers of contracts traded, where the stop is placed, and so on.  My own challenge of “can I make this work?” at the moment is a cautious yes.  I think I’ve settled this week on a formula that fills a couple of personal criteria in that 1. It doesn’t stress me out and 2. It delivers a liveable return.  In terms of contracts, I’m working on micro e-minis:  MNQ - 2 to 4, MCL - 3 to 5, MES - 4 to 6, DAX - 4 to 6.   I did go through a spell of being more aggressive, for instance  5-10 contracts on MCL.  This I found to be a little nerve racking for now so settled back on some more modest numbers.

Notes to Self

Not only do I talk to myself and my laptop, I’m also writing down notes as I commit errors or succeed.  So whether real or imaginary here are a few:

• Do not try to out think the market - it often moves in mysterious ways.
• Do not think you know better than the Inteligex System - the amount of experience, hard work, and data that have gone into it is beyond my comprehension so trust the math!
• Protect your capital - No capital = no income.  Get stops in place and only move them to protect returns and de-risk a trade.
• Don’t get sucked in by the market - you may lose a couple consecutively, in which case walk away, have a cup of something and come back later. There are soooooooo many opportunities to be had.
• Don’t spend 8 hours in front of a screen - a) you really don’t need to, and b) there are more important things in life that formed the reason for doing what you do.
• If you don’t feel like it then it's probably a good idea not to - the head has to be in the right place to do what we do.
• Analyse and Diarise - Analyse the markets you trade, the trades you took and the ones you didn’t. Understand the opportunity on a daily basis.

Conclusion

So far so good.  Some hard lessons learned and thankfully lots of room for improvement but I'm happy.