Lessons Learned 20th March

To say this is a session review is a bit misleading as I wasn’t really trading today’s US session. Instead I was up at 06:00 GMT to trade the US overnight session. Why you ask? Mainly because I had to!

I wasn’t expecting the market to yield much in the way of good moves, I was aware that this was an incredibly slow time to be trading the US Treasuries and that it rarely if any provides good opportunities. I decided to trade this session because I was unsure if I’d have the chance to trade into or past the open for the trading day proper, and also because I’ve seen a few things recently that indicated that I might be able to get some use out of watching the screen in the morning UK time.

About an hour into my session I noticed the market pick up with some signs that an opportunity was coming, at this point I noticed two things. Firstly that I was keen to get an order in the market (too much time just revising and watching lately) and secondly counter to that,  that I was hesitating. I became conscious that I was resisting putting the order in because I have been starting to draw the account down and am very aware that I don’t have long to go before it becomes very hard to trade full stop. It just goes to show the psychological freedom having a big account affords traders.

Trying to trade as if my account side wasn’t a hindrance I placed the order, thought better of it and cancelled it. I knew this was procrastination. I knew that my recent 1 tick up 1 tick down run cant be how I trade going forward. I knew that I had to assume the risk if I believed in the trade. I thought that I could potentially get about 5-6 ticks if it went my way, and as much as I’d like to have said that the risk was contained to 2 stops in all honestly it needed to be 3, so 3 it was.

I sat for a few minutes, was it doing what I wanted, was it doing the opposite? I couldn’t tell. I decided however that a likely reason I couldn’t tell was that the market was slow, time of day being a big factor in the confidence of the trade as ever. I decided I believed in it and placed the order. I was filled fairly quickly and put my stop 3 ticks away and watched. Usually at this point I start to stress about being in the market but not today. I’m really making ground at keeping my cool during trades which is pleasing to see. A few minutes after I was filled the market started to move against me, then back, then against me again. I decided to let it play out and acknowledged that in this kind of market I needed to let the trade do it’s thing. As it happened It moved against me and took me out for a 3 tick looser.

Bad trade idea? Feeling pressured to get in the market? Maybe. In all reflection though I still like the trade. It was based on sound thinking and risk to reward principles. I thought the trade idea was good and I’m going to stand by it. What wasn’t good was that the market was slow, this made it hard to really see if things were conspiring against me and if it had been later in the day, I could probably have gotten clearer signals that either the trade wouldn’t work, or that it was going against me quicker allowing me to maybe get out for 2 a tick loss.

So what did I learn today. Looking back there were a few opportunities this morning but as I watched things play out, I think (for me at least) they are too hard to capitalise on. John Grady advises against trading these times for a reason and I guess I’ve seen that for myself now. Peak trading times allows you the knowledge that your market reference is one you can have confidence in, it’s the one you know, it’s the one you’ve spent time learning so I think going forward as I try and nurse this account to safety I’ll stick to those times.

I also saw something else today, something I’m delighted with. I wasn’t stressed during the trade and after I closed it I managed to watch the market and pass up all it’s sub optimal opportunities for the rest of the session. Interestingly enough it looked like the US trading day was a good one but I wasn’t there so there’s no point me commenting much on that. Previously I’d have been compelled to try and win the 3 ticks back. Losing 3 ticks on a small (very small) account hurts percentage wise, but today I wasn’t caught up in the dollar value. Today it really just felt like the cost of both doing business and in learning a tough game. I’m aware that I can’t endure the cost of learning for ever, forcing it however would be a bad move so I put it behind me and continued with my day, planting some potatoes with my daughter which more than made up for things. All in all a balanced day.

As ever if you have any comments or points I’d love to hear them, either publicly or privately. Thanks for reading!









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