Wednesday, 4 May 2011
Time for an update on how things are going generally. I've attached yesterday's P&L, which is a fairly typical one for me over the past month. Since the end of March, my trading has entered a level of consistency which I have never experienced before. This was of course, due to my changes with risk and bank management. The freedom and loss of anxiety which followed, enabled me to trade to a higher standard, without the pressure I'd been suffering from. During the last month, I believe that I've reached a new phase in my trading career. The fear factor has gone, I'm 100% comfortable and happy with my strategy and this has born out in my results. I've only had one really bad day in roughly 6 weeks. And best of all, I can pin-point exactly why it was such a bad day - alcohol!
It occurred last week. I had been on a night out and ended up drinking too much. I'm not much of drinker anyway and only have a lager very rarely these days, so it doesn't take much for me to exceed my limits. I paid for it literally the next day, as I woke up at 10am after just 6 hours sleep with a monstrous hangover and attempted to trade immediately. Never, ever again. I was tired, irritable, dehydrated, my mind was wandering to the events of the previous night and I just couldn't focus. I have a vague recollection of trying to kiss a woman I'd just met and didn't even find attractive, getting turned down and then storming out the club in embarrassment, missing my last bus and walking several miles home in Baltic weather. Not great preparation for a day on the ladders!
Anyway, I managed to lose 2 full stakes that day and served as a harsh reminder that I just can't afford to be anything less than 100% focused and professional. In the past, I would have then gone into meltdown for the next few days at the very least but it's a sure sign of my evolvement as a trader that I followed it up with a whole week of profitable days without the aid of even a hint of chasing.
My mid-term goal of late has been to string together a month of consistency. I've achieved that during April. So I'm now moving into a new phase, where I aim to increase stakes gradually. I'm still on stakes of between £25 and £100, which is far lower than when I started this blog. I'm averaging about 50% ROI most days, which is obviously a fantastic return but I don't have the financial rewards I'd like as of yet. I will begin by increasing in either £25 or £50 increments every couple of weeks and see how it goes.
My long term goal remains to make trading my sole source of income and I would hope to achieve that by the end of this year. I've stripped this back by more than 6 months, as at the start of 2011 I fully expected to be at that point by now - didn't quite go as I'd planned, that one! I am being far more conservative with all my goals these days, as it helps take the pressure off, so actually, I know that I can achieve it sooner if I remain focused. The question is, will I remain focused?
Over the past month I've come to realise that it is this aspect of trading that now stands in the way of my success. There has been a direct correlation between my better days and the amount of focus I've put in, over the past month. Whenever my head is not quite right, whether it be a wandering mind, tiredness, stress etc, I have generally put in worse performances by making more errors. Focusing well, as a technique, should not be underestimated. It is a skill in itself and one that every trader needs to work on.
During April, I realised that I could deal with any focus issues in a different way. Rather than it being a constant battle to stay 100% focused every single hour of every trading day, I decided to just accept I cannot always be at that level. So instead of ploughing on through the tough periods and inevitably making mistakes and getting frustrated, I now am able to feel when I'm starting to flag and just stop trading. That could mean missing whole matches or taking an hour off to do something different, a change of scenery or activity. It's worked wonders and I think generally, this is an attitude I've taken in all aspects of my trading, where I've just taken a step backwards, away from the trading bubble that is so easy to get trapped inside.
When you are a neurotic perfectionist like me, it's very hard to stop what you are doing because you are constantly striving to get everyhting as good as it can be. But with trading, you can never be 100% perfect all day, every day. Whilst I understand that, changing my personality to suit this methodology is almost impossible. So instead of this battle to change who I am, I decided to just accept those flaws but learn how to manage them properly. Whenever I start to get obsessive over small losses, or frustrated over a tiny error or if I get a sudden urge to be creative or get some exercise, I don't fight against it - I stop trading and do whatever I need to do to get it out of my system. Sounds like a simple thing to do but trust me, when you are full-time and the pressure of making money is on, it's hard to miss out games where you could have made profit. But you have to remember, you can also lose on those games too!
Comparing myself to tennis players, 2 months ago I said I was like Svetlana Kuznetsova or David Nalbandian - brilliant one moment, bloody awful the next, erratic. Now, I'd say I have advanced to a Tommy Robredo or Shahar Peer - reliable, consistent without being spectacular. But my next aim is to become Caroline Wozniacki or David Ferrer - consistent but with a bit of added flair and unrivalled mental toughness. Of course, the final goal is to become Rafa Nadal or Serena Williams - that means taking the Grand Slams consistently. I'll let you know when I get there as I've added a new section to the blog: 'Which Player Am I This Week'!!