I decided to take the weekend off and have a long, hard look at where I am going with my trading. I could feel myself starting to slip off the tight-rope and do irrational things, so I took a break and had a bit of hypnotherapy to sort my head out. I also thought it might help to take a look at my 3 month p&l. I rarely bother looking at it, (in fact, I never look past 24 hours) as it's just one of those things that scares me! I always have a rough idea of the amounts I'm making, as I keep written records, I just don't tot them up. But every so often, I find it useful to see everything in full detail. So it was with a deep breath that I pulled up my p&l for the time since The Dark Ages. I was shocked at what I saw. But it wasn't my profit that shocked me (it confirmed that I was turning over a reasonable amount), it was the number of full-stake losses.
I have lost almost £3000 in full-stake losses ALONE in the past 3 months. I'm stunned at the size of this figure. I tried to put a positive spin on it though. Think of it this way; I'm in profit for those 3 months by a healthy margin. If I hadn't suffered those full-stake losses (in other words, if I had redded up when I was supposed to, at the 25% mark) I would have been in HUGE profit. Well, huge for me anyway! I also know for a fact from my paper records, that many of those losses were in strong green positions which I didn't take, before they became red. So if I'd taken those greens and those 25% reds, they would roughly have cancelled each other out, leaving me with an extra three grands worth of profit. And all of this on stakes of £100-£150 for the majority of the 3 months.
So this does prove one very important thing; I know how to consistenly make money. Imagine what that profit could be with double or triple the stakes. And if I have lost £3000 through full-stake losses, I am obviously turning over well in excess of £3000 in order to cover it and all of the small losses. These are not big wins either (95% were under £50), so I am consistently producing a lot of winning trades. And I have very few losing trades of between £50 and £100, which shows that for the most part, I do red up early on, it's just a small number that get through the net. So it's obvious what I need to do in order to reach the levels that I need to be successful; start redding-up more!
I guess because I wasn't looking at my monthly or even weekly p&l, I misjudged just how bad the situation was. I had a total of 30 trades where I lost the full amount I started the trade with. That works out as roughly 2 per week. So every week, I'm putting myself a couple of hundred pounds in the hole before I've even started! I guess the size of the losses gets lost somewhere on the page when written down.
I am hoping that this realisation will be the spur that I need to get that passion back. Now that I know that it's just a handful of large, losing trades that are preventing me from hitting all those heights I'd dreamed of, perhaps I can now really knuckle down with purpose. When you put in all the hours of graft that I have, only to see you are still taking small steps, it's no wonder that a bit of the spark becomes lost. But a new challenge has been set, something for me to really get my teeth into - banish those full-stake losses.