Saturday, 13 August 2011

The FPD Plan

Focus, Patience, Discipline. The cornerstones of successful trading. Today, I've put together a new plan which I hope will push me through what I believe is the final stretch to success. All my note taking and analysis of the past couple of months has produced the same, clear results. But I've not been able to learn from this and apply it consistently to my trading. The following FPD Plan, aims to rectify this:


FOCUS


When I'm fully focused, concentrated and 'on it', I trade well. When I'm not, I don't. It's that simple. Retaining a high level of focus will be the easiest of the 3 'cornerstones' for me to achieve. I realise now that I just have to stop trading when I feel the first signs of lack of focus creep up on me. Whether it takes one hour or one day to sort myself out, have a rest, eat something or do another activity, it doesn't matter. I have to treat it as if I am SAVING money, rather than LOSING money.



PATIENCE


This will be the hardest of the 3 cornerstones for me to deal with. I've mentioned many times on this blog that impatience is my biggest issue, personality-wise. It's not just a trading problem but a general life problem. I just don't have any patience for anything and it has set me back thousands of pounds and many months during my trading apprenticeship. It's the one issue that time and time again, crops up as the reason why I make mistakes. Basically, I jump in too early with trades, try to force wins when opportunities are not solid enough and play too many games.

This is down to a number of things - anxiety, boredom, over-enthusiasm, lack of focus. But even when I'm 100% focused, I still can be impatient. How do I become more patient? I must focus more on the discipline required to follow my entry points to the letter. When I use correct entry points, there is rarely an issue because I know that I will 99% of the time, use the correct exit point too. But when I use the wrong entry point and things go against me, that is when I get frustrated and start to leave the trade to run past a safe exit point. So the key here is to stay relaxed, don't expect to make money from every game and wait for clear opportunities that fit the strategy. Get the entry point right and the correct exit point will follow. I also think getting back to playing chess regularly (a game I love but rarely bother to take the time to play) and a return to some hypnosis sessions will benefit my patience skills.




DISCIPLINE

Specifically this relates to redding-up at the 25% loss mark. As I've mentioned recently, if I had redded-up at this point in all the games I'd traded over the previous 3 months, I would have been £3000 better off. That tally has gone up even more this past 2 days. So why do I fail to do this and lose full stakes still? I think this issue would not even exist if I sorted out the first two cornerstones. When I'm focused, I hardly make any mistakes, therefore, the issue of redding-up is non-existent. I will ALWAYS red-up as long as I've done the right things. But when either the focus or the patience is missing, the discipline tends to go too. So if I take care of the F and the P, the D will follow.

However, I need to accept that there will be the odd occasion where I lose focus and patience. At the moment, I can't accept those mistakes and that is why I don't red up at 25%. Once that tally goes past the 25-30% loss mark, I tend to just let it ride all the way, so it's imperative that I do just end the trade and walk away. So my plan here is to accept that I'm probably going to make mistakes and when I do, to red-up at 25% and LEAVE THE GAME.


So in essence, all 3 cornerstones require me to make a mental change in some way.

1. Treat not trading a game as if I am saving money rather than losing it.

2. Learn that waiting for solid entry points will lead to actioning correct exit points.

3. Accept that I will occasionally make mistakes and shut down any trade before it reaches that point of no return (-25% of the stake).



95% of the time over this past 2 weeks, I have achieved these goals. It's just that final 5% that lets me down, that one or two trades per week that get out of control. As of today, all that changes.

3 comments:

  1. Don't you just love it when a plan comes together! :) Although I wish I read this earlier in the day before making yet another mistake due to losing concentration! Luckily I had my biggest win of the season today too! You'd think I'd be happy, but that mistake puts a big dent in it!

    Perhaps you are right with regards to trading too much and I love the idea of "treat not trading a game as if I am saving money rather than losing it". I don't trade 250 events so I do have quite a bit of time off so don't mind so much trading the nights when required, although it does take its toll.

    So how did the FPD work for you today? Hope all went well?

    My day finished well, not due to trading but due to seeing Monfils DESTROYED by Djokovic! I hate that guy, love that guy, but hate him more! Great to watch, horrible to trade, literately my worst player for trading. Dam you Monfils! Dam you with your fluffy hair and your silly knee bracelets!

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  2. I actually love Gael Monfils, he's my favourite player! He's actually much more reliable these days than he was a year or so ago. You didn't think he was going to beat Djokovic though, did you?

    Just writing about how the first day went now.............

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  3. Of course not, but didn't see him getting destroyed as much as he did. It was an exhibition in the end with Djokovic clearly giving him a game at 5-0 so as to save the bagel. For me, Monfils is overrated, entertaining to watch sure, but just being entertaining ain't going to win titles (reminds me of the current Arsenal). With just 3 titles to his name (all 250's), he is under archiving considering the amount of talent he clearly has.

    Look forward to reading FPD - Day 1.

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