Get Stronger

The past week wasn’t a particularly great week for me, trading wise.

Made a few poor decisions, got greedy/impatient and jumped into a few bad trades, took trades which did not perfectly fit my strategy, and needless to say, I ended the week red.

The only thing I’m sort of thankful for was that I did not lose that much.

I mean, don’t get me wrong, it was a significant overall loss nonetheless, but it could definitely have been much worse had I not practised risk management and limited the amount I would lose per trade. (This is why it is always very important to practise risk management in day trading, because it can go really wrong really quickly.)

Bad Things That Happened This Week:

  1. Got impatient as there were very few good setups this week, and ended up jumping into some bad (i.e. losing) trades.
  2. Got greedy when I saw some setups with strong trend indications, and jumped into them even though they did not perfectly fit my entry criteria.
  3. Ended the week red due to poor decisions, and it is not a good feeling.

Good Things That Happened This Week:

  1. Faithfully stuck to my intended stop-loss for each trade. Did not hesitate to exit the trade when my stop-loss target was hit.
  2. Got less and less emotional with each losing trade.
  3. Through my losses, I analysed them and came up with significant adjustments to my strategy which I’m confident will increase my win-rate.

It is obvious that I still have a lot of learn in this game, and I still have a long way to go.

Through my struggles this past week, I came up with a number of adjustments which I’m confident will increase my win-rate (based on the results of new backtesting).

I’m spending this weekend going through my mistakes, analysing the new adjustments that I came up with, and training myself to be an even better day trader next week.

You just have to be resilient in this game.

Take your knocks and get stronger (while not blowing up your account).

Note To Self

The markets can tease you….if you are easily seduced.

The markets can frustrate you…if you are impatient.

The markets can humble you…if you are greedy.

The markets can destroy you…if you lack self-control.

But the markets can also reward you…if you are disciplined, patient, consistent and humble.

Biggest Emotional Challenges In Day Trading

Day trading is fraught with emotional challenges.

And it is these emotional challenges which stand in the way of us being successful day traders, because day trading requires discipline, patience and consistency…and emotions are the antithesis of all these elements.

And this is one reason why it is often said that robots make the best traders, because they have no emotions whatsoever.

There is no place for emotions in day trading.

Based on my personal experience, here are the biggest emotional challenges in day trading:

ScenarioInner Dialogue
Having a few losses in a row despite following your strategy perfectly.“What is wrong here? Do I need to tweak my strategy?”
Seeing that you are overall red for the day.“I hate knowing I’m down for the day. I want to at least break even!”
Getting marginally stopped out, only to see the trade go massively green once again.“I shouldn’t have placed the stop-loss there! I should have let the trade run a bit longer, then I would have won the trade!”
Choosing not to enter into a trade because it did not fit your setup, then seeing the price skyrocket.“Why are these trades always so profitable when I’m not in them?? Is there something wrong with my setup?”
Not taking profits when you could have done so, only to eventually lose those profits completely.“I should have at least cashed out some profits while I could!”
Not being able to find enough good setups in a day.“I should be trading more often so I can increase my overall profits! Why are the good setups so hard to come by?”

Trust me, these things happen to me all the time and I am still learning to deal with my emotions when day trading.

Not easy.