The World Money Show in London in late October gave me an opportunity to do some stuff I’ve never done before. As well as being involved in some great discussions on trading, I was also invited to take part in a couple of video interviews.
In this video I discuss the importance of keeping a trading journal and how it can focus the mind and improve the disciplines. This is an area of trading that I am very passionate about. If you are serious about becoming a successful trader, then you need to consider keeping a trading journal.
I looked at this video and you identified the psych problem where you get a few wins and then become protective of profits. You described my situation spot on. I know its only a small amount but I grew my $100 FX account to $127 in two weeks then got scared of loosing what I gained which caused me to close winning trades out missing 100s of pips but holding my loosing trades to the stop. Consequently I also just watched as huge trades passed me by because I was afraid of loosing a couple of pips. Being overly protective can be destructive to your trading account and demoralising because after the even you tend to beat your self up. Thanks, will keep an eye on your blog.
Hi Lance,
You describe exactly the same emotion’s that I have. We are not alone in protecting our winnings – and you are correct, it can be destructive. I try to deal with this, but simply following the system. It’s harder than it sounds to do that, but it really is the only way. I also have a rule whereby I don’t trade if I have 3 consecutive losers in the same month. This helps me to get my mind straight should I start to give back what I’ve made. I also have 2 strategies, one more mechanical than the other. The mechanical strategy also risks less than the other strategy. If I start to get too emotionally involved in my trading, I’ll switch to trading the mechanical, lower risk system in order to overcome my emotion. It doesn’t always work, but I am beginning to see the benefits.
Good luck in your trading.