Brain Teasers

Last night's trade went as though someone new exactly what my parameters were. It gave me an entry point, hit it and went up exactly 15 points. Then it retreated - luckily I was able to move my stop loss up to the break-even point. It promptly hit that. When I got up this morning, I looked and noticed that it ended up retreating just to the point where I would have been stopped out for a loss, then rocketed way up beyond what would have been a winning trade.

This kind of scenario could drive a person crazy if it happened very often. The things that go through your mind are stuff like, "Why does this always happen to me?" and other negative things, relating to how the trade went. I am actually thankful that I found this trading method, because it takes all the emotion out of it. I avoided a losing trade. There will be winners later that won't do this pattern. There will also be times where it won't quite get to the point where I can move the stop loss up, and it will get stopped out for a loss. It's just part of the deal.

I have a belief that this is the kind of scenario that keeps many traders from being successful in the long run. Even if they have a system, they don't follow it exactly, or get frustrated when the market seems to know the action points. And the ones that don't have a system - well, I don't see how those folks last very long at all. They get knocked out financially and need mental therapy to boot.

You have to always think of these kind of things as a test of your fortitude to stick exactly with your plan, without any expectation of a particular outcome. I know it's hard to do, because you are always talking to yourself, if only silently. You say, "Why would I be doing this if I don't have an expected outcome?" I believe you almost have to have a joy in doing the process...a joy in observing what happens in the market when you put a trade on, without needing to have it go a certain way. Your system should, in the long run, give you the result you are looking for - and if it doesn't after a predetermined amount of time, it's time to look for a different system.