I'm starting live trading after a very long delay. About 16 months ago we had a massive volcanic eruption here in Patagonia just 25 miles upwind from my home. In less than 24 hours my village was buried in a foot of heavy ash,. Fortunately no one was killed. It happened just as I was ready to go live. After the main eruption there was an active vent that constantly was throwing up ash. Many times I could not see the sky.
Finally, now this vent has stopped and I'm stable enough to go live. Unfortunately I have some bad habits I picked up on SIM (Ninjatrader) during the waiting period....so I thought I would write about my stupidities in a journal here, to expose my idiocy and hopefully cure it.
I probably won't be posting charts because I have a very proprietary method, which includes watching elliott waves and other patterns on very small time frames. This gives me a good feeling for the internal price dynamics that most people watch in one candle in the minute and higher time frames. The good dynamics are not always easy to quantify, but I know it when I see it.
I do CME Futures with NinjaTrader and CQG data feed. I'm into any instrument that has the type of patterns I want to trade. It does not matter if it is CL, NG, GC, TF, 6S, now 6A perhaps, as long as the dynamic is there, and the patterns.
I am finding that my biggest problem falls under what people call psychology...for me it is not psychology, which means therapy, et cetera.....it is about knowing when my internal state is lying to me...that is when inside I think / feel one thing and then I totally cannot see what the chart is telling me.
(DISCLAIMER: I notice that many people have no desire to talk about these things...please, only those who have something to contribute here reply...those who don't believe it is important...please do not post back.)
I did this today on Non Farm Payroll. First, I was not ready (this is another story....I need perhaps an hour before going on the charts for meditation / centering). Perhaps had I done the preparation I would not have made this mistake.
What it was is that I came into the room after walking away, and everything was in a perfect state for taking my strategies. Rather than go in, I said, OK, now I will wait and watch.
Then at 10:30 New York, of course the dynamic changes and everything (this time) stopped moving. THEN I TOOK A STUPID TRADE and got stopped out. I had to ask myself, why I took the trade, if my eyes could see that the chart was not right....and why I did not exit immediately and waited for my stop to be hit. Fortunately I am not into beating myself up, feeling guilty, or sad or unhappy. I just want to cure this problem.
And, I came up with this insight....by waiting and watching, and letting all those good trades go by, it built up a kind of frustration or energy in my body. I feel this as a build up of energy....it is not unpleasant, angry, or what is normally called as impatient.
I let the trades go by because I'm a newbie with cash and I want to be careful and wait for the perfect trade, but it seems to be backfiring on me.
Probably this watching and not trading created an elevated state of arousal of hormones and neurotransmitters in my body that then wanted to "do something".
Well, thus the bad trade....in this state, all candles look sexy.
Probably it is like being drunk on hormones / neurotransmitters...that is what it seems like.
Probably my biggest challenge is going to be to manage this internal state...some call it psychology....to me it involves my entire physical system...not just my brain or nervous system, and not just my emotions or thoughts, or my past personal history. It is more than that, and is totally present.
The power of the internal state to project outwards is amazing, and I suppose all of us have to overcome this method of self-deception. I am very aware of it now, but don't know how to manage or cure it.