For this journal, I'll be trading the NQ, using fixed trade management of a -54 tick stop and +74 tick target, and moving the stop to breakeven at +50.
I have learned over the years that I have some real degenerate gambler tendencies, and that emotionally I simply cannot manage both my entries AND my exits. However, when I lock that one side of the expectancy equation and only focus on my entries and win rate, I do very well (if I stick to the plan...)
The cycle that I have been going through is this:
1. Trade with fixed trade management and experience what it's like to have a steadily rising equity curve that is achieved through calm and organized trading.
2. Experience my first drawdown- which can sometimes just be hitting one daily loss limit of net 4 losers- and begin to doubt this style of trade exit. I then begin to allow more discretion on my exits, which inevitably leads to allowing more discretion on my entries. I start to be much less selective on entries, since mentally I'm thinking "I can just exit right away if it doesn't go in my favor"
3. I then have huge losses as a result of emotional trading taking over, breaking my money management and position sizing rules. Meanwhile I see how sticking to the original plan would have taken my equity curve to new highs had I just stuck with it through the drawdown.
4. Go back to #1 and start the cycle over again.
My goal with this journal is to use the accountability to help me break the cycle and stick with my plan through the drawdowns. To be able to learn to accept having a losing day sometimes.
I've seen some really incredible success recently when sticking to the plan, and at the same time some really incredible failure when I don't. To give some context to the extent of each of these, just last month I had grown 20 Apex and 4 Bulenox funded accounts to over $175,000 in total profit. On March 15, I could have withdrawn $2000 from each of the 20 Apex accounts, but instead I went on tilt and blew every single account on that same night. My chimp had fully taken over.
However, the bright side is that I experienced the scalability and earnings potential that is out there, and also have grown in my confidence to identify an edge. I did manage to withdraw $10,000 so far this year from those prop firms, so there was some amount of reward, however nothing compared to what I could have withdrawn already this year had I not lost control.
Last month I got a taste of what real trading success can look like, and I'm ready to get back to that level and stay there. As much as I want to trade with more discretion, I know that I got to where I was using fixed trade management, and that it works for me.
A few months ago, on probably my 300th reading of Trading in the Zone, I came across something he wrote that had never meant anything to me before, but all of a sudden it did.
In Chapter 9- The Nature of Beliefs, he says:
I can now answer the question, "What is the Truth". The answer is, whatever works.
I now know that this is basically the philosophy of pragmatism and I've decided to apply it to my trading. When I look back at all my trade logs, I can see that fixed trade management is the only thing that has worked for me, based on my particular weaknesses. It's not a flashy way to trade, but for me it's worked.
Now I just need to stick with it through the inevitable drawdowns along the way.