No pain no gain. We've all heard it before, whether it was while working out, making that difficult decision, or staying up late to finish that project for school. Well this saying holds very true in trading as well and we were reminded of that in the live room today. Today was sort of a milestone in the Live Trading room. Why? Well because it was the first time that I had it open on a Monday. Honestly I didn't know what expect since Monday's historically known to be slow, but then again with the way everything has been as of late it feels like anything can happen. Going against the notion that Monday's are slow days we opened up the start of the session with two at market trades. As the second hour began we entered a third. As I told the traders in the room, today seemed like one of those days where the market would decide to test our trading discipline because we sat and watched all three trades bounce up and down in a range over and over again. One even tried to stop us out multiple times. However, we stayed true to our professionalism and with the last 5 mins of the session one of the trades finally broke out of it's channel (if we can even call it that) and hit our first target. It was funny because I wasn't even paying attention to the actual pair at the time, I simply saw an onslaught of message saying "Ring the Register." (I ring a cash register sound every time we make money in the room). Soon after the room closed that same trade continued to rollover and hit target two, along with one of the other trades hitting it's first target. It wasn't our most profitable day in the room, but exciting none the lesson because during days like these, it really feels like you're earning your money.
"Trading is simple, but not easy." Whoever said this hit the nail on the head. In fact, I would say that this is one of the key factors that separates successful traders from struggling traders. After all (as a member of the Live Room said today) if trading was so easy then we all would have made a million dollars yesterday. One of the hardest yet most crucial aspects of being a successful trader is maintaining a high level of focus. For longer term swing traders, this means consistently reviewing your charts and adjusting your notes due to the most recent changes is price action. For day traders... it's a little tougher than that.
One of the reasons I started out as strictly a swing trader (1 hour to 4 hour charts) was because those timeframes really gave me time to sit back and think about my analysis. Since I was pretty new to the concept of technical analysis I would constantly have to refer to my notes when analyzing charts. Because I was on the longer timeframe charts I would have hours or even days before my predicted moves would occur so it wasn't a big deal. However, if you're a day trader then you're well aware that we don't have that luxury of time. I've only been day trading for about six months now, but in that time I've noticed that the level of focus required from me was a lot more than what was needed before. Although, I'm using the same techniques and strategy it's still a whole different beast. To be a successful day trader, you need to be on point at all times and today I wasn't at my best.
Although it seemed like a good day in the Live Room today (despite our disappointing GBPAUD debacle), I was pretty upset because I missed out on two trades that would have netted another 100pips. Now when I say upset, I'm not going to beat myself up and get discouraged over these two 5min trades. I don't get upset because of pips lost, I get upset because these were two opportunities that I should have been in and simply missed due to lack of focus. Whenever I make a trade in the market (win or lose) I like to go back and review it in order to see if I could learn anything from it. When I went and did this today, I noticed that one trade was missed due to me having a limit order 1pip too high, and the other was due to me forgetting to put in a fib retracement. Seems pretty simple right? Hey well after all "Trading is simple, but not easy."
Lastly, I friend of mine in the room also became pretty upset today because he missed an entry that went on to win. He said that the reason he missed it was because he was busy typing something on facebook. This friend of mine is a good trader, so I'm sure multi-tasking isn't anything new to him. But for those who are new to trading, especially if you're day trading, my advice would be to shut everything in the house/office down. No other internet site, no text message or phone conversations, and no TV. It could just be me, but when I used to do this I had plenty of times where I missed trades because I was distracted by something else. Even today, I still find it difficult to manage the markets while answering questions in the chat forum. Trading takes a lot focus, and day trading takes every ounce of it. So either you're all in, or you're not in at all.
P.S. I know a lot of you are going to respond by saying "Akil you're a good trader, and you shouldn't be so hard on yourself." Although I am very confident in my trading ability (as every trader should be), I do always strive for continuous improvement (KAIZEN) so although I do find myself making less mistakes in than in the past, I still strive to be as efficient as possible in the future and getting on myself is my way of motivating myself to reach that point.
Yesterday was a true test of character type of day in the Live Room. Usually finding a valid trade setup to enter during the first few minutes of class is a good thing, but today that gift was also a curse. Okay, it wasn't a curse to us in the room because we are all disciplined traders... or at least working to be; but for those who are not, I'm not sure if they would have been able to pass this test. Below are the charts of the three trades that I called and entered during today's session. EURUSD & USDCHF were retest of structure trades and the USDCAD was a 26-18 setup. As I mentioned earlier we entered these trades (EURUSD & USDCHF) at the very beginning of class (about 30mins in) and the market forced us to watch our positions float about half way to our profit taking levels and literally a few pips away from our move to break even points for the majority of our three hour session. Not only did it tease us at these levels for a while, but during our last hour the market actually went against us putting us within a few pips of being stopped out. With that being said we never flinched.
I've been through many situations such as this one in the past and I've learned the hard way to stay in my positions until they are either stopped out or profit is hit. And of course when I say the hard way I mean closing out of my position because I was scared only to see the market rally and hit the area where I should have been taking profit. However today we didn't make that mistake. We stayed true to our trading strategy and because of that we had profit targets hit on all three trades.
As I told the traders in the room. These are the days that you learn from. These are the days that when you think about punking out of a position, you look back and say "wait a minute, last time I held on and it ended up being very profitable." Sure, maybe the next time you may actually get stopped out. It happens, but if you trust yourself and more importantly your analysis, then in the long run you will turn out profitable. Trading isn't about how many great trades you take, it's about how many dumb decisions you don't make.
GREAT DAY in the room today Trader's. Days like these are when you really feel like you earned your money. After all who ever said this profession was easy.