This is a continuation to a member question from 5.25.2015 on when it all 'clicked' aka came together. This is a really good subject and I have a lot to say on it and it just so happens I've had one too many coffees this morning and am in the writing mood.
This question gets asked a lot and I remember asking it myself when I was 24-25 just getting into the industry. The short answer before I jump into a few ideas is this: When I began to trust myself. I talked about this in the last member post, about trusting yourself and your process.
The fact is, in my opinion, is that you're going to always have losing trades and you're going to go into trading slumps, I don't care who you are, it's an inevitability. That's no excuse to say you don't get it, if you've had consistently profitable months or made it through your first year profitable then, in my opinion you've got it. Trading is no different than any business in life. In college, just after the market crashed and when I lost my job at Charles Schwab, I started a direct mail and printing company. There were times when sales were terrible and there were time where sales were amazing. What I learned was to stash the cash when sales were great because I would need it when they were bad. To me this is the same idea with trading. There are going to be days or weeks where you make your month and then times where you trade poorly. When you make your month in a week or day there are two things you should do:
1. Stop trading for the rest of the month.
2. Trade smaller and take profits quicker.
This brings me to the next point. Too many times traders get hung up on a system and get afraid to discretionary trade. What do I mean by that? When I was starting this company one of the things I did was review other futures sites testimonials: On blogs, the dreaded forums and other places to get an idea of what was going on and how to provide a better product. One thing that pops out to me is a post where a trader mentioned the instructor cutting his trades 'early'. I'm here to tell you this: If you ever cut a trade early and it makes you money, who cares! At the end of the month when bills come do the last thing you're going to be worried about is cutting a trade early and happy that your account has profits in it. For me, I do this a lot. Literally, last week on BABA I had 40 $90 strike calls at $0.35 cents a piece. This year my trading has been good, but not great so the day before they ran to $4.50 a contract I cut 20 at $1.00 (or abouts) Why? Because I was taking cash off the table. It's a confidence boost to nail a trade and after a few you carry that swagger with you, it helps. Was I mad about it? No. That's what separates an emotional, novice trader from a professional. There are going to be hundreds of setups coming so it doesn't matter and last, you're not going to get rich off one trade. If you get the time, read about Steven Cohen of SAC Capital, no not his insider trading, his style. He's known as a rapid fire trader meaning he's always taking profits, never really holding onto a position. Now, that's not really the Bullshark style (to take more than 3 trades a day) but you're not going to the poor house by taking a profit.
Final point on this. When I began to focus more on larger time frames and understand the larger patterns is when more confidence came. You then learn to tune out CNBC, Twitter, ZeroHedge and all the outside stuff that either distracts you or gives you a scape goat to blame for your own trading because your confidence builds. The thing is, and I'm being candid and telling you what these educators won't, trading is a grind, however, a very profitable grind. You just need to find what you're comfortable, risk wise and income wise and just stick with it, not jumping from product to product or method to method.
Hope this helps. Comment section below would love to create some dialogue on this.