Hi Inspector,
The current ES day trade system I trade has fewer trades than what I like I think. It trades at most 2 or 3 time a day, and no trades on some days. It is designed to catch predictable trades, not necessarily the largest point move. Therefore the way to trade the system is to trade size when it is due. But these days do not come often, and right now I don't trade large lots yet.
I trust my system (at least 90% I think). I deviate from the system because I trying to out do the system.
- There is an impatient part of me trying to recoup some of my loss that I have accumulated prior to using this system. I like to be "in the action" because I equate being in a trade with the opportunity to profit. My system trains me to look at risk, and I know up till now, I often see the "profit" of being in a trade more than the "risk".
- The days I over trade are those days 'after' a big point move that I missed. There are many days we will get very large point moves, and my system actually aren't trading during those days, partly because days with large point moves are by nature, unpredictable. This is what goes on in my head "I saw those moves based on other analysis, and/or my instincts, but I didn't take them 'cos I followed rules. So I guess I should trade based on these analysis today." As suspected, the day after a large point move we usually get a rest or even a bounce, and I would usually start getting out of sync with the market until I get a weekend when I recoup and rethink. Sometimes it takes me more than a week to get myself straight.
There is no doubt best days I have are days when I only trade this system, and I earn "enough profit". I think enough profit for me is more than $500. For example, Wednesday was a great day for me except I traded very few contracts. You saw in my note how I disobeyed my rules and scaled up my contracts. By the end of Wednesday I already pretty much can guess that Thursday I was going to to over trade 'cos I didn't think I earned enough on Wednesday. Then come Thursday, I still loss control.
I can pretty much point to the impatience to recuperating my loss as the ultimate reason I break rules here and there. The fact is if I remove the days I break rules, it is quite clear that the small profits I have done would bring me much further towards my goal. The days when I break rules are what is setting me back from reaching my goal. If I can only remember that every time before I break a rule.....
Thanks for making me write this down. I again understand more of my own behaviors. That can help in fixing that monkey in my mind.
Have a great weekend!
Nimble
