When I did my intro post some 6 months ago I said id be giving an insight into my serious hobby/second job as a futures scalper. I aimed to be posting this out as a summary for the week on Friday evenings, and I'm not proud to say that I have done a total of 0 such posts. I also aimed to review one of my other hobbies which is fine scotch, in this regard I'm also just as non-proud (is that a word) to say that I have done 0 such posts.
Now that SF4 is almost upon us and I plan to be there I want to rectify this and hopefully it will provide some talking points for anyone why ventures in my direction at SF4, .... in case you are wondering where / who I am, I will be the Brad Pitt / Antonio Banderas lookalike bloke stood not too far from @slobberchops, .... or maybe he likes to be called ORCAchops nowadays, .. he recently elevated himself to this new status so please be careful not to cut yourself on his Halo when u come over... but please come over.
As I am reviewing both things together I will start by telling you the first and most important rule in my goblin eyes about these two hobbies and that is not to combine the two.
Seriously never combine scalp trading while having a dram or two, ... you'd think this goes without saying but it's an easy trap to fall into.
You may even get to the stage where you follow this rule and have had a great trading day, and so leave your trading platform running, say to yourself that you've done for the day, .. possible go to have a pour of fantastic scotch, making it a special one as you've done so well. but now you've relaxed helped considerably by your pour but you've not left your trading screen.
You are effectively still interested in taking a trade, .. only now it may well be a punt. You will make a decision you will possibly regret and if you don't, and the market happens to move in your favour are you going to maximize your steak and make it an almighty trade? if you are clear-headed the answer is simple.
and it's a sobering "Don't be stupid"
If your a bit 'fuzzy' the excitement will take you.
one of two things will happen:
i. Your risky decision will come off and you will go into a state of temporary euphoria. I say temporary as I will explain in a bit.
ii. You will lose a significant portion of what you have worked so hard for all day. You will kick yourself for making this decision, and may even now due to your state enter easily into what is called 'revenge trading' ........ you can imagine its all downhill from there and that dram which started as congratulations to yourself will be a consolatory one mixed with tears.
If your risk pays off as option I, .. then the line between a drink/relaxing and trading will be erased thereafter. What you have done now is something that you feel is possible every time.
I guarantee that like a gambling addict on a roulette table you will be looking for that trade where the spin of the wheel at the end of a night will be something that becomes part of your regular trading strategy.
furthermore, if you've had a bad day the more desperate you will become for that 'gamble' at the end of the day. " to put things right" (another form of revenge trading) . and you will for sure flatten your trading account in a short amount of time.
If your thinking that this sounds like advice from the experienced, .then you would be right. if there are seasoned traders here you will know exactly what I'm talking about. any successful trader has to battle these inner demons ... its a case of can you learn before going broke.
ll explain further - One of the problems with being a retail futures trader is also one of the greatest allures of being one - basically, you are not accountable to anyone.
In a normal office work environment, you have certain guidelines to follow, you have a boss who you need to impress. So, regardless of how nice the weather is outside you won't crack a can of Carlsberg, instead drink tea or water,…. When you have a quiet moment you won't open facebook or youtube and spend 60 mins watching cat videos or Robbie Margott in a catsuit … (oops said too much).
As a trader you are free to do whatever you like for the most part, no one is going to bring you in to check if you are sitting there in your underpants or watching Youtube (Robbie Margott). If you want you can drag your laptop to the edge of the bath and try trading from there, … who’s to know? If you feel like a beer on this hot day why not?
All these are distractions which ultimately will leave you behind the curve and kill your profits and trading. Example - you think nothing is going on in the markets, you get bored so you open Youtube and begin watching whatever, and what happens - you miss a trade setup, or MORE IMPORTANTLY you don’t understand how the inside game is developing as you weren't with it.
In my earlier days of trading, I fell victim to all such distractions, but I'm specifically mentioning alcohol/beer in this post. Self-discipline is the key even when sometimes breaking the rules rewards you, it is quite simply one of those temporary moments unless you develop an unbreakable discipline no matter what.
I will post again before SF4, .. with how I overcame making rash decisions, .... if I could say anything to the intermediate/starter is that you must stick to the plan and makes notes of where you feel advantage was to be had. if you make a rash decision and it paid off, then just be grateful that you got away with it, next time it may cost you, over the long term it surely will.
My posts may be biased more towards a mindset of the trader as I feel that this is the most important aspect, at least it was for me, .. there are quite simply 100's of trading strategies out of the box that will over time produce profits, within certain market conditions, so how is it that so many fail at this. it is quite simply something really that cannot be put down to an out of the box if/then/else. for any extended period.
Trading is human psychology and for a successful trader ultimately understanding what is going on and taking action on it but more importantly be willing to accept you may be wrong and cut your losses is one of the biggest mental hurdles which separates the successful traders from the ones that keep failing and ultimately give up.
I will finish off this post with the dram of the week, its Friday and I deserve it...! (ok a few of these)
This is Bunnahabhain 12, not crazy expensive but soo worth it. It's complex without overpowering peat/smoke which can be a bit of an acquired taste that requires developing.
In the UK you can pick this up for about £40 per 70cl bottle. Look out for the black Friday sales coming up soon.
I would put this in my top 5. Let me know if you have any recommendations for me?
Until next time,.. best wishes and happy trading or dram sharing from the Goblin.
BTW - if Robbie Margott happens to chance upon this blog, .. why don't you come to SF4?
I will happily spend hours explaining this stuff over a few drams, ... :-)
if you want you can try to get me drunk for a chance at my kidneys. :-)
All pictures not with source tag have been taken by me.