Trading Journey: Pushing Too Early

This blog post is part of a trading journey series. For previous chapters, follow the links below:

As the summer of 2021 was ending, I was happy. I have managed to get out of the terrible Gold carnage, my trading become much more consistent, I have solved personal issues in my life that were holding me back and my health was finally back. I was happy, full of energy, and in a good spirit for the months to come. It was a combination of the right circumstances, persistency, luck, and skills that got me through the summer. I remember thinking one summer night coming back from the successful day of trading: “Now the trading career will accelerate and I will make leap progress. The hockey stick P&L will unravel in front of my eyes. Well, I was wrong again. The Autumn came.

It started to roll slowly. Losing day here, losing day there. At first, I have ignored it but I have not yet addressed it deeply. Given the experience with the disastrous Gold trade, I was aware that I must address it in order not to repeat the same mistake. I took some moments to review what was going on. I have clearly identified that the rhythm of the market has changed and I have not adjusted my style. I did some tweaks, highlighted what to focus on, and kept going. But even with the tweaks, I felt that something is still not right. Wild swings of P&L, up and down were hammering my mental state. I kept going. Given the time and effort I have put into the trading so far, I hoped that at this stage of my trading career I would reduce the large P&L swings already. Not eliminated, but reduced. Although we theoretically know that P&L should not be our objective, we are still humans playing the performance game. Regardless of any system or process we build, there is always P&L at the back of our minds. Although I was not repeating the same disastrous mistakes as in the past, my P&L curve was more like a rollercoaster than a path to consistency. My profit and loss curve was the signal that I am clearly doing something inconsistent in my trading. I knew that if I get rid of this inconsistency in my process, the P&L curve should reflect it. I have noticed that the harder I tried, the worse results came back. And that was the problem!

Going through my debriefs there was one re-occurring pattern. I have observed, that I simply pushed my trading way too much, way too early, and way too stubbornly. With the positive summer behind me, I got the feeling that now I have finally “cracked the code” to consistency and now I can push more. I wanted to grab it all. By digging deeper I have noticed that my scaling was way too big and inappropriately managed the second I have entered a trade. Because I have drunk the Kool-Aide of my “monumental rise” (a bit of sarcasm) over the summer, I have felt I can push for more. Don’t get me wrong, there is nothing wrong with pushing more, but when we push, we must push on all fronts and not all fronts might be ready. Was I ready to push on all fronts? No! On trades with high conviction, I put much bigger size, but I was blind to any invalidation price action. I held longer than I should, I have averaged at places where I should get out. I simply was too convinced that I must be right because hey, I am ready to push for more right? Given the size, this had a damaging effect on my mental state and consequently the consistency of my trading.

Looking back, the biggest takeaway was that I pushed for more, way too early at the wrong places. I wanted to move to the next level way too early. My goal was to finally make it big, it was never the consistency. Brutal honesty is critical. Every time we feel it is time to accelerate, we must evaluate if all aspects of our trading are ready for this acceleration. We must be brutally sincere about the direction where we want to get and build processes around it. Trading is the process of slow gradual progress where things happen rather organically when we put in the effort in the right process and we are ready. Any forced action will provide us with instant feedback and tell us if we are truly ready or not. I was not, but gained valuable lessons into the wintertime, where I could test my more sincere goals. But more about that in my future post.

Thanks for reading. Trade well.


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Written by Jaroslav Kohout

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