Back in the Saddle

Back in November 2009 I made the decision to stop trading. I had been working at it for over 2 years, and had managed to lose a boatload over that time period. It was time to stop, time to regroup, time to rethink. It was a painful decision because trading – in so many ways – is a perfect “job” for me. It fits me in a thousand vital ways. But it wasn’t fitting me in one very important way – making a living.

I stayed away as long as I could – over 3 months. But I have decided it is time to get back on that pony. This time, I am a lot wiser. I learned a lot in those first two years, but the main thing I learned is that I was not being a professional trader. So what am I going to do differently this time?

I am going to be certain that I have an edge before I start. An edge is a strategy that has proven through testing to perform with positive expectation. I never had that. I was a seat-of-the-pants trader, (if I am going to be honest about it.) Oh, I had indicators and charts and indexes and all that stuff, and I could explain what they meant and how they worked, but what I did not have was a genuine, mathematically and empirically proven edge.

I am going to be prepared every day. I convinced myself that pre- and post-market preparation was something some people needed, but not all people; I convinced myself that I was one of those people who didn’t need. I was deluding myself.

I am going to have clearly defined and established risk rules, and will follow them. I had risk rules, but they were squishy, and in that squishy-ness, there was wiggle room for following the rules. And the wiggle room killed me.

I will treat my trading as my business, not as a hobby. The difference is the difference between a really good weekend scratch golfer and golfer working through Q-School trying to earn his card.

I will have specific, clearly defined ways of giving to and helping other people aside from my trading business. One of the things I struggled with that first two years was becoming absorbed in my trading to the exclusion of all else. That made me feel selfish. Whether I was actually being selfish or not is irrelevant; it was a feeling I am no longer willing to live with. If I have to work on myself to succeed as a trader, I am also going to give myself to helping others as well. It’s a matter of mental, emotional and spiritual health.

I will have specific, clearly defined ways of giving to myself. I am really good at putting my head down and plowing through, but it is that exact same characteristic that led to a physical breakdown several years ago. I must provide for my own well-being physically and emotionally if I am to succeed in my chosen career.

March will be be given to testing and proving my edge. If I have proven the edge, and if I have implemented my other rules, then I can go live in April.

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