I lost $7430 this week.
After deep reflection, I am content because I have learned a lot about the inner workings of my mind. The purpose of this long post is to encapsulate and reinforce the lessons from this week so that I can claim a win from this loss.
The previous week, I was on fire. Making almost all my money that week trading one particular OTC stock.
This week, I got cocky and gave back half those gains on that same stock on the backside, trying to build into a position on multiple red days.
That's not a setup that I have found to be profitable. What's more, it was a total drain on my mental/discipline capital for the entire week. I then found myself sizing into nonsense trying to break even.
Thankfully, today had some high quality setups that allowed me to remember what it feels like to be in control in a trade. It reminded me of what my A+ setups are, and it showed me just how far I deviated from those A+ setups this week. I was shocked to see just how far I had strayed.
Studying my own mind when it comes to trading has been an interesting and eye-opening experience. The smallest chink in the armor of discipline can lead a person to commit increasingly self-destructive behaviors until that person is desensitized or willfully blind to the damage he is causing to himself.
The next step in my development as a trader is to notice when that mental armor is compromised, and to stop right away and fix it.
I have come to realize that within my small niche I am very profitable. But when I deviate from that due to mental weakness or undisciplined ambition, I introduce unnecessary losses into my P/L.
My monthly P/L could have been double or triple what it is right now if I had been in control of my less desirable trading tendencies. I would have avoided some big losses that directly impacted my P/L.
Big breakthroughs as a result of this week's trading:
1) I could double or triple my P/L simply by rejecting sub-par opportunities altogether. I cannot achieve that same kind of growth just by hunting for more winning trades or by increasing position size. Trading less would improve my P/L substantially and immediately.
2) Human nature is a very powerful driving force that sometimes causes us to commit acts of self-harm. One needs to be keenly aware of its presence at all times in order to control it. It's an easy thing to forget about when you are on a hot streak.
Armed with this new awareness, I am ready for the back-half of the trading year.
Received 7 Karmas