A trader contacted me this weekend. He blew out at the end of the day Friday, playing for an upside breakout with big size. Many, many days of profit were lost with one hail mary trade at the end of the week.
How would our trading performance change if we had just one small voice of reason sitting on our shoulder while we traded?
How might our trading performance improve if we just had one more pair of eyes--one perceptive set of lenses--watching and filtering the markets with us?
Might we have noticed that the new highs in the ES contract (top chart) were not confirmed by NQ?
Might we have seen that those highs were also not confirmed by many S&P 500 sectors: XLP, XLB, XLV, and XLK?
Might we have integrated those pieces of information with a recognition of the range day to fade those highs and make our day?
Might we have noticed the broader market context of a market losing momentum day over day, making an upside breakaway move less likely?
How much success do we miss because we lack teamwork?
I posted recently about Danger Mouse, Cee-Lo, and the creativity that can come from the chemistry of good teamwork. How the whole can be so much more than the sum of the parts in a performance.
That Gnarls Barkley collaboration gets it. Watch their teamwork in the studio. Observe how it's all about getting it right that first time--in real time--because that's when you *feel* it. Note how one team member can surprise another by feeling it in real time, generating a novel outcome from a creative work.
How many people never find their greatness because they never find the teams that bring the best out in them? In marriages? In business? In trading?
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8 comments:
how very true. Alas, another pair of eyes is not an option for some of us (I suspect most of your readers).
Therefore, your posts and tweets are a blessed help in that regard, *especially* to us regular folks, the lonesome who trade all by our ownsome!
Good stuff as ever, Brett. Thank you. Perhaps someone needs to set up a trading/ investing dating agency. Having said that. there's is nothing like finding your mate in the 'wild'.
Dr. Brett,
Where would you suggest that someone find an online trading buddy. I live in a very remote area so finding a club nearby is not an option. A year or so ago you mentioned Stocktickr as a site to investigate but it seems to me that they've moved away from any sort of user collaboration.
Appreciate your thoughts.
That trader in question has suffered a big loss, in both financial capital and mental capital. He will need to learn from this situation and come out better for it.
There is enough excellent information and adequate support/feedback on the net. I am sorry, but there is. Anyone trading for more than 10 years can tell you that. Lots of noisy crapola also, but a trader can recognize the good from the bad.
The best buddy to a trader is the trader herself. A trader needs to remain engaged with the market. And she needs to be able to pinpoint when she breaks off said engagement, no matter how fleetingly. Once the break is identified, she stops trading and does various acts (perhaps even taking a nap, she could just be tired) to get her back into being engaged with the market so she can see the obvious, like non-confirmation with sectors. No amount of support can take the place of a trader who has structured her relationship to the market is such a way that she is her best trading buddy.
But I am not telling you anything you don't know, because I learned the above from you.
Hooking up with creative, intelligent, good people of course needs to be encouraged. Stocktwits tries to do that. Blogs offering support and encouragement and the ability to meet people who can jump start your creative motor can be found, thanks to the net.
Awesome article!!! That is why I love and appreciate the aspect of following some many good traders on Twitter..It is the data and opinions you provide that helps us navigate more thouroughly trading the ES and with less risk!! Working as a team in this way can only be beneficial for the group as a whole..Thanks for great posts and articles!!!
I resemble this story! My last "blow out" was in June. I, too, was playing for a "breakout day" when highs in ES were not confirmed by NQ, TF and the like (but I was not watching them). I wanted to "hit it out of the park" so I loaded up the shopping cart, and, of course, lost big.
In my case, one week's profits went up in smoke / 5% loss on my portfolio. And, fortunately, I have not done that again. . .
I think that in all cases, the desire to "lever up" on a single "big bet" trade should invariably be resisted.
If you have winning edges that pays off day in and day out, and that you are able to adjust over time to meet different markets, that is itself plenty sufficient to "get rich slowly" without taking undue risks and putting yourself into holes that then have to be climbed back out of. . .
The best buddy to a trader is the trader herself (?)
I trade with three others who regularly keep me in check. It is invaluable having good traders who will keep you accountable.
However I agree with Michelle B that all good traders must first be accountable to themselves. Without personal accountability no mentor, coach, trading partner, team player, etc will be of much help.
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