So far 2012 has been an insane year. I started the year slammed with projects and didnt slow down until last month. After getting married in February, I’ve been really busy working on the next version of the MAP trading strategy. There have been so many changes in the futures trading arena over the past few years, and my ongoing journey to compete with computer algo’s and institutional traders has been on hyper-drive. The e-mini markets have proven to still be a great derivative to trade, and they’re still extremely competitive.
Even though I haven’t been able to trade as much as I’d have like to, the e-mini markets started the year in a dull trend for the first 3 months. During that time, I forced some choppy days that really gave me a beating. Thankfully, I anticiptated April to start giving us better volatility , and my good execution was rewarded. Each trading mistake is a reminder that trading confidence is a precious asset; much more important than cash.
My second major trading screw up was trading wildly right after I got back from hiking the appellation trail with my Dad. After breaking away into the wilderness for a week, my trading discipline pretty much went out the window the first day or two back. The worst part was the wild trading was in a great market environment! I should have done really well, but I let myself get in the way.
There’s a big difference between losing because of the market and losing because of personal trading mistakes. All we can do is strive to identify common errors and put guidelines in place to help keep us in line. I have a new rule that I won’t trade the first day back from vacation.
After going back and doing some market replay on NinjaTrader, I feel back on track. And since volatility is at the highest levels of the year, hopefully there will continue to be plenty of trading opportunities.
Another lesson this year is a simple, yet powerful cliche. Every time I don’t follow my plan, I get smoked. And the ONLY time I have success is when I take the right trades, under the right conditions, and execute with patience and discipline. It’s so obvious, but something traders at all levels of experience must constantly remind themselves. It’s something we used to talk about in 2007 when the Emini Academy was a small trading group, right on through when we “officially” kicked off our website in 2009.
Here’s a couple of some recent trading lessons from my trading log:
- Trade Skeptically – Always look at the “other side” of your trade instead of trying to root it on. Hunt for the reasons why it could fail.
- Let it freaking go – If the market conditions suck, then don’t try to force trades. Duh…
- Keep in mind the power of leverage and risks that came along with it – For example, one e-mini S&P contract is like trading about $65,000 worth of the stock index.
- Have fun and learn something every day – No matter if you make or lose money, make sure you walk away a more informed or more disciplined trader.