My plans of increasing size were derailed a bit as last week was a losing week and the one before it was flat. I can attribute my regression to a few factors:
- Trading 2 lots made me more risk averse since my size was bigger
- I started getting lazy with entry timing by entering half position and planning to add on to it at a better price
- I scaled my first lot early in several cases which effectively “cut winners short”
- In a couple trades, I neglected to keep the tight stops I’d been using due to overconfidence in my read
The last point was the biggest factor. When we broke out of the multi-day trading range to the upside, I expected follow through and bought pullbacks and give it plenty of room and added to my position. This is my old method of trading. It’s not compatible with my new plan. Had we had continuation I would have had a major win and done great. But it didn’t. And I took a big loss. Then then the next day we broke to the downside and since we failed on the breakout higher I expected us to break down to 1297. I shorted pullbacks, scaling in to build a large short position that I eventually capitulated. Double whammy.
This was good punishment for reverting back to my old methods and gives me more confidence in my new plan. Had I followed the new plan I would still have had 2 losing days, but the losses would have been minimal.
At this point I don’t want to go to 1 lot again because I think trading multiple lots gives a better edge (can stay in longer). So I will take the best setups with real money, ideally 1-2 per day and the rest on sim. Two losses per day will limit my daily loss to around $250 and I can live with that. So I shouldn’t have fear right? I’m sure I still will. But I hope it’s manageable.
For the sim part, I’ve been abusing sim lately, using it to control my urges of wanting to put on risky trades. I need to curb that. I need to treat sim as real money and be very selective. So my focus for the next two weeks are to have profit results sim & real. I need to learn to be patient and sit out when there is no edge.
So a bit frustrating the last two weeks but I’m still confident in my approach.