Yesterday I lost my discipline. I refused to admit I was wrong and decided to “give it more room”. A recipe for disaster. 5 losing days in a row and I’m losing confidence. My levels worked well, it was just that I invented trades.
I’ve been debating about something for a while now and that something is scaling. I know many trades make great use of scaling, but I think it’s a very complicated and difficult thing to master. And right now I think it’s holding me back. Here’s why: On the double top at 1314 I got short with 2 lots. Looking at the bare-bones chart here, the obvious target is the blue support level around 4.25. So what did I do? I took a 2 pt scale when price was holding up around 1312. So when price got to my target I only had 1 contract. In my view this is severely cutting that winner short.
I’ve written about scaling in the past so I don’t want to go into all that again, but to summarize: I think the first scale should be profitable on its own, if it’s not then it’s hurting expectancy. Sometimes people are willing to sacrifice expectancy to have a smoother equity curve or psychological comfort. I feel like I don’t have enough expectancy to give up some of it.
So in light of my current losing streak, I’m going back to 1 lot. I will use max 2 pt stop and I’ll go for 4 pts minimum. And I’ll avoid scratching (another seriously bad habit of mine) and I’ll see how that works out. In order to do this I must not invent trades. I must trade at my levels and only trade when the next level is farther than 4 pts away.
I’m not going to worry too much about my P/L or stopping out. I’m going to let the trades play out and see if this will work.