Monday, January 01, 2007

My Trading Resolution

Hmmm..... I wonder if I have been reading TyroTrader's blog too much. Now that he's written a very insightful post about his trading resolutions for the New Year, I feel some sort of bizarre pressure to "keep up with the Jones's."

Read Full Post.....

Well, I have only one trading resolution and it is a pretty obvious one, which in my estimation the achievement of which will single-handedly save me some rather $eriou$ coinage - stop making screwUps! However, I realize that this is not a SMART (Specific, Measurable, Achievable, Relevant, Time-bound) resolution. I need to start from where I am today, here, and now, not from where I need and want to be. So I will turn my idealistic goal into a SMART goal as follows:

"My goal for the New Year is to at least double my capacity for mistake-free trading."

What I am after here is not 100% mistake free trading. However, I am also not satisfied with status quo, nor with the painful loss of trading account equity. What I am after is a better understanding of the habits and mentalities that lead me to make the mistakes. Knowledge is power, and I believe that the increased understanding leads to self-awareness, which will lead to the attitude change necessary for the increased capacity.

Even since I started this blog, I have recorded 18 screwUps. That works out to an average of 6 screwUps per month (quite a bit of leakage). Achievement of the goal is as follows:

1. Criteria for mistake free trading is simply:
100% my Trading Rules were followed for the whole trading session.

2. Break down the goal as follows:
achieve an avg of 5 screwUps per month by Mar 2007.
achieve an avg of 4 screwUps per month by Jun 2007.
achieve an avg of 3 screwUps per month by Sep 2007.
achieve an avg of 2 screwUps per month by Dec 2007.

3. Measure progress as follows:
After each screwUp, in addition to the usual recording of the screwUp into this journal, I also plan to use the performance report to log the data on the screwUp.

To add more "structure" to this goal, I will have to say that I can't just completely stop trading for the sake of achieving this goal - that would defeat the purpose of this resolution. And I can't allow for the mindset of "oh, I broke a new record for time passed since the last screwUp, so now I can go and screwUp!" This mindset is kind of a loophole in the system - it doesn't actually break the spirit and intent of my resolution, but I'd be cheating myself if I started thinking this way. Again, setting this goal is really intended to capture, expose, and understand my mindset(s) and habits that lead to trading mistakes.

One final comment - to be honest, I find following rules so anti-INFP. However, for the sake of my trading account, I must stop breaking rules because I am partly INFP, and start adhering to rules because I am partly INFP.

No comments: