I didn’t do a lot of blogging in August. I was feeling beaten up by the markets and also that I was on the wrong track. Specifically, I was using limit orders to exit positions once a fair profit had been made. This made some money, but I knew that it meant I would miss big moves. I did in fact miss a big move in wheat — I was in early into the wheat spike, deliberately favouring it over corn and soybeans which also had a jump, but took profits early. That could have been a big winner. Also, it meant that I was focussed on smaller potential moves because I knew I would take profits if they came off — and thus my trading strategy was inconsistent with my big-macro-themes research process.

I took a personal hit when my latest budget showed a degree of overspend that seemed to make my trading project unsustainable. I have since arranged new accommodation and plan to give up my flat — which will be an unpleasant deterioration in my lifestyle but will save me a significant amount of money. I am also planning to make some regular income by doing some tutoring. In the pursuit of regular income I have also been testing some systematic strategies which may have something to say for them — much helped by Caspar Marney. I have not implemented any of my own strategies yet because, while they are profitable, I am not confident that they overcome their dealing costs.

I think a lot of my feeling low over the summer was the result of a badly sprained ankle, which ruined my plans to be in peak fitness for the start of the beagling season and was extremely frustrating. It is amazing how much difference it makes to feel you are coming back to trading fresh from positive experiences in other ventures. I have not really understood before how much the ability to think clearly about the markets and about what one is supposed to be doing in them varies with general mood. Drive and enthusiasm turn out to be crucial to discretionary trading, not because they are sufficient for success, but because they are necessary for the kind of concentration that the game requires. At least I have done the right thing by trying to get away from the markets and not trading.

Now I have had a holiday and have come back to the markets feeling refreshed. Everything looks much more positive and opportunities just seem to be there, rather than feeling forced. I have entered a couple of trades this week. I hope that I will be able to get fit again and each run will feel like a “win”; tutoring, if I can get into it, should also provide “wins” when sessions go well.

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