Trade The Journey

Trade The Journey

Practice makes perfect, so they Say!

Top of the Morning.

A couple of weeks ago, I was on my way to the park to complete my weekly cardio routine. On my way there, I thought a change in scenery would help me get out of a rut. Nothing happened or occurred to place me in the rut I was experiencing, but I needed a spark.

So I decided to complete my workout at the beach. Running on the sand is a complete body workout and is used any most physical conditioning programs. It’s a great workout to test your physical limits. I train with a weighted vest, so my body and, most importantly, my legs have become quite strong.

When my feet hit the sand, I felt light and capable of running the entire distance from the parking lot to the next lifeguard station, which is about 2.5 miles one way. I ran the first half without pausing, but on the way back I began to get tired. I kept hearing a small voice saying, “Stop, take a breather.” My body was aching, and my calves started to burn with each footprint left in the sand.

As I closed in on my starting point, the voice grew louder and louder, but I decided to keep going. When I crossed the finish line, a smile formed across my face, and I immediately sat down to rest my burning calves. Yes, my body ached, and I probably should have taken the chance to rest because it took me close to three days to heal but I’m glad that I didn’t.

The last couple of years has left me with one lesson; there’s no limit to your success if you are willing to challenge yourself.

I like to share my experiences trading because there’s so much misinformation about trading and what it is. Very few people speak about embracing the discipline and work needed to be a professional trader. Even I was in denial about this reality.

Real improvement is made by becoming a consistent learner in your chosen endeavor. There’s been plenty of nights; I felt like skipping my nightly review because I was too tired. Some nights, I’ve fallen asleep on the keyboard, only to wake up an hour later.

Paper trading is a great way to practice and develop your instincts as a trader. Trading is part pattern recognition, part psychology, and complete risk management.

I couldn’t figure out how to apply what I had learned from books and youtube seminars. I didn’t recognize patterns, nor did I have a sense of risk management. I’d see a potential trade based on the bar color and the stock’s movement’s direction. By the time I recognized it was a bull pattern, I’d buy at the top of the rally.

Hoping it was a short pullback, I’d hold the position at a loss. I was always too late recognizing the pattern; now, I’m too early. After reading the book “Technical Analysis of Stock Trends,” I began to see chart patterns developing real-time. I remember the first time I recognized a chart pattern developing and how I felt.

Last week was the first time I recognized a pattern developing and traded what I saw and earned a profit with real money on the line. The chart pattern was an ascending channel on the 15-minute chart.

After confirming what you see, the next step is managing your emotions and implementing a professional trader’s discipline in closing your position.

Closing your position is challenging when you have no way of knowing what could happen next. Acceptance means accepting the possible outcomes and moving ahead with your decision anyway.

With practice comes trust; I’m happy that I lost money on every trade placed prematurely. I’m also lucky that my impatience to succeed didn’t seriously deplete my account.

Chart patterns don’t always play out the way you envision. The stock could have made a break to the upside, but it didn’t. As a trader, I focus on what did happen, which was the stock’s complete breakdown to the downside.

I was lucky enough to get out near the top. I didn’t hesitate or question my motive for closing the position, I just did it, and it saved me from blowing a profit. If only every trade were as smooth, trading would be a lot easier.

Every trade is different, and each trade’s feelings and thoughts should be assessed according to that particular situation. To give you an example, I have a trade-on that I remain hesitant to close. It’s a long-term investment that’s currently at a loss, but I’m optimistic about its long-term success. Long-term investing requires slower thinking and consideration as opposed to the fast-thinking involved in trading.

I say all of this to say that trading is a journey, not a destination. With practice, you can only get better and better, but it takes time. Two years of daily practice and learning all helped to produce that one moment.

This past week:

Wow, this past week money flowed out of my bank account quickly. Most of the extra money I have is automatically deposited into a few saving/investing accounts I currently have. It’s hard keeping this process of saving before spending going.

Sometimes, I look at items in the stores that I can’t afford to purchase or think about the places I haven’t been to yet and shake my head in shame. Since I can’t afford to wear my value or travel to see it, I’m forced to find it within. I’m facing a cash-flow crunch like never before and I have to make a choice between now and later. What’s more important, being happy now or in the future?

I can’t say that I always stick to a plan for the future, but I try my best. Sometimes that all you have during the tough times, trying your best. I try to keep this in mind because good things take time.

This past week deserves a grade of a “C” for steadiness.

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