Thank you to Trader Rich, over at Forex Project, for discussing one of my comments. He, along with a chap called Rocko, have commented that it may be appropriate to take a temporary break from trading. My response to Trader Rich:
Trader Rich, thank you for your comments. Your advice to ‘stop now’ is wise, and it was a part of my trading plan – to take a break when things got bad. The plan was sensible and logical, but I have ignored it. Now, I can’t bring myself to stop trading.I am at the stage where I need work through this ‘darkness’, one way or another. Family members have offered to lend me money so I can continue, but that would be even more foolish (if that is possible). No, I must either run down the remains of the capital or ‘make good’ and find some kind of redemption.
Rocko also comments that it may pay to ‘do some more research, learning, self hypnosis, and develop a strategy that would allow you to trade confidently’. My response, which also discusses how I got to where I am: The idea of self-hypnosis is relevant because I created a profitable system but I lacked the ‘will’. Actually, I suppose it is less of a system and more a of ‘trading approach’. I will write more on this as the days go by, but the rub of it is that the approach produced nice profits. Then why the demise? I used the profits to throw money at new trading experiments knowing that I always had something to fall back on (my core strategy). My thinking was that it wasn’t prudent to rely on one approach. I was wrong. I should have allocated all my capital to this approach. When things started to turn sour I returned to my original trading strategy but allocated so much capital to a handful of trades whose outcomes, how should I say, fell on the wrong side of the ledger. Things quickly spiralled out of control and I find myself here. Now my core strategy may be wobbling over…if it is, I am done for.
Allan Collins, a trader with close to 30 years of trading experience, offers the following useful advice: ‘Take smaller positions with risk levels at levels where you would be clearly wrong.’ My response:
Allan, your sage advice, backed up by your many years of experience, is heeded and appreciated. Smaller positions and wider risk tolerance was the way to go. On balance, my account would have been much stronger if I had followed this simple advice. I will bear this in mind in the future, if I ever return to trading.
For now, however, this is not an option. Because my core strategy only involves a handful of trades every month, and because I am coming from a very low base (£3500), my hand is forced. I may be setting my self up for failure but I feel I have to take big risks because of where I am in the game.
It seems as if I am being ignorant of all the advice being offered. This is not the case. It is just that I am so deep in the hole that the desperate situation demands desperate measures. If I find a way out of this hole I will be sure to heed all these wise words of wisdom.
For sure, it is helpful to hear the supportive voices of other traders in this otherwise solitary activity. Thank you to all.