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(Good) Trading Is Boring

When you start out trading, it’s pretty much all about the excitement. You watch every trade tick by tick, gazing at a chart ticking up and down together your P&L. You’re long. When it goes up, you feel excited because you’re making money, if it goes down you’re excited because you’re losing money. But boy you’re making sure you don’t miss any of this. You sit there and gaze at that chart as if you would somehow be able to influence it’s direction. You don’t miss a single up- or down-tick. Up-Tick: Pleasure. Down-Tick: Pain. But it doesn’t really matter, as long as there’s something’s going on! Doing this long enough you’ll be quite exhausted at the end of each trading day and at the same time hardly excited by the rest of your life anymore. Actually, when you’re not trading, the only thing you’re excited about is the next market open. Now obviously, this is neither the path to long term happiness, nor to successful trading.

At this stage, without realizing it, you’re actually trading for the sheer excitement. You think it’s about making money, but it really is not. You’ll get into any trade you can somehow find a plausible reason to get in. Of course you’re losing money this way. Maybe you’re lucky in the beginning and make some but sooner or later you’ll give it all back to the markets. That’s simply the price you’re paying to get entertained by the markets. And as long as you’re aware of this, that’s actually fine. Other people go to the casino to get their kick, you go to the markets. That’s fine, just don’t fool yourself into thinking you can make any money this way. There’s a reason many trading platforms for retail traders look like a video game, the brokers know how they can get you playing. The more charts, the better…

I’ve been there myself, I know what I’m talking about. And now talking to traders who’re just starting out in my tutoring program I see and hear that version of myself in you. There’s that excitement in the tone of your voice…you can’t wait to place the next trade, you’re all excited about getting that kick again and are still having the illusion to make tons of money while getting that kick. For many this turns into a serious addiction that is hard to stop. And for some the only way to stop it is to never open up a trading account again.

Now I haven’t yet seen a professional, profitable trader who’s at the same time too excited by trading anymore. By that I don’t mean there are no emotions involved. I will probably never reach the point where I don’t care at all whether I make or lose money. But what gets boring is the trading itself. A professional trader already knows ahead of the trade what’s going to happen. He knows how to get into the trade, how to manage it and how to exit it. He’s just executing. It’s the same routine every day. Yes, as boring as any other “job”. Most of the time though it’s even worse, as there’s nothing to do. It’s just about sitting there and waiting for that something to happen…waiting for that clearly defined edge to show up in the markets to then take advantage of it.

Watching a chart without having a position on is quite boring isn’t it? Imagine 100 people sitting in a cinema, watching a 5 min chart of EUR/USD ticking up and down on the screen. They’ll have a hard time to stay awake. Now tell them they’re all long a million units in that market…changes everything doesn’t it?

For me the excitement comes out of (maybe) finding a new edge in the markets. It comes out of having a new idea for a trade setup or risk management idea I can’t wait to test. Sometimes I can’t sleep because while brushing teeth I somehow have that brilliant, sudden inspiration that get’s me all excited. Most of the time though it turns out as total rubbish. But sometimes it’s really something. And that really something can make a significant difference in my trading results. And that’s really exciting because it means making more money!

These days I probably reached an extreme point in my trading career regarding the non-excitement of trading. From Monday to Friday at 16:00 NY time, I open up my trading platform, update the data I need, check it for any flaws and run my systems. I then update the AlgoStrats:FX Dashboard to make sure those of you who’re subscribed to AlgoStrats:FX get any new signals at the same time I do. Once done, I check my positions and for a few seconds either feel pleasure (made money), pain (lost money) or nothing (no significant change). If there are positions to be opened or closed, I send the orders to the exchange to do so. I don’t need any charts to do this, all I see is the order book and my orders waiting to get a decent fill.

This whole process usually takes less than 5 minutes. Once done, I log out of the platform and make sure that I don’t see any market prices/news/charts for the next 23 hours and 55 minutes. Yes, I turn it all off. Right now I have no idea how the 4 open positions I have are doing. I don’t even know if they’re actually still open or not. And that’s a good thing. Watching trades won’t help them in any way, so why sit there and waste any time/energy doing so?

Now the less exciting my actual trading has become, the more, and the more good trading ideas I seem to get. Watching live Charts, market prices and your P&L simply is a terrible waste of energy and time. On the contrary, it will kill your ability to really focus and reliably keep you out of that creative mindset you need to get in.

So there are good reasons why I make sure my actual trading is as boring as possible, give it a try! For the next couple of hours I can now focus 100% on working on a couple of new ideas I’ve written down last week…and some of them look pretty exciting! ;)

Happy Trading!

Marco

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Sunday, 22 October 2017

Derivative transactions, including futures, are complex and carry a high degree of risk. They are intended for sophisticated investors and are not suitable for everyone. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results, and all of which can adversely affect actual trading results. For more information, see the Risk Disclosure Statement for Futures and Options.