There’s no getting away from it … trading is a process that plays havoc with our emotions.
We win money … it feels good.
We lose money … it feels bad.
And come the end of the month or end of the year, we’ve been thrown about by winners and losers that (without checking their records) most traders have no idea whether they’re financially up or down.
I keep meticulous records of my trading, yet come the month-end, I’m often surprised to find that I’ve had a winning month (because I feel like I’ve repeatedly given money back).
For most traders (even the most optimistic), the pain from losses outstrips the joy we get from winners, which is why we often think we’ve done worse than we have. And why it’s so important to keep objective records of our trading results.
What your curves should look like
I’d like to tell you that, once you’ve found a good trading plan and are established on the road to profitability that your profits will steadily grow, week on week. A bit like this chart I found on the internet …
I’m sorry, but the idea that once you get your trading plan in action, you’ll have ‘exponential profits’, let alone a smooth ride into the sunset, is a fabrication.
No matter how fantastic your trading plan, and how brilliant a trader you are – you WILL have losses.
At times, those losses will make you feel irritated … at times frustrated … and at times out-and-out wretched.
By contrast, a winning run will bring emotions like feeling ‘justified in our decisions’, or ‘a sense of security’.
It’s not the greatest emotional balancing act: ‘wretched’ for losses, vs ‘justified’ for winners. And that’s even the case when the winners outweigh the losses.
It’s little wonder that so many traders give up.
Here I’m going to show you a GENUINE profit curve from a trading strategy that I use every day, showing the real ups and downs it’s experienced over the past 15 months …
The one thing you’ll notice that I didn’t do at any point in that maelstrom of emotions was – give up.
As I’ve show in previous posts, there are ways we can actively halt losses during drawdown periods, but what’s vital to long-term trading success is that we don’t give up.
And the only way to keep ‘big picture’ objectivity is by tracking results. That way, when I’ve hit losing run (like I did in January this year), I know that this is just a bump in the road, rather than a bottomless spiral into poverty (which, to be honest, is what a losing run can feel like!)
The trading method I’ve shown above has a specially formatted spreadsheet journal which users can track their results with, including results charts, so you can put those up and down curves into perspective.
Without this kind of record-keeping, even a profitable system can grind us down, because, as we’ve seen, the pain losses bring outweighs the joy that winners bring (even if those winners are bigger than the losses).
I want to make this easy for you
No doubt you’ve noticed that I spend a great deal of time on this website banging on about what you should be doing … but I want to really help Trader’s Bulletin members find the best systems AND stick with them – even when there are downs as well as ups.
And I know that when you’ve forked out money for a trading manual, you already feel like you’re starting from a losing position. Add to that a couple of losing trades, and it can be tough to feel objective about your results.
That’s why I want to make you a very special offer next week – a way to start using my number one system, without having to make a big outlay. Please watch out for my email about this on Tuesday next week.