DEJA VU

One of the main points that I hope comes across in this blog is the following: I am a real trader, I trade real money, and I give you real results. There is so much BS on the web you would think noboby ever takes any losses. The title of today's post is based on what is happening in my trading this month. Last year during the month of July I was in the midst of changing my trading style a bit, and my results showed it. I got my ass kicked during that month. It was the single worst trading month of my career. It wound up being worth it because from that point forward, the changes took, and I had a very good run to finish out the year.

This month, I have undertaken another change to hold things a bit longer for larger gains. Also, this month I am getting my ass kicked during the transition. I knew this would happen, so surprisingly it does not bother me at all. I know the reality of trading is that at times you lose money. I never want to lose, but you have to accept that drawdowns are part of the business. The key is keeping them in check. I personally don't like to go beyond 8% in any one month. There are times that no matter what you do you just can't buy a win. Often there is not real logic to explain why, but I have had this happen enough times over the years to just accept it. I am right about at that 8% now, so I probably will not trade much the rest of the month unless I see something that is so "perfect" that it can't be passed up. I know I can handle 8% in a month, but can't handle 16% for example, or even 20% etc..

The most important thing for me to stress to people just getting started is this. When you take a loss or series of losses, do not get that mindset that "I have to get this back fast." This has caused more people to get blown out than anything I know of. I have the utmost respect for the markets, so I tend to go the other way after losing. I like to walk away for a few days or even a week or two. The markets will be there tommorrow. If I am losing it is my fault and I am out of sync with what is happening. My dad loves to blame the referees for every loss the teams he roots for have. I do not share that blame someone else mentality. I just have to look in the mirror for who is to blame. I am out of sync right now and until I can get back in sync, I am going to be very careful.

Below is an example of a trade I just got stopped out in today trying for a larger gain, BONDS. You can see the arrow where I entered, and the one where I got stopped out today.

Since I am bearish on Bonds I was trying to hold this for a much larger gain, even though it moved down for me just like I wanted initially. Previously I would have taken out a $7,000 or $8,000 gain on this move and gone to the sidelines. However, I thought there was much more and in reality this is setting up another short entry now. I will likely be going back into this trade in the next day or two. I have just seen far too many large moves come around in the last 2 years, that I have gotten less than I should have out of them. As a result, I am going to stick to larger targets and live with what happens. I know alot of trades like this will occur. You have to accept the limitations with your approach. In going for larger gains, alot of marginal trades are going to play out like this, so I know that going in.

Gold is taking off today along with Silver. I guess I wish I was long, I was long Silver earlier in the week. However, when I look at what everything is telling me here, GOLD is setup to be a short entry. As a result I am waiting to see if this trade sets up. It appears that if we close today where we are now, I will likely try to short this tommorrow where indicated. This is pretty close to a "perfect" setup in my world, so it will qualify as something too good to pass on despite my drawdown.

I hope this post adds credibility. At times this year I have had such great runs where I have had virtually no losses that I am sure some readers might have thought I was not telling the whole story. I was then and I am now. This is how trading goes in the real world. I wish I could just click the mouse and have every trade be a win. There is nobody who does that in spite of what some people represent.