It definitely seems like I've been trading as if I was drunk over the past few months -- tunnel vision with blinkers on. I was clearly going down the wrong track for various reasons, and the gambler's need to recover profits keeps me going down this track until the track hits a dead end with the blowing up of yet another trading account.
The approach of taking multiple tight stops with huge leverage was highly successful in December, and I think that was attributable to half luck, and half patience/discipline/good trading sense. My practice was to aim for a conservative 20-30 pips daily, it was a simple method and it worked. All of this went out the window when a chink in the mental armour failed (trading in Xmas which I promised myself not to do), which subsequently cascaded into a downward spiral of bad trading.
Problematically, having an episode like this ingrains terrible trading patterns which will need time to be worked out. For example, one bad habit is I picked up is that I repeatedly jump in front of the train before price action has confirmed a reversal. Result is multiple stop outs, and psychological collapse.
Another related example is that I am now prone to cracking the shits when a trade hits -6 pips, and in that moment I become captive to my emotions and cannot respond quick enough to clock out the trade....minutes of fuming and indecision pass and finally the trade is -50 at which I then am forced to capitulate. Happened to me again last night when I was caught short during the NY session even as I was trading tiny 0.1 lots. This automated behaviour (inaction/indecision/paralysis) is NOT professional, it is like a tumour that must be removed at all costs.
It is clear to see these bad trading habits did not exist back in December, and now trading at 0.1 lots helps me see a bit more objective what is going on inside my head throughout the live trade process. When I first caught myself cracking the shits at a -6 pip i.e. $6 loss trading per the same process used, I realised this was madness. Completely disproportionate to the preceding technical analysis and I should never be acting like this.
But yet, it was this very same faulty emotional reaction that dictated my behaviour when trading 1 lot, 2 lots, 3 lots.
I will continue to trade small and where I am most likely to go on trading tilt. At some stage this weekend I will review my losses from the last 3 months to work out what went wrong. I've also got to rebuild my boat (i.e. capital) before I go sailing again so that will take some months to achieve.
A tribute to those suffering in Japan:
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