We all know the story of Icarus. In Ancient Greek Mythology, Icarus carried by the wings constructed by his Father, is warned of complacency then hubris. Icarus ignored his Father's instructions not to fly too close to the sun; when the wax in his wings melted, he tumbled out of the sky, fell into the sea where he drowned, sparking the saying "don't fly too close to the sun".
In May I flew too close to the Sun.
It has taken me some time to write this blog, as I have spent a couple of weeks processing things. In the space of only a few trades over 7 sessions I managed to give back 2 months’ worth of hard work. This is not easy to acknowledge, but this is arguably not as hard as it is to now have to accept how many winning trades this equals to get back to where I was.
Trading need not be difficult, but it is not easy. It’s not easy to make decisions in uncertain environments, to accept you may be proven wrong only to be proven right, to accept you’ve done things you said you’d never do again, or to accept you may have no idea what motivates you. I have had to confront all these things in recent weeks.
I was feeling good, and honestly I had reason to be. After almost a year of slog…my results had turned a corner. I was having a strike rate over 80%, I was one of Ben’s ‘featured students’ and I had my first serious investor.
I could not put a foot wrong……but then I did.
We all know losing sucks, if you’re like me and you have big goals for yourself. Losing is not about the money, it’s about what you think it means for those goals. Am I being too hard on myself? Sure…but that’s only human nature. It’s good to have goals, and it’s good to feel bad when you make mistakes that impact those goals, we’re not robots after all.
I know of a young guy who has started his own Hedge Fund, he’s an incredibly good trader and he’s where I want to be within 5 years. I recall last year he said his only advice was….“Trade Serious”.
- I did not trade serious:
- I had opportunities to get out after news and I chose to hold on. What would have been a small loss turned into a loss that was equal to an entire month’s worth of gains.
- I was getting distracted, and was spending too much time trying to ‘tweak’ my strategy. This started at the start of April and perhaps it’s no surprise that my results started to drop off then.
- I thought I could try other little strategies on the fly, it was ok, I was up double figures for the year, a small position was ok.
- I did not log my reasons for getting in the trade, I have time for that later.
- I did not protect my ‘psychological capital’…you know the stuff like sleep and monitoring my stress, and my mental state.
A friend said to me “There is no winning or losing, there is only winning or learning”. So what have I learnt?
Lessons I hope to never have to learn again.
- What it’s like to be in my first serious Drawdown (it’s been over 2 weeks since my losses and I’ve still not made back even 10% of what I lost).
- What can happen when you don’t “Trade Serious”.
- The more you continue on this journey the quicker you forget your losses and move on which is worth remembering when you’re faced with cutting a position for a small loss.
- To protect the most important capital of all, my ‘Psychological Capital’ by not staying up late, by taking only higher conviction trades, to be aware of my stress levels etc
But most of all……I’ve learnt If I don’t want to be a real life Icarus I too need to listen to my Father’s instructions.
At the risk of being too sentimental, perhaps it’s the fact that I lost my Father so many years ago now that means his advice for achieving your dreams and goals seems so crystal clear now. For as he used to say all the time:
“When the going gets tough, the tough get going, so get going”
“You got to keep on keeping on”
“Keep It Simple Stupid”
Sounds like good trading advice to me.