"You looking at me?"
Let’s do a quick exercise. I promise it will only take a minute but it will have a pretty important message.
First take a look at your charts. Open them like you would any other trading day even if the markets are closed. Now look closely at the chart in front of you.
Do you see it? No, look carefully. If you don’t see it, then switch to another chart. And another, and another. Keep looking until you find it.
I’ll give you another minute…seriously, look CAREFULLY.
…
…
…
Ah, ha!
You see it now don’t you! There is a trade there right?!
You going to take it?
Well, before you do, you should take a step back and ask yourself why you are taking the trade. Is is it a legitimate setup and part of a backtested trading plan? Or is it just pure impulse because I told you to look at your charts?
Man with itchy trigger finger end up getting shot
- Ancient Chinese proverb…or something I made up, you choose.
There are going to be countless times that you will look at your charts and be bored and just take a trade for lack of a better thing to do. Then what happens? The trade sucks and you end up losing a bunch of money.
I’m sure most traders have come across this problem at one time or another. I know I have.
So what is the answer?
Well, the answer will be different for different people. There are many things that you can do to keep yourself out of bad trades:
- Watch a movie
- Play Guitar Hero
- Learn to play a real guitar (like Ryan O’Keefe)
- Work on your blog
- Anything else that will allow you to watch your charts but keep yourself busy at the same time
I have done all of the above but there is one solution in particular that works best for me. Sometimes when my setups don’t set up and I am itching to trade, the only thing that will cure it is to actually take a trade.
Therein lies the problem. If I demo trade, then it is not a real trade and doesn’t satisfy my craving. But if I trade the same size like I normally do, then I will probably lose money trading half baked setups.
My solution is to keep a small Oanda account open and trade super small lot sizes. Oanda has crappy leverage, 50:1 max. However, they make up for this by having excellent execution and variable lot sizes. You can trade lot sizes down to 1 currency unit, whereas most brokers have a minimum micro lot size of 1,000 units.
I just take a couple small trades in this account with a few hundred units and maybe I make or lose $0.50. I don’t risk a lot of money and I cure the itchy trigger finger. This may not work for you, but it really helps me.
Hope you are well!
Photo: © Igor Dolgov | Dreamstime.com
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