I did a few trades this week in the Wallaby account…and they weren’t too good. I should have followed the first trade and stuck with it. Instead, I proceeded to do three trades that were all losers.
Why did I do this? It was a lapse of discipline, plain and simple. All of the profit that I accumulated is almost gone due to this bad streak of trading. Here is what the Wallaby account looks like right now. To see all of my trades, here is the public report for my demo Wallaby account.
This goes to show that demo trading is an essential step in the process of developing a trading system. Backtesting is necessary because it tests the viability of a strategy, but demo trading brings a little more realistic emotion into the equation.
Of course, it isn’t an entirely accurate indication of how I will react with real money on the line, but it can allow me to iron out incidents like this. It is very frustrating for two reasons:
- I was doing pretty well so far.
- I was right about the trade to begin with.
So what do I do now? I’m going to continue to refine this trade in testing and hopefully make it harder to do this in the future by installing certain rules. One rule that I did break this week was doing more than two losing trades on a setup. I created this rule awhile ago to prevent me from revenge trading and digging myself deeper when I am trading poorly.
I have to stick to that rule because I created it for a reason…Arrrrrg! Anyway, here is the video detailing all of the trades:
I hope you are trading better!