So, there is something that I am struggling to reconcile in my own head. On one side, you need to continually push yourself to be and do better… on the other side you also need to know when you have done well and reward yourself. But how do you know when to do what?
A practical example perhaps: let’s say that you know that you can make a certain amount of money each day with ‘relative’ ease on a consistent basis. Now, your goal is to increase that amount of money over time, so technically when you hit that number, the only way to get it to go bigger on average is to keep pushing beyond it when you get there.
What happens though is that when you reach that number and you want to keep pushing beyond it, nine times out of 10 you end up giving back all the money you had made, then get all angry with yourself and trade like a cardboard box for a little while and end up going red on the day. This has happened to me literally almost three times in a row now. I reach my ‘daily average’ and I think “meh, I can do better”, keep trading actively and end the day red near or at my max loss limit.
So in essence, the only way to breach the barrier is to breach the barrier… but nine times out of 10 it is actually better to not try to breach the barrier, take the money and go home. So, the challenge is to know when to push beyond and when not too.
So here is my strategy to deal with it (at least, this is what makes sense to me). Back in the day I used to be a pretty good show jumper, so I am going to liken day trading to show jumping. The goal is to win, but in order to win a competition there are certain milestones that need to be achieved first.
First you need a clear round, without this you cannot advance to the jump off. Although before you can worry about a clear round, you need to make it through a round without being disqualified. Disqualification would be reaching the max loss limit for the day. Making it through the round would be any amount of profit between 0 and the daily average. A clear round would be 150% of the daily average (so in show jumping clear rounds are pretty hard to come by – fact).
So now, if I trade away for a bit and look up after a few hours and see “wow, I am 150% of the average and I hardly noticed”, then congratulations I am in the jump off and can keep pushing for a big win on the day. (Although if I give some back and reach the daily average again, I need to take the money and walk away). If I trade away for a bit and look up and don’t have a clear round (i.e. have not breached 150% of the daily average without noticing), then I need to accept my round and go home (seeing as I have not advanced to the next round).
There is no shame in taking a few penalties at a show jumping show and not making it to the jump off. 80% of riders don’t, but they still love riding and are still at the shows. When you do make it to the jump off though, odds are you are going to get a prize.
So yeah ok, this is probably a little weird and what not, but I don’t really care. I think that structuring my day in this way will help me keep it tight and help me bank money more often.
Happy horse riding, uuhm, trading!
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