Trading – the Art of Managing your Imperfection within an Environment of Uncertainty!

I seriously love this game. And the challenge it presents to us each and every day.

Probes, tests, retests and all manner of chop in an ambiguous environment of constantly shifting pace, volatility and direction.

And we enter this arena with a mind and ego, desperate for certainty and validation.

We are NOT built for this.

And so the game must become one of not expecting perfection, but instead managing our decisions and actions to achieve the best possible outcome over the longer term.

A key part of this is knowing when to walk away.

Here are some facts:

  • Not every day needs to be a home run.
  • In fact, most days won’t be.
  • And so, on days when the challenge is tougher than expected, the wisest decision could be to stop for the day.
  • Resume the fight again tomorrow, when conditions might be more favourable.

You don’t need to keep fighting till your session stop is hit.

You’re out of sync with the game.

It might be the market. It might be you.

At some point though, it doesn’t matter which.

Take whatever profit you might have. Or even a small loss (easily overcome by wins on any other day).

And choose to resume the fight at another time, on another day, when you might be better reading the market and more easily able to exploit your edge.

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If you don’t like the game that is playing this day, YOU DON’T HAVE TO PLAY.

Take your hand off the mouse. Step back from the charts.

And survive to trade another day.

Happy Trading,

Lance Beggs

NOTE: See here for information on BOF, TST & BPB Setups


 

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8 Comments

  1. Thank you Lance,
    Great article! I love this ones. It is very useful to see and understand how to operate in challenging environments, and especially when the problem is yourself. It is difficult to admit your mistakes along with keeping clear mind. I believe as you ones said (apologies if it wasn’t you) the damage in this game is more of a phycological rather than capital, we as human beings hate to be wrong. I guess if you to play this game for living, you better get used to it 😄

  2. Hi Lance
    I have noticed that you take shore trades more than long ones,it is vice versa for me.I try to take short ones but it is hard,do you have any solutions?
    Thanks

    1. You may want to explore exactly what it is you’re feeling and thinking with short trades. There could be real growth there. That being said, many traders have a preference for one side, long or short. This is not unusual. And while it may never completely go away, you can become more comfortable with trades in the short direction. Over time. Through exposure. Take them on a sim if needed. Or replay (post-session). And keep doing so until exposure lessens the fear. There are no short-cuts. Familiarity through exposure is the best way. It may help also to just simply observe and accept that fact that markets can go down quicker than they go up. 🙂

  3. Hi Lance,

    Your blog is very helpful for learning.
    I have a question regarding your first trade shown above.
    How do you convinced yourself to go short even when prior three bearish candles were engulfed by single
    bullish candle. I would imagine retracement and seek opportunity long (till it is within the opening Range) which with hindsight is clearly wrong.

    1. AB,
      The article didn’t include any higher timeframe charts, because this trade wasn’t the focus and so the context surrounding it is missing. But the overnight action had rallied quite a long way since early European trading, to finish in the area of significant congestion at the midpoint of the prior day. This was a good area for a trap, with potential to drop hard if the rally fails. Your concern though is the engulfing candle on the 1m chart. Think of it this way. If the market sentiment was indeed bullish, then this engulfing move should continue higher. Quite rapidly. But it didn’t. The following minute rejected the break above the opening candle. The next one closes within the prior. Essentially, price action was showing clues that there was insufficient buying here to continue the push to higher levels. Note that I didn’t sell straight away. I watched and waited for confirmation that the bulls were exhausted and were potentially trapped. I entered short because the market could not go higher.

      Another way to think of this – find something that looks obvious (eg. massive bullish engulfing move) that then fails to act as expected (eg. no follow through). Opportunity is available at the point of failure of these “obvious” moves.

      Lance.

      1. Hi Lance,

        Thanks.

        So it is one of them ” Opportunity is available at the point of failure of these “obvious” moves.”

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