This chart is from Thursday 19th March 2020. A couple of quick trades and then STOPPED. Done for the day.
Because today was a Hit & Run day!
Trading is a performance activity. And it's our job to manage ourselves in an attempt to get as close to peak performance as possible.
Good sleep routines, healthy eating, exercise. And some degree of separation of "life issues" from our trading day.
All good… and fairly easy… until a pandemic is unleashed across the world.
I expect most of us will be operating with heightened levels of anxiety and stress at the moment. I'll be the first to admit that this period of time has been harder on me than I expected. Having two daughters working as nurses provides an interesting mix of pride and anxiety right now.
The markets of course do not care at all how we're feeling. So it's up to us to manage ourselves. Limiting exposure at times when we're unlikely to be on our game. And pushing hard when we are feeling at our best.
Here's how I've chosen to manage my trading over the last few weeks.
Pre-session preparation includes an assessment of my current physical, mental and emotional state. And selection of one of three ways I need to approach the markets today.
1. NO TRADING
My physical state require strict adherence to my 5/12 fatigue management rules. If I have not had sufficient sleep, then there is NO trading.
And for my mental and emotional state, if there are any serious and unresolved problems or anxiety or any other type of distraction, impacting either myself or any member of my immediate family, then there is NO trading.
It's time to step back. Sort myself out. And come back again tomorrow.
The fact is that we don't have to trade EVERYTHING. Let today go.
I'm here for the long haul. I expect to be trading for decades to come. If I miss one day, who cares. It will not make or break my career.
2. FULL TRADING
The majority of days though, I'm completely fine. Sufficient sleep, feeling fit and healthy. And feeling in control of the current crisis (at least as it relates to my extended family).
It's time to trade.
Pre-COVID-19 routine: 0930 to 1100 compulsory trading, 1100 to 1200 optional trading.
Current routine: 0930 to 1100 compulsory trading, 1100 to 1600 optional trading but compulsory engagement with the markets, watching and learning.
It's time to trade.
Press hard when in sync with the market. Step back a little when out of sync.
But make sure you're fully present and attacking whatever opportunity comes your way.
3. HIT & RUN
This is for those in-between situations. The shades of grey that fit somewhere in-between "obviously unfit to trade" and "hurry up and open the damn markets because I want to trade".
I've had a few of those days lately. I satisfy the fatigue rules. And I'm not overly consumed by current events of the world.
But I feel a little down. A little flat and deflated.
The plan here is for a shortened session. Hype myself up. Get in and attack the market. And then get out.
Hit and run.
And then take some time out for personal rest and recovery.
There are many ways to do this.
I've informally adopted the following plan:
(a) Trade the opening sequence.
(b) If I'm sitting on a loss then stop. Take the hit. Don't risk making it worse.
(c) If I'm sitting on greater than 2R profits then stop. Take the money and don't risk giving it back.
(d) But if somewhere in-between, I'll allow myself to make a call here based upon how I feel. Either take what I've got, or push on for one hour maximum to see if I can get to the 2R target.
Why one hour? Through personal experience I know I can hype myself up to focus sufficiently for about an hour. But beyond that, motivation starts to drop. Maybe you can do more?
The important point here… again… is that you don't have to trade everything.
If the market offers tremendous opportunity after that opening sequence, or opening hour, who cares.
It's not going to make or break my career. And given my low motivation I probably would have stuffed it up anyway.
So let it go. Take a break. And have a little "personal time".
Typically I find this is sufficient to have me back to 100% the following day. A short break from the markets can do wonders for reigniting the passion and having me eager to get back into the ring for another round of action.
Let's revisit the earlier chart…
The obvious thought here is "But Lance, you missed so much opportunity!"
Another "Hit & Run" day, on Tuesday 24th:
You might recall this opening trade from the social media post on Wednesday. If you were wondering how that trade turned out… now you know!
There are days when it is obvious that you shouldn't be trading. Stand aside. Let it go.
There are days when you're feeling great. Keen to get into the action and face the challenge of the markets head on. Go for it. Trade.
But there are also in-between days. When you're just… ok. A little flat. A little lacking in motivation. The last thing you probably need in such a situation is a full session of trading. So shorten it. Reduce the session length. Accept smaller profit targets. And get in there for a quick hit and run. Smash and grab. Two or three trades. Get a profit if you can. And get out of there.
You don't have to trade EVERYTHING. Let it go. And take some time out for YOU.
Take care of yourself. We're in this for the long haul.