Waves, Patterns & Projections (2003)

This is from Scott Holmes:

Ahhh, I remember with a twinge of pain how 'papertrading' eminis I was in an imaginary world making a killing. I had enough for an imaginary Mercedes SL55 plus money to spare. Then I started trading and it went 'POOF'! In two months I lost half my money. In four I had lost about 2/3rds. I had my plan but 'What is going on?! What's wrong with me?! Why can't I do this?!' I had burned all my prior bridges to do this and now I had awoken to a reality that trading is hard. I know I said I'd cover how to simplify it, and I am, so bear with me. This time of utter pain and losses is the most valuable. Odds are very high you won't succeed (I believe it's about 90% fail), especially at the beginning. THAT IS YOUR DECISION. This is not a lottery and it doesn't come down to what balls pop out deciding wether you will be loser or or winner. For the first month every time I thought I saw something I went for it. Nope no good. Then another and I wouldn't take it only to see it impersonate an eagle. Then I'd see another and I would get in and take a loss due to anxiety before my stop loss was hit. Trading is a maddening game. It can twist your mind up so bad you don't know what is up and it seems everything you learned has been a waste. I said if there are people that can do this THERE IS NO REASON I CAN'T! (If it helps, I have no college degree so book smarts has nothing to do with it). I decided after the first month to start a journal and write down my reasons for every action including my emotions. This is the time where you find out if you are a wussy. I was was a wuss and I realized I needed discipline in my entries to de-wussify myself. Henceforth came this list. I was accountable to you and to myself. I had added the RSI and ADX and that crossover tied with a pattern break gave my entries discipline. Without a shadow of doubt I knew that entry would provide high probability trades I just needed accountability. My trading changed. The first month I was flat.

The second month I was positive. I had turned the corner and was positive the moment I put discipline and accountability into my entries. Entries is one small part of the game indeed but within it all is a very powerful lesson. I started analyzing myself and developed 'tricks' or tools to combat my own problems. The only problem is the longer you trade the more issues within you pop up. Anxiety, stops, exits, news, opens, etc. will come up and you must know your weaknesses in order to combat them. I will take on a full running charge from my nephew but I'm not going to take on a car comming my way unless you give me a tank. I suppose that the one thing that has helped me the most this past year is acquiring my own armed forces that each have a specific purpose dealing with trading and my own psychological problems. Losing money or not making as much as you 'think' you should hurts. 2003 was both the most painful and the most emotionally rewarding for me. You will feel pain and it will hurt. Unless you run from the pain you will HAVE TO DEAL WITH IT!! This is the most self centered profession as well as the loneliest. No one is there to hold your hand and there is no watercooler to shoot the breeze around. Find your pains, diagnose the cause (This originates within you and only you. Admit it.), and then employ some special forces to deal with it. To me this is of extreme importance. Think about it. If you're a wuss find the cure and de-wussify yourself. Sometimes the answers will come from a book or a friend. Other times they will come in the bathroom. The greatest is when they come when you are out with friends and all the sudden BAM the answer comes and your friends wonder what your deal was after you have abruptly left to see if that indeed would work. Nothing in life will ever make you realize all your problems like trading. In the same regard, nothing in life will change your preconcieved notions of life for the better. You do this and YOU CAN DO ANYTHING.