Profits and (losses)
Last week I got a few comments about P&L’s I’d posted up; this is quite common.
I was asked more than once, what stake did you use to achieve that? But there are so many ways to answer that question. You could have a hundred different answers depending on how you trade. If you don’t understand this answer, have a deep think about it.
A debate also broke out on the forum about posting winners and losers. My view on posting winners is simple, let’s use sport as a metaphor.
I went to the BMW PGA Championship last year to watch the golf. I wanted to see for myself how the experts shaped the ball around the course and how they tackled different shots. Of course there was a element of schadenfreude when things went wrong, but deep down I was trying to learn from them and also thinking about how cool would it be if I was on that tee and people watched me. In short I was looking to them for inspiration. Curiously, I’ve noticed throughout my life that by surrounding yourself with people better than you, you improve. It can be psychologically difficult at times to be a small fish in a big pond; but you WILL grow. So I’ve spent most of my life seeking out and aligning myself to people who are better than me in the hope that it rubs off. It usually does. I’m on a rare day off next month when a friend of mine is being honoured in London. When I’m there watching him receive his honour, I will wonder if that could be me at some point in the future. That’s how I think.
So when I post up a decent result, I am trying to act as an exemplar; an example to follow. Something to show you that something IS possible. I’m not trying to say, you can do this, that there is a hidden motive; but I want to show you that it’s possible. Fundamentally anything is possible I’ve learnt. I realise that trading isn’t for everybody but I want to show you what is possible if you want to try. Sometimes I wish I was ‘just’ a trade because then maybe I’d be viewed with clearer vision.
So let’s put the P&L stuff into context. If you look at my P&L from today. The best three results were £237, £212 & £204, You will note the Nottingham total I posted on social media isn’t in that list, it was much lower. My worst losers were £55, £50 & £31. Some of the really big totals I get I tend not to post. This is simply because they can be way out there and I don’t think that it’s possible to easily achieve them without a number of factors being in place. The numbers from today though are generally achievable IMHO.
I could easily tell you why the winners worked and how I anticipated them working. I haven’t got a ‘scooby doo’ how the losses occurred, because I didn’t anticipate them. I just did my best to minimise them. I tried my best to not make a loss but did, so I can’t tell you how to avoid them as I didn’t, else they wouldn’t be losses! If you cut back to last week the top and bottom three are £249, £210 & £183 vs £32, £24 & £23. I value consistency very highly. Both weekends I’d see as being well inside my normal trading, in fact quite dull. Nothing spectacular at either end. But, of course, I’m incredibly well practiced. To the tune of over fourteen years now, so you would expect good results from an expert. Woods slicing a ball 90 yards to the right on a par three is very unlikely, an amateur, quite possible! Especially if your mate just did that in front of you.
I could post losses, but I think there is little or no point in looking at mine as, apart from total balls ups, I tend to keep them under control. I do that by simply realising that it’s not going to work, that I got it wrong, or I trade to a much smaller net loss. We all have out moments, but after many years I find trading quite routine even for larger numbers. Rarely do I let it get out of control and that’s where a lot of newbies get big losses from, or perhaps letting it go in-play. There is an amazing thing that happens when you reach a certain strike rate, I’ll see if I can post a video on it at some point. But basically I don’t think much to learn by me posting these losses (or worse ones). I didn’t know they were going to occur, so I can’t really learn from them and I seriously doubt that anybody else can either. I do keep records of errors and strange situations for review so I can eliminate them in future. But run of the mill losses I just write off to natural variability and ignore them.
But…….I think the answer is for me to look at other traders and comment on their positions. That would seem to be the most sensible way to point out errors for people to learn from. The odd shank, topped ball or horrible slice. I can probably correct you stance and stroke, but ultimately you have to practice hitting the ball. So I’m going to see if I can do that, as that seems a constructive way to look at losses and may fulfil the need for people to see some, in a constructive manner. So I’m mulling bringing some traders into the office and looking over their shoulders, I think that would work.
After All, sometimes you win, sometimes you LEARN. Thats how you should view your losses.
Category: Trading strategies
