January 2014 Summary

PL: R-12.73%           £-283.20

Closed Trade P/L:		-283.20
Balance:		1 941.96		Equity:				1 941.96	Free Margin:			1 941.96
Details:
Gross Profit:		228.34		Gross Loss:				511.54	Total Net Profit:			-283.20
Profit Factor:		0.45		Expected Payoff:				-4.97
Absolute Drawdown:		283.20		Maximal Drawdown:				283.20 (12.73%)	Relative Drawdown:			12.73% (283.20)
Total Trades:		57
Profit Trades (% of total):								13 (22.81%)	Loss trades (% of total):			44 (77.19%)

Week 1: First BE week (Al Brooks),
Week 2: A spate of overtrading (S&R trading),
Week 3: a spate of Poor Entries (S&R trading),
Week 4: NA an emotional write off ending in a me seeking some professional help (S&R trading).

Summary: it's very clear to see from the equity curve above that problems began when I changed my plan from an Al Brooks Method to a purely S&R method so I am just going to revert back to the former method...

Psychology: As I write this on Tuesday evening I am starting to feel myself again.  I had a couple of hard weeks at the end of the month (I should probably say I gave myself a hard couple of weeks at the end of the month) and ended up in a bad place both mentally and physically. The specifics don't really matter, what matters was I had a melt down ultimately because I saw plan failure as personal failure,  put a daily equity curve on each post and graded my trades incorrectly. 

1. The fact is plan failure is not personal failure as one must follow a plan to see if it works, this is success (even if the result is unsatisfactory) because one has successfully tested it and can either make amendments to it or write it off and create a new one.
2. Looking at my equity curve at the end of each day has been a very sobering but ultimately good thing because it has given me far greater insight as to where problems are developing, for example my short summary above. But because...
3. I was grading my trades incorrectly I took the failure personally rather than placing the blame on the plan (where it belonged). This month I graded trades on 1 prep,2 patience and 3 discipline all of which are about personal performance. Fact is there are only 2 things to grade in a trade. 1 the plan that created it and 2. the execution of the plan. Sure I still made some personal mistakes but the fact is a lot of the losses and over-trading were attributable to the plan rather than my efforts and where the blame should have been placed.

The S&R Method definitely created over-trading and I found this quote by Brooks that I thought might be quite useful.

"when you're about to take any trade, always ask yourself  if the set-up is one of the best of the day. is this the one that institutions have been waiting for all day? if the answer is no and you are not a consistently profitable trader, then you should not take the trade either. if you have 2 consecutive losers within 15 mins or so,  ask yourself if those were trades that the institutions have been waiting hours to take. if the answer is no , you are over-trading,  and you need to become more patient."