Saturday, March 12, 2011

Portfolio Performance for Feb 2011

# of Entries...........8
# of Exits.............7
WinRatio..............80.00%

Portfolio's ROI........5.82%
Market's ROI...........3.20%


February was a good month for the market and portfolio. The portfolio edging out the market's return for another month.

Going to go on a bit of a rant here. Something that has bothered me a bit in the trading world for years -- trading psychology. Trading psychology is a market unto itself. Books, blogs, websites, all kinds of info to help you become a better trader. Most of it? The wrong focus.

Why? The crux of the trading psychology stance is -- don't trade a system (even if its profitable) if it doesn't match your personality. It's all about finding the right match. Like those eHarmony commercials.

The trading world wants to embrace a yoga or martial arts viewpoint on trading success. Reminds me how people judged martial arts disciplines prior to UFC coming to light. In fact, I wrote about trading and fighting in a post almost 6 years back here.

Before there was a venue for everyone to see which fighting styles worked...students were inundated with rhetoric, philosophy, etc. You had all these theories about what worked in a real fight. But, nobody was fighting. Just talking and practicing strict rigid disciplines. Then the UFC came along and all these martials arts disciplines came together and actually fought. The winner shocking everyone. All these wonderful well thought-out disciplines just failed. All the finding one's chi and structured katas just failed. Turns out...you've got to fight. It isn't about finding yourself. Isn't about finding your chi. It's about fighting your opponent. It's about taking advantage of your strengths and their weaknesses. See this video for the story behind UFC and the 1st winner of UFC. Please note...video shows real fighting. And be sure to see Ken Shamrock's interview around 6:18 mark. Along with Joe Rogan's comments around 9:24.

That's why I wince every time I hear or read about finding a trading system that fits your personality. Or there's only one way of trading - as we often hear with trend following. Damn, that's a religion all unto itself.

Gracie took advantage of his amazing ground game and everyone's lack of to win. But, you cannot stop there. You have to adapt...because your competitor's adapt. The market adapts. The UFC adapts. There is no holy grail. No one way to do things. No black and white. It's all gray. It's all changing...all the time. Cause the participant's are learning all the time.

It's not about finding a system your comfortable with. It's about getting comfortable with a winning system.


Despite the religion behind trend-following...I think it's one of the best places to learn how to fight. It teaches you how to get comfortable on your back when the market is clearly kicking your tail. It limits the number of decisions you have to make at a time when your trading instincts and intellect are screaming to run away. Teaching you how to get comfortable with being uncomfortable in trading.

So, observe the markets, find profitable rules, and trade them. Despite how uncomfortable you find yourself trading them. Cause it's not about you...as Charlie Sheen so eloquently states...it is about winning.

Later Trades,

MT