Here is the link.
The part I don't often explain well enough is that you should have a threshold above your threshold, example will be easier than words:
Say you have 100k Account and decide you want to freeze your risk for 100k
"$1000 risk is good enough for me right now, I need to develop my risk at this very significant milesotne and wire out some as well b/c $1000 represents expenses in my life that are meaningful"
"I want to risk $1000 for maybe 1 or 2 months and see how it goes"
Okay so I would say let's give yourself +1 Max Loss over threshold.
I have the ability to take -8R on a day as a max loss and won't flinch, so I will say $100k + $8000 -> Represenitng 1 Max Loss.
That means if I fluctuate over $100k like $103k $104k etc, I won't size down yet. I will still come into next day risking $1000.
However under $100k, I will size down. I will then compound back up over $100k to risk $1,000 again but no more.
If I ever have meaningful surplus gains over $108k then I will wire ALL of it out no question - Meaningful being like more than $100, perhaps $1,000 / $2,000 minimum.
Pay yourself accordingly and DO NOT WAIT TILL End of Week or END of MONTH. Complacency often = loss coming up and not banking it. There is not need for it to be in there b/c you're not currently compounding the capital.
A LOT of the time you will be wiring out after a hot streak or some bigger gains so that usually signals the reverse action may take place soon after, it not action -> probably your own ego will manifest a loss.
Wiring out secures your mental and, actual, capital (quite literally).
Now you consider that you're building out months of expenses out by wiring out, that should help you figure out when it's time to move out of the freeze onto the next level. Could be $1200, $1500 etc, I wouldn't necessarily make a 100% jump to $2,000 -> stretch target perhaps.
Do you have now 3, 4, 6, 12 months of expenses taken care of? Great. But that is half of the equation. The other half is considering that you have 0 emotion about putting the risk on, no hesitations about it. Not only this but you will have no fear of a MAX loss or having several MAX losses in a row potentially. You no longer have jubilation towards the big wins and it is just another number. Those types of feelings towards your risk signal the ability to move forward and have mastered that current level of risk.
If you ever find yourself back down to that risk from a bad streak, you would have NO problem executing at that level whatsoever, it pays to build your foundation.
Problem is that people always SKIP ahead 2x, 3x, 5x, god forbid 10x... and have NEVER experienced those feelings on the level they're trading, let alone even touched it before... this is where the problem occur enmasse.
Do not be fooled by your supposed entitlement to risk, entitlement to size because frankly you have NOT earned it and it would be so convenient if we could satisfy our own monstrous ego by self-soothing under the guise of rationalizing it's merit based on our subjective valuation (Almost no vents in trading are guaranteed odds).
Fact is, if you were capable and meant to trade at that higher level then you wouldn't have identified area of resistance at your current base / felt any emotion whatsoever towards the money at hand. The fact that people even consider the potential money to be made as significant is also a sign that it's a trick of the mind.
People who make money trading don't even think about money, people who lose money in trading DO think about money. People who are truly successful at trading DON'T need money immediately or trade with money as the only objective. A lot of the time they are already financially free. Financial freedom is the result of trading well and not a result of rushing it. People rush it and then leave themselves open to ruin, despite having a deep run because it was luck and not skill.
If money creats an emotion for you it means you're not ready.
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