Too many times in the past when I've struggled, my natural response was to DO MORE: More action. More activity. More analysis. More study. More volume. More more more....
And while perhaps short term the results were favorable or encouraging, long-term the results would inevitably be the same: FAIL - back to the drawing board.
Recently, I found myself defending against my natural impulses again to DO MORE. Nearly all my September options positions have drawn to a close - with good results. (As soon as my last September positions are closed, I will post the results). But I find myself trying to tweak my well designed system.
I see that I have had great results in the past 6 weeks, but I worry that perhaps I'm tricking myself because the market pretty much fell asleep (which is good for options income strategies that maximize profit when the market goes nowhere). I've had great success targeting 30 - 40% gains in my positions. But I'm asking myself: "Did I get lucky?" "Am I being too greedy?" "Should I target 10% position gains instead - aiming for a high percentage of wins?"
To this point, I've successfully resisted the urge to tinker with my system. It's worked so far, don't mess with it. Let it prove to me that it needs to be fixed first.
The best way for me to fight these urges is to fill my day with other activities. To this end, I've been pretty successful. The beauty of my trading strategy is that it doesn't require me to monitor the market while it is open. So, I've used this time to immerse myself in the vast interweb of amazing knowledge, education, and insight within the blogosphere. I've also gotten involved with a start-up restaurant here in Chicago, as well as networked with some others in the Chicago trading scene to investigate opening a trading office where I could get involved in trader education, recruiting, risk-management, systems development, and mentorship - something that has always interested me.
I also have been reading books a lot more recently, which is a good escape - especially when the topics being read are educational, personal improvement, or inspirational in nature. It helps keep me focused and grounded.
It has often been said that in trading, the hardest part is "sitting on your hands and doing nothing". And this is in most cases the most profitable approach. I need to remind myself of this, and writing this post is one way I've helped remind myself of it's importance.
Stay focused on the long-term results. If I can continue to earn 5-10% returns each month - does it matter how much activity it required to achieve it? Does it matter how many trades I did, or how many hours I stared at a trading screen? NO.
The only thing that matters is the bottom line.
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