Test Week 4 started on November 3 and ended on November 9, 2010. I placed 20 trades of which 8 were losers, so I traded with 60% accuracy. My goal was to make $25.00, which is 12.05% of the amount I started Test Week 4. Instead I made $0.30 or 0.14%. I did make some extra money playing the QE2 announcement, but that is not counted for purposes of tracking my strategy's performance.
First thing I notice is that I am placing way too many trades. When I look at our blog entry for Test Week 1, I notice that I only placed 10 trades and made 10.58%. On Test Week 2, I only placed 5 trades and made 22.43%. This means that I may not be following my strategy closely or maybe my strategy is still missing an additional discriminating factor to help me filter possible trades.
Another factor that I believe has been of utmost importance in the lackluster performance of these past two weeks is directly related to investor psychology. I got set targets of the minimum amount I must make daily/weekly/monthly to meet my self-imposed goals. I have noticed that the moment I fall behind, I start forcing trades and deviating from my strategy. I feel that I am now playing catch up and must hurry up and get a profitable trade to calm myself. It reminds me of the way I felt when I played basketball and was down 2 points with 10 seconds left on the clock. This 'do or die' attitude is possibly the worst attitude you can have in this business. However, this is something that cannot be remedied by looking at moving averages, oscillators or anything else. This is a personal barrier and I must work hard to overcome it.
I don't know how many times I heard it before and always thought it was bullshit. I guess I was seriously mistaken. It seems that, after all, our biggest hurdles on the path to success are really within ourselves.