I am back! (again!) Let’s just call it mental block. After re-organizing my trading plan and my life, I can finally settle down and find time to carry on blogging. Yes, new ideas, new direction, new revelations…on this roller coaster ride call trading. However, the premise remains: I AM STILL TRADING! Still learning, still reading and still attending courses.

During my 2-month hiatus, I re-read Dr Alexandra Elder’s 2 classic books: “Come Into My Trading Room” and “Trading For A Living”. Perhaps with my experience (if I can call it) in trading thus far, the books seemed to present me with different information. Different cliches stood out this time round while I was reading them. Let me share my thoughts over the next few posts and hopefully get some advice from your guys out there. So here we go:

The goal is to trade well, not to trade often

Dr Alexandra Elder introduced a grading system for capturing profits in a channel. According to him, a grade A trader can capture 30% or more out of a channel. So this is a way of objectively grading one’s trading performance and this is outcome-based. Both based on one’s feel and experience in the market as well as the market itself. Because the market can do anything, right?

From my understanding, “trade well” does not mean “make money”. Some say “trade well” means to follow your trading plan religiously, which I agree to a certain extent. Because, right now, I am trying to reconcile between how a discretionary trader and a system trader “follow” their trading plans. It seems like discretionary traders have the following clause in their trading plans:

“I can choose to not follow the plan when I deem fit”

Then, how do we judge if a discretionary trader is trading well then?

Why we want to trade often?

• The wrong perception that trade often will reap more profits. Trading too often cost us more commissions and slippage, says Dr Elder.
• We like to feel the adrenaline rush when putting on trades.
• Pressure from fellow traders as they are posting profitable short term trades online.

I have discussed how to tell if one is trading a wrong timeframe chart and why shorter timeframe charts are better for learning. Well, I believe my opinions still hold. Any challengers ?

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