Back to school this morning…
I’d almost forgotten what it was like to have a bit of peace and quiet in the house. Six week’s worth of arguments over computer games and footballs bouncing off your office windows tends to have that effect!
But off the three darlings went, all neatly turned out in their new red uniforms. And we only had one small protest to deal with…
Elder son had been teasing younger son about moving up to his new class with a new teacher, the notorious “Mrs. Grumpy”. The tears and sobs started.
“I don’t want to be bossed around” he complained.
Oh, to be six years old again!
I’m sure he was fine by the time he caught up with his old friends. But I do remember it being a bit of a shock, going back to maths tests and homework after swanning around all summer. And resistance to change is a trap we probably all fall into to some degree, even us grownups!
You see, it’s easy when you’re six. You don’t have much choice. You’re dropped off at the school gates and you get on with it. You may not be overjoyed at being shaken out of holiday mode but it’s in your best interests and you’ll benefit in the long run.
But what about when you’re a responsible adult?
Overcome the fear of change to keep yourself moving forward
When you’re in charge of your own life decisions there’s no one cracking the whip behind you. I mean, who goes actively seeking change when you’ve gotten way too comfortable with the way things are?
Or worse, what if you know you could be doing better but can’t seem to shake yourself out of the same old routine? I’m sure you’ve heard Einstein’s definition of insanity before…
“Insanity = doing the same thing over and over again and expecting different results”
It’s an easy one to fall for when you’re trading. You can learn one methodology and then struggle to see beyond it…
You’re making money, but not as much as you know you could be. The trouble is you’ve become married to that one strategy.
You’ve put so much time into it, and become so familiar with it, you can’t set it aside. It’s like those hostages that become attached to their captors. They start to protect them, even defend their honour.
And yes! You too can be taken hostage… by a mediocre trading system!
So how would you go about putting that right?
Don’t be held hostage by an inferior system
Well the first thing to do is take small incremental steps. If your strategy shows at least some potential, start testing one new idea at a time. Don’t go leaping around from one new system another, that’s a common mistake. There’s probably an easy way to crank up the performance of the system you’ve got before you throw it completely out of the window.
And I’ve stumbled across an unusual (and entertaining) way you can do it…
There’s this deck of cards called ‘Oblique Strategies’. Brian Eno (musician, composer, and record producer) came up with them.
Each card has a single cryptic, thought-provoking, word or phrase typed on it. The idea is, if you have a dilemma or a creative block to resolve you simply pull a card and see how you can apply it to your situation.
They do say some pretty random things… “Move towards the insignificant”, “Into the impossible!”, and “Do something boring”.
But don’t take the messages too literally. Let the phrases bubble away in your thoughts and take note of the new ideas that start coming through.
The cards were designed for musicians originally – to drag bursts of inspiration from deep within their subconscious mind – but they became popular in all creative arts. And you do know that trading is part art, part science, right?
So save yourself the £35 these cards sell for on Amazon!
Because I’ve found a free online version for you to use instead – you can find it here.
I tested it out by playing a little game. I gave myself 30 minutes to pull a few cards and come up with new ideas you could start testing to crank-up a humdrum trading system.
Use these strange cards to receive uncommon trading ideas
The first card I got was a one-worder: “Reverse”.
Hmmm…
How about you turn the system around on its head – you buy instead of selling, and sell instead of buying. It could reverse the fortunes of a losing system!
You might need to fiddle around with the way you take profits but that should give you a completely different perspective to work from.
The next card I got was “Work at a different speed”.
Completely change the timeframe you work on.
If your system enters trades on a daily chart, look for ways you could take small scalp-sized profits on a very regular basis. Is there a way you can make it a 1:1 reward to risk proposition using tight stop loss orders?
If you enter your trades on the 5 minute chart how about you look for one or two good entries during the day and instead of taking quick profits let them run. What if you left the trades open until the end of the day? What about the end of the week? You could keep adding to the position on runaway breakouts with very little risk and end up with a huge result!
My third card said “Is there something missing?”…
So how about you add some alternative ways to take profit on your trade. Come up with three different techniques for taking your chips off the table as the trade moves in your favour. Maybe you close the trade down in three different stages… using three price separate price targets, or a combination of price targets and timed-exits (exit a third of the position after 4 hours, or 24 hours, or 72 hours).
One thing that’s commonly missing is a way to capture huge movements in price. So is there a way you can leave part of the trade running with some kind of trailing exit point? Catch it right, and that part of the trade could keep moving up for weeks or even months. It could make the lion’s share of your annual profits!
The fourth card was “Twist the spine”. I put that to one side. The fifth was “Ghost Echoes”. That’s another one for me to ponder!
So I’ve left those two out on the desk beside me. And I’ll be sure to update you when my flash of brilliance arrives!
But joking aside, it is intriguing how stimulating your brain in a different way can create new ideas and new connections between old ideas.
So give it a try and have a bit of fun. Come up with some crazy ideas. But don’t be too surprised when your flash of genuine trading inspiration arrives like a thunderbolt.
Be Prepared: Market Moving Data Coming This Week (London Time):
Wednesday 3rd September
09:30 GBP Services PMI
Thursday 4th September
12:00 GBP Interest Rate Decision
12:45 EUR Interest Rate Decision
13:30 EUR ECB Press Conference
15:00 USD ISM
Friday 5th September
13:30 USD Employment numbers
Monday 8th September
No big trades
Tuesday 9th September
09:30 GBP Manufacturing production
Take care if you’re trading on Friday afternoon – it’s our old friend the US job numbers at 13:30 – and I’ll catch up with you again next week.
