Conviction

March 30, 2015

Going to ramble about a topic today to help myself in this area. Have had no trades lately, and that's what I wan't to talk about actually.

I haven't taken any trades in the last 4 or 5 trading sessions. Been having a real hard time with finding conviction in my trades and I am working on getting over this little hump in the road. Lack of conviction can be a very virtuous trait in this business but can also hold you back a great deal, like me right now. 

Lately, I've been having a very hard time finding the conviction to take a trade. I think I know what lead to this; When I first started trading roughly a month and a half ago, I found decent, quick success making over a hundred bucks a day. Then I took one good sized loss and then had many red days in a row. I haven't had a green day in a couple weeks now, I think. I'm having trouble taking trades because of that fear, I guess, of going back to red. I am basing my trading decisions on EMOTION instead of the price action. This is one of the very basic trading rules. 

What lead me to my 'last straw' i.e. this blog post was my plan for $RADA this morning:

This was my plan watching $RADA from last week Friday's strong close. It has good momo at this point and is nearing the 52 highs. I was completely ready for this trade and had a plan ready 15 minutes before the open. I was going to buy a bounce if there was a washout at the open and look for a green roll and 52 week highs break.

Here's how $RADA traded today:

It traded exactly according to my plan! 

This is prime example of the problem with conviction and how fear prevented me from banking on this trade. I was scared of going red, of continuing my red days. Scared of losing, scared of being wrong.

What I'm going to work on:

• Review - I'm going to clearly go over what I need to work on before the open, mentally. 
• Trust - Going to try and trust the set ups. This will help me get out of this hump and in the future for bigger picture trades. Too much trust can be catastrophic though!
• Take a leap of faith - Going to have a sort of 'just go for it' type of mentality, I need to just jump the gap and hope I can make it. 

Jay