An Update On My Trading

Apr 01, 2024By The Kaizen Trader


I'm compelled to share my journey through this blog for a multitude of reasons. Firstly, it serves as a personal affirmation that I'm navigating the correct path, positioned exactly where I'm meant to be. It's a gesture of gratitude towards those who've granted me the mental space and support needed to focus on honing my trading skills, while simultaneously extending an apology for moments when I've allowed my dedication to overshadow other responsibilities and relationships. Additionally, this post aims to provide new followers with insight into my trading journey and the philosophy that underpins it. I firmly believe in the value of strategic sacrifices for the attainment of greater goals, even if it means temporary hardship.

Let's delve into a narrative that spans more than just a few paragraphs.

Reflecting on the past few months, I have invested an unprecedented amount of time and effort into refining my trading strategies—more so than any previous phase. Despite the possibility that my external output doesn't vividly showcase this evolution, the shift has been profound.

My earlier trading routine was characterised by meticulous daily report cards and an in-depth analysis of executed trades and the decisions behind them, my focus has now pivoted towards establishing a systematic, quantitative strategy portfolio that spans multiple asset classes.

My days are primarily consumed by being buried in spreadsheets and the execution of current strategies, transitioning towards an approach that removes subjectivity from trading decisions. This change has significantly streamlined the decision-making process, rendering explanations for individual trades—once a staple of my daily reflections less worth while.

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This transition has also led me to abandon the practice of documenting my emotional state throughout the trading day via a temperature check. Adopting a binary, data-driven method has not only simplified my approach but also liberated me from the emotional turbulence that once accompanied discretionary decision-making during the day.

I no longer ask myself should I be entering here? What grade is this entry? How much should I risk? Where is my target?  Where am I wrong? When should I reduce risk? Should I take profit? Should I add in? I've taken a winner should I take this next trade? I've lost 2 shall I take a third? I could go on and on but you get the point.

The clarity and consistency of this new style of trading have fortified my execution discipline, allowing me to proudly claim an unblemished record of adherence to my trading rules and record zero tilt days.

This alone tells me that the last 6 months have been invaluable to me and my trading careers future as I know the style of trading that allows me to execute in the most effective way and marks a significant milestone in a journey that began four years ago.

Online sports betting app on smart phone. Man holdning device.

Transitioning from a background in sports betting—a realm dominated by binary decisions devoid of emotional ambiguity—to the complex world of financial markets during the tumult of the COVID-19 pandemic, has been both a challenging and enlightening experience.

Discussing my shift from lower time frames and discretionary trading, I emphasize that profitability is possible through various methods, but finding the one that resonates with personal strengths is key.

Despite the allure of quick gains and the seductive narratives on social media, my unsuccessful ventures on the 1 minute time frame prompted a self-reflection on my decision-making processes.

I identified a pattern of mistake making when having to act fast. As someone who doesn't deal well with making what I believe to be avoidable mistakes, this often lead to mistakes being compounded by trying to rectify the first and inevitably making further errors. Going through this vicious circle enough times it has lead me to favour the higher time frames for their consistency with my meticulous, scenario-based decision-making style. 

My need for thorough analysis and contemplation, was also evident in both my endurance sports endeavours and activities like golf, where consistency and patience reign supreme also supports a skill set more suited towards longer time frames.

Ask yourself, do you play out 100 different scenarios, weighing up the pros and cons before making a final assessment or do you act first and deal with the consequences after? Maybe your answer will help you find your perfect trading style.

fan of 100 U.S. dollar banknotes
Snowdon Ultra 2023

Revisiting my experience with discretionary trading, I recall a challenging phase of drawdown I encountered last year, which left me wrestling with doubts about the market's dynamics and my own trading edge. Was I merely riding a wave of luck? This period of uncertainty didn't sit well with my analytical nature.

In a career where absolute certainty does not exist, my approach has always been to tilt the odds in my favour, seeking comfort in the statistical probabilities that underpin successful trading strategies.

My professional journey, which was spent in some form of business and data analysis for nearly a decade, reinforced this analytical mindset. Even when I veered into sports betting, my approach was markedly data-driven, setting me apart from many in the field.

Despite some people viewing my deep dive into data as a waste of time and pointless, I remain unfazed.

I'm convinced that enduring success in the markets is predicated on robust data analysis. The most accomplished traders leverage data and proven strategies to sustain their edge. Moreover, I've observed a tendency among traders to attribute failures to psychological failings, often overlooking the absence of a viable long-term strategy with positive edge. This, I believe, is a misdirection.

My own trading journey has taught me the transformative impact of integrating solid data into decision-making processes, marking a clear departure from reliance on intuition to a more evidence-based approach.

However, it's crucial to acknowledge that even a systematic or quantitative approach cannot completely insulate one from the emotional ebbs and flows associated with trading. The journey is still littered with highs and lows, moments of doubt during drawdowns, and the frustrations that accompany failed strategies after investing hundreds of hours of time to no avail.

Yet, it's these very challenges that underscore the importance of resilience, adaptability, and a deep-seated motivation that transcends mere financial success in the most competitive market in the world.

This segment of my narrative serves as a reflective pause, a moment to gauge the strides made over the last few months. It's a testament to my evolution as a trader, a journey marked by enhanced execution and a deeper understanding of the markets. Yet, in this world, the stark reality is that success is often measured by profit and loss (P/L). By those standards, the year has been modest, with my P/L currently showing a slight downturn of 1%. This detail, while seemingly minor, is significant, serving both as a personal reminder and a lesson for those newer to trading.

Achieving consistent profitability month over month is a formidable challenge, underscored by my own journey: a gain of 2.5% in January, a dip of 2.5% in February, followed by a 1% decrease in March. These fluctuations, though within the bounds of my backtesting projections, pose mental and emotional tests.

YTD Performance

It's easy to fall into a trap of comparison, especially in an age where social media amplifies only the highs of trading successes, often obscuring the reality of the journey. It's crucial to remember that these snapshots are just that—moments in time, not the full story. The truth is, very few traders, even those a decade into their "full-time" careers, can showcase a consistently upward trajectory and record to prove it.

The markets are cyclical; profits made during bullish periods can quickly evaporate in downturns. This realisation has led me to significantly reduce my consumption of social media content and focus on what truly matters: honing my skills and refining my strategies.

This introspective period has reinforced a critical message for myself and one I'd like to share with others in the trading community: Success is not solely defined by external accolades or temporary gains but by the commitment to continuous improvement and the resilience to navigate the inevitable ebbs and flows of the market. The real progress, I've learned, comes from inward focus and dedication to one's craft, rather than the distractions of comparing one's journey to the highlight reels of others.

No matter which trading path you choose, the notion of completely removing emotion from trading is a myth, and there's no straightforward journey to success. Each trading approach comes with its unique challenges and complexities. Remember, we're competing in the same arena as some of the most skilled traders globally.

The market is unforgiving; it's a place where one person's loss becomes another's gain, a reality that underscores the competitive nature of trading. The sheer scale of operations by some market participants can be eye-opening, especially for retail traders who, in comparison, might feel like mere specks in an ocean dominated by larger predators.

My ultimate goal transcends the pursuit of immediate profits; it's about laying down a robust foundation for a sustainable future for my family. As I mentioned at the outset, I believe I'm precisely on the right track, armed with clear goals and a vision. However, I'm under no illusion about the difficulty of this journey. Like any venture worth pursuing, it demands relentless effort and resilience. It's crucial to have a 'why' that goes beyond financial motivations—a deeper, more enduring reason to push through challenges.

Remember, we've weathered every storm that's come our way so far. With a solid purpose, we can navigate any adversity. Here's to striving for success in the markets, for both you and me, grounded in a deep-seated commitment to our goals and the well-being of our loved ones

Thank you to those whose made it this far, if any part of this post has resonated with you or provided any value, please share with others

Be kind whenever possible. it is always possible. Motivational inspiration quote