Talking Points
-Protect your mental capital
-The market forgets your trades, you should too
-USDJPY historic run up
My biggest mistake in 2013 fell on the mental side of the trading spectrum. As an experienced trader I know not to let the recent past influence my decision making. The market does not know and does not care what happened to you on previous trades. Letting past trades influence behavior in the present is usually quite foolhardy and detrimental to PL in one form or another. However, as is so often the case in trading following this advice is usually much easier said than done.
Following several false starts in USD/JPY (and a string of losing trades in the pair) the prior year I was apprehensive about positioning too aggressivly on the long side at the start of 2013. Despite several factors I look for like cycles, sentiment and momentum all aligning and pointing higher I let the activity of the recent past influence me and I traded only in very small size in USD/JPY over the first half of 2013. This proved costly as I did not captilize as I should have in the historic run up in USD/JPY during this time.
Chart created byKristian Kerr using Marketscope 2.0.