Thank you all for the responses thus far.
1) I was thinking about this today at work. Many times it helps me to get through things sorted out in my head by putting my thoughts down on paper. I realized that I have optimized my trade to such a degree that the number of trades that I take is less than I would like it to be. I have gotten my trade to where it is by refining my set-up over the years to a point where my losses are as small as possible and I see movement in the correct direction soon after entering the trade.
Justin Mamis discusses Price risk vs. Information risk in his book, "The Nature of Risk" I have read the book a number of times and determined the optimized trade for me. The more information that you require before entering a trade, the further you are from the proper stop point. Enter too early and you find your self being stopped out earlier and more often. That point is different for everyone, but for me I have found the point where my trading results are consistent and my own nature of risk is satisfied by the entry point and the amount of information risk that I have to give up in order to get it.
Jim Rogers talks about waiting for the money to be lying in the corner and then just goint and picking it up. Mark Weinstein talked about the Cheetah and how he will wait in the bushes for days in order to pick just the right gazelle that will put up the least amount of fight.
My trade has consistently yeilded profitable trades in the 60-65% range and avg. win/avg. loss in the range of 3-1 to 3.5-1. In order to get these results I have narrowed my signal so much that I do not get as many trades as I would like as well as stopping trading when overall market conditions do not warrant action.
The solution would be to loosen my trade parameters which would also likely mean that my win rate and avg win/avg loss would decline. Because I know the type of trader that I am and my comfort level with risk I think that I would have to develop a systematic approach to take trades with lower probabilites as it would not be in my trading nature to take them discretionarily. I hope that made sense.
#2) You mentioned a few personality characteristics in your post. Rule-Breaker, planner and reflective.
I dont know if that was just a random comment or whether you have read/done research on personality types and how they react to trading, but if you have some information on that ... please share some sources.
About 6 months ago at work, I took some training that revolved around the book, "Now, Discover Your Strengths", by Buckingham and Clifton. Basically, you take a 200 question test online and each question is timed with a maximum time of 20 seconds to read the question and chose one of two responses for each question. At the end, you are given your top 5 strengths in order, out of 34. I thought it was a nice exercise and was moderately surprised at the results. #'s 2 - 4 did not surprise me, but my top strength actually did.
They were (in order): Focus, Analytical, Responsibility, Intellection, Learner. I was not surprised that Empathy, Harmony, Inclusiveness etc... were not included, as I do much better working alone.
The point of all this is that your post made me remember the book and I plan to go back through and see how/if knowing these strengths may help me with my current thoughts on possibly changing up my trading a bit.
Another book, "Trading, Sex and Dying" talks about 13 personality types, but I did not get much out of that one.
Anyways, thanks for the thought provoking discussion.
North_Face
