What are your trading expectations and, more importantly, are they realistic? Most new traders and even experienced traders can have unrealistic expectations — myself included. After all, we watch the markets move billions of dollars a day so if we are great traders we should be able to make billions too, right? Wrong!
Trading Expectations versus Trading Results
As most of you know, I only did a 60% increase in the Binary Trading room in September. In October, the total went to 22% because I suffered a negative month (-$64). Did I have unrealistic trading expectations? I expected a bigger percentage increase but didn’t achieve it. And, with trading being so isolated, how do I gauge my own performance?
This all coincided with an article that I was doing regarding Traders Being Held Hostage by the FEDS. During this research, I reviewed mutual funds results for September and bank trading groups. For the first time that I know of, traders on Wall Street will not be receiving end year bonuses because the trading groups have had dismal results, which even affected the banks profits announcements during the last week of September and October. Trading has been hard, not only for myself but even the “big boys”.
Below is a chart of the results for September 2015 of the top ten Best Mutual Funds – Best Fit Large Growth as reported by Morningstar. For the month of September they all lost money and for the last one year period, their results do look dismal, I mean really 5% and 6% increase? But that is trading. You have really great months followed by really dismal results where everything you touch turns to crap — literally.
Herein lies the issue with most traders. They blame themselves, they blame the indicators, they blame their entries, they blame everything because they feel that it is something causing them not to make money. Actually, it is simply the market. We have had periods of absolutely no movement, followed by spikes, followed by dead silence. As I was talking to another fellow professional trader, the market seems to “behave” during Asia and Europe and then goes crazy during the US session. What has worked for months and years, seems not to work but actually it is the market spikes and non-movement that is the issue — not the method or indicators. We are charting new territory around the world.
China markets crashing, causing other markets to crash.
Country raising or lowering rates that have never done so before.
Employment numbers that are astonishing in other countries. This is anticipated to worsen because of a flood of immigrants.
FEDS talking about raising rates and then opting not to but then again stating they are going to and, when they do, by how much and how quickly.
Crude crashing which is anticipated to cause countries and gas companies to go bankrupt (Saudi Arabia just had their credit rating cut).
These are just a few of the topics that traders are dealing with. Yet, have we changed our expectations to match current events? Probably not. We simply expect the same results that we have always been able to achieve but we live in an ever changing market and we have to accept that. We will have negative months. We will have positive results. In the end, the bigger question is, can we maintain our discipline, our emotional and mental outlook, so when the markets offer us great trading days we can take them?