New Year's Tasks.

People in the west have a tradition of making "New Year's Resolutions". Normally, these things are like losing weight, quitting smoking, finding a new job, or something along the lines of that. The problem is, within a few weeks, they normally have forgotten all about them. Because of this, I am titling this a list of "Tasks". Unlike so many other people, this isn't a "Wish List" for myself. It's what I have decided I am going to accomplish in the next twelve months.

I am only writing this for two simple reasons. The first reason is that it will help me become "accountable" for my goals, and to be able to look back at what I was thinking. The second reason, is because perhaps someone out there will start thinking about things they need to work on. I sincerely hope this helps someone.


1 - To learn to let profits run.

This is a killer for me. I am actually pretty good at analysis, and am starting to "see" price movements. However, I am still selling myself short by not letting profits run. This can all be traced back to fear. I still remember when I started, there were so many times that I was up 5 pips, only to be stopped out for a loss of 20. Somewhere in all of this I developed fear. (At the time, I didn't know I was trading in "noise".) Like most bad experiences, this one has stuck around for far too long.

I now use better position sizing, so it's ridiculous to take profits at 5 pips. (or whatever.) However, this doesn't apply to my "play account". I think having this will do one of two things, either make letting profits run on my long-term account easier, or develop bad habits. I will be watching this possibility very closely.

I believe the "Letting profits run" part of trading is the next step in my "Trader Evolution".


2 - To continue with what has been working.

There is absolutely no reason for me to stop what has been working. A lot of traders fall into the "optimizing" trap. I have been seeing returns of about 4-7% a month on a somewhat steady basis. That is nothing to sneeze at. However, I have seen a lot of guys try to do better. (Of course, we always want to do better, right?) This is natural, but only in addition to what I have already been getting. There is no reason to throw the baby out with the bath water.


3 - Keep my eye on the "Big Picture", in trading, and life.

When we have a loss, we tend to get upset. However, as I have been recently looking at returns on a monthly basis, and not a trade-by-trade basis, it becomes easier to accept these losses. I have yet to have a "perfect" month. I also suspect that I never will. Losses happen, and that's life. Also, I have learned that sometimes the idea is correct, but the timing wasn't. That is alright, because when the timing is correct, you normally are talking a bigger move anyway...which will more than cover the losses on the "bad timing" trade.

As far as life is concerned, the "Big Picture" reminds me that Foreign Exchange isn't the whole world. I have a son, and another baby on the way. That is much more important than trading. (Although at times it feels like it is debatable.) But the truth is, my son doesn't care if I make 20 pips on this trade or not. And truthfully, I shouldn't either.

I am not suggesting that losing doesn't matter at all, and to become fearless to the point of recklessness. I am just saying that it pays to keep what's important in perspective. My son is more important than the fucking Yen.


4 - To be a better person.

This might seem odd to put on a trading blog. Truthfully, it wasn't originally on my list. However, the older I get, the more I realize that Karma comes into play.

Think of it this way: If you are constantly angry, do you think that it effects your mental state? And if it does, do you think that it might effect your trading? I do.

Being pissed off, (for example.) it would be really easy to take a loss personally, and try to revenge trade. "I will make that damn Aussie Dollar pay!!!" As most of you know, it doesn't pay. Or care. It just does whatever it wants to. It's bigger than us.

Besides, can becoming a better person really hurt anything?


5 - Increase my "Financial IQ".

I am currently reading "Why we want you to become rich" by Donald Trump and Robert Kiyosaki. They continually belabor the point that most people just don't understand money, and how to make more of it. I could not agree more. The amount of knowledge I have obtained in the last year on money in general is staggering when I look back at it.

As far as understanding money, it's actually not that hard. It's just that most people think it's "boring". They get a mental picture of some guy in a bow tie talking about "Gross Domestic Product" and things like this. The truth is, I suspect that there are plenty of people out there that approve of most people's perceptions. The people that approve - the ones that have all of the money.

There is a lot of money to be made in other people's ignorance. Take MTV for example. I grew up in the 80's and MTV was great. Now, they hardly ever play music, and it's all "reality" television. (Do not get me started on "reality" t.v.) They literally tell kids it's alright if your biggest ambition in life is to have a Cadillac Escalade with 22' rims.

If that's a goal, I am all for it. But here's the question: "How in the hell are you going to pay for it?" That's something that most kids won't learn. Luckily, my son and future son/daughter won't be one of them. They will know. They will understand that not just hard work will get you where you want to be. You have to "See the Big Picture".

Also, part of increasing my "Financial IQ" involves getting rid of wasteful spending. I have recently quit smoking. This is a great step. We also eat at home quite a bit now. This also helps.

My next thing: Quit giving so much money to Starbucks. Bastards have me hooked. But, I figure if I can kick the smoking habit, wasting money at Starbucks should be easily beaten.

As I am working on a grand plan, I am willing to kick these one at a time if need be. So for the moment, Starbucks will be alright. I figure that one goes in about a week or so.

Here's something that got my attention: Between Starbucks, smoking, and eating so much fast food, I was wasting roughly $12,000 a year. I wonder if you can find some wasted money in your habits? It truly is amazing how we are conditioned to throw it all away.

Till '08.....