Pepe the Squirrel

It has been a while since I wrote my last post.  I must admit, I got a little caught up in the whole "Audience" thing and I stopped writing.  I thought, no one gives a crap anyways.  Well, I was wrong.  The writing is really about me.  Here is my installment into the vast world wide web.   

Last week, I was on a run.  Picture a typical sidewalk, in a typical suburban neighborhood, houses to my right, fairly busy road on my left.  I was running by some hedges and out pops a squirrel, I call him Pepe.  It's the first name that popped in my mind.  He was definitely surprised to see me hammering down the sidewalk (I am 6'3" 250lbs, I run like a Clydesdale and am hard to miss).  He darted for a light post.  While in mid-flight he recognized that this was a concrete post, not a wood post.  In mid-flight, doing his best MJ #23, he twists and lands in the road.  As he lands, he is ready to blaze a trail across the road and get away from the Budweiser Clydesdale that somehow escaped from the stable.

Keep in mind, this is happening within 10-15 seconds.

All of a sudden, a Mercedes ML 320 comes blasting out of nowhere and Senor Pepe is about to meet his maker.  Pepe stops on a dime, literally between the front and rear tire of the Mercedes, and darts back to the sidewalk where he found a tree to jump into.  

My immediate thought was, I wish I was that nimble in the markets.  Here are some thoughts on how to be nimble in the market.

1) Develop a plan - Each trade (I have wrote on this subject) needs and deserves a business plan.  Entry/Stop Loss/Reward Exit/Time Stop.  Breakdown your trade and determine what is vitally important to its success.  First create a written business plan for each trade.  As you progress and build a process, that will become a mental business plan.

2) Journal - Write, write, write.  Talk to any successful trader and at some point in his/her career, there was journaling involved.  Write down everything.  Entry/Exit/Time/Trade Reason/What is broader market doing/Confidence level at Entry/Confidence level at Exit/Did you follow plan/If not, why?/What were your emotions telling you.  By writing this stuff down, day-in-and-day-out, you will begin to see patterns.  Also, by writing stuff down, you access a different part of your brain.  This can help you anchor positive behaviors.

3) Listen - You know that inner voice, yeah, the one that always seems to be right, even if you don't follow the voice.  That is you.  I remember my high school English teacher telling us, your first thought is the best thought.  Never change the answer on a test if it is different from that first thought.  Learn to be sensitive to your inner voice and follow what it says.  This is your self-conscious, all those things you absorb, that you may not be aware that your absorbing.

Disciplining yourself to listen and be open to changing the plan mid-stream is a process, in and of itself.  By developing a plan, journaling and listening to your inner voice, you will begin to frame the market and your trade in a new perspective.  As traders, you had better be ready to stop on a dime when the Mercedes of life and/or the market is barreling down on you.  You can either change directions and save yourself or keep moving in the same direction and damn the consequences.  Now your just road kill and the market just keeps rollin'.

Be Well,

Hemi