Channeling Peace with my Piece

One phrase that we use all the time is, we need to have peace with our piece. This phrase for us really embodies an important concept in successful trading, and that is being content with not taking an entire move or every move, especially when you are still newer and fine-tuning your craft. There’s a lot to unpack with this concept.

Every day, the instruments we trade, such as the future’s market, move a similar average daily range in terms of points, ranging anywhere around 200 to 400 points for the NQ, as an example. If you trade a move with multiple contracts and potentially multiple accounts, the money you can win from one trade can compound pretty quickly. Once you have a real trading edge in the market, it’s quite possible to be able to take a piece of a good trade within your setup and have a nice amount of daily points. And sometimes that can happen in a matter of minutes. The trick can be that if you make your daily profit target goal in one trade, having done your job, how easily can you stop trading and be content with your win? Are you able to walk away after a nice one and done or is the urge to jump right back in too soon and potentially chase for more, a strong desire? We have certainly experienced this feeling, almost as if we didn’t get enough of something. We’ve told ourselves it’s about the points but when you really examine it, it’s deeper than the points. It’s the emotional input of participating that we can become too attached to and sometimes it’s a challenge to turn off the trading switch and pivot to other things.

So that is the scenario that can be pretty difficult to navigate when you’re a younger trader. And it’s a bit of a double edged sword. Sometimes you are totally right to get out of a move after a reasonable amount of points because it is going to retrace and you could have given back all of your profits and get stopped out in the red even, had you not closed out at that intentional target. But, on the other end of that, when you close out at the first or second reasonable target and then the market moves for another 20 points in your direction, that can be a hard pill to swallow. That is where some pretty serious FOMO can come to play! Whether it’s just you knowing you missed out on a much larger part of the move you were in, or if you know other people that you trade with and talk to you during your trading day, and you know that they held the trade to much farther targets and were more handsome rewarded… There are many ways that can feed the emotion of fomo and they all can sting when you were in the move and, in hindsight, you got out too soon.

Logically, we know that not every trade can and will be ours, but it’s disheartening to feel like you didn’t take advantage of opportunity. We can speak from our own experience of feeling like we were fortunate to have a clean trade out of the gate so now we don’t want to risk giving back those points. However, if it is a day we are reading her well and our edge is present, then this rationale is counter productive. On the contrary, if we struggled with some impatience or FOMO with our initial trade executions and had to try a couple attempts to nail the trade, then likewise our ability to take advantage of her abundant opportunities will be affected. In this case, we may be a bit worn out and just relieved that we recovered some stop losses and are green for the day. It can be harder to stay neutral and focused to continue to participate in this scenario, so we will likely want to walk away. These are the hard truths of our performance flaws that we are still maturing in and growing through. So then on a day she does continue to move according to the beautiful trade plan we created and prepared for, it is a hard pill to swallow. But we always can learn from her still.

Gosh, is it hard sometimes to be able to recognize and anticipate gorgeous moves from the market and not fully capitalized on them! And this is next level problems. It’s quite incredible that we are now able to see great trades before they happen whether or not we actually execute on them. This is growth as a trader, and we are so grateful to be in this phase of our trading careers. But we are still human and it can be hard to feel content with a small piece. Say a five point piece of a 50 point day. This takes some legit maturity to quiet the fomo of the other missed opportunities as we grow and evolve.

It’s a definite blessing and a curse to be working through that place where you have a strong intuition about where the market is going, but don’t fully capture it. But green is green! Just shows how many psychological conundrums we are always facing! It can hurt more to not nail your trades when you are right and in sync with where she’s going, than when you are just wrong. Even if we don’t execute perfectly, we still need to recognize our trading intuition and IQ is increasing and the deliberate practice we are doing is a big win! And there is ego involved in this, we’re always battling that even when we don’t realize it. That awareness and acceptance of not trying to control all the variables of this business is hard. It’s a constant effort to manage what we can actually control and having peace with our piece, whether it’s a small win or small loss. This can really make a huge difference in our progress over time. 

Seems like it is another right of passage that every trader must go through. Most days we feel predominant peace and gratitude after our morning trading sessions with focusing on the long game. We can frame it and choose to see it as a huge win that we anticipated correctly what the market might do on a given day. That can be similar to a non-scale victory for someone in a weight loss journey. You don’t need to step on a scale to see and feel your body changing and getting stronger. This can be a non-P&L victory for traders. Reframing this experience is really beneficial because it focuses on the abundance yet to come within our trading careers. It’s ok that we only took a reasonable amount of points for our day and shut it down and then showed up for other parts of our lives for the rest of the day. This is us trusting that we have years and years to get better and take larger and longer trades. We intend to be traders for the rest of our adult lives. So for now, it is the healthiest for us to be at peace with a reasonable daily point goal.

 “If I miss the boat, it wasn’t my boat.”

~ Brene Brown

We talked about Linda Bradford Rasche in an earlier episode and she doesn’t monitor her P&L daily, but rather her equity curve on a month-to-month basis, which is a great way to maintain a neutral and peaceful mindset so you don’t experience the extreme highs and lows so much. We have still yet to master this, but taking a small loss early in your day is part of a winning trading process. It’s part of risk management which is our 1st job and top priority once we login and start participating. The work to qualify us has already been done, there’s no need to get creative and try to reinvent the wheel. If only this was more clear in real-time when we try to bend and convince her to move when we want her to because entering fix-it mode after a small loss can be a vicious trap to fall into. It can turn a day that can be easily recovered when tomorrow is fresh and full of new opportunities, into a destructive day for my accounts. It’s actually really really easy to do. A small red day is not a big deal in the big picture. There will always be more trades that you will see more clearly and be able to capitalize on. 

There are plenty of full-time traders that will execute several trades over the course of a trading day. But that is on another level and you should earn that ability with years of practice and experience. One of our mentors, Jermaine, has asked those of us in his group: What’s your number of trades that you can truly take within a day and know that you are remaining fully focused and intentional with. Many of our answers were between one to three trades, as was his answer. Point being: Trading can fatigue your brain. There is a very real risk that you can enter a trading trance and start focusing too narrow and be fixated on just your smaller time frame or only part of your data, and miss important factors in your ideally thorough trade planning process. We have certainly seen that in ourselves. Sometimes a nice, reasonable, smooth, green P&L morning can become a red day pretty insidiously. If you trade more, but with a lower mental capital, there’s a very real risk of giving back everything you earned that morning. And for us, when we are in our logical brain, we are not ready to take that risk. Every day we want to build our experience and our accounts sustainability.

This factor again reinforces the need to purposefully remain peaceful with our piece. Another way Jermaine recently put this to his students is “You don’t want to burn out your star player.” I loved that! It’s a great visual to understand this point more clearly. We need to swing at our best pitches with our strongest player before she is fatigued and less focused. Then allow her a proper rest and reset period before the next day of games! That is a sustainable and healthy approach if I’ve ever heard one! Becky even wrote an audio track for this subject last summer called closing time that we both listen to all the time when we need to shut down our trading for the day for one reason or another. It helps remind us of our intentions as day traders and encourages healthy behaviors. So, we definitely encourage all of you guys to put up reminders and incorporate habits in your day that help you shut it down if you have either reached your goal or your daily loss limit, or out of time for the amount of energy and focus that you truly need to trade well with. And we are definitely speaking from experience with this one. We’re still working on our trader maturity so it helps us to call it out and have discussions like these.

Another very significant component that’s big for this discussion is recognizing that NO position is A POSITION! In trading we experience a feedback loop, you enter and a trade goes in your favor or doesn’t and there’s a results driven feedback that we become accustomed to. Most of the time this is serving us. If we execute great then the feedback from winning is appreciated and affirming of our choices and abilities. If we did not nail a trade then that feedback is useful to learn the what, where, why, and how we could have improved in that particular performance area. For us, in the early years there was sort of an overload of feedback input. The truth is at that stage there was no real edge developed yet, just an intense motivation to click, watch, and repeat. One of the challenges we’ve faced since maturing a lot more in our trading is the lackluster, bland, and sometimes even boring sessions. These days feel like they’re not providing any feedback good or bad in terms of results and have made me feel indifferent at times. What we’ve found here is that the feedback is very much still there and valuable as ever, but it’s a different type and one you have to take intentional action to realize and actualize to receive. As we’ve studied our own good and bad executions, strengths, performance flaws, learned our triggers, and ways we’ve easily been tricked, we’ve slowly started to develop a keener sense of when we need to not trade. Like we’ve mentioned with the rest period for athletes, this time is necessary for the muscles to grow! We have some strong trading muscles we are building up and we will keep strengthening and this is one of the ways we’re doing that too with you all! 

Moral of this story? Choosing to appreciate and have peace with our piece is healthy, sustainable, an important component of a trader’s growth mindset in your early years. This discipline absolutely weighs less than the regret of turning a nicely green morning into a toxic red day. If you have any other experiences on this topic though, we’d love to hear from you. Email us any time! Thanks for being a part of the Market Mamas community.