The next six trades are crucial

There is a negative psychological punch that takes place when a profitable trade turns into a losing one.  It’s like having to go to overtime in a game that your team was leading by a wide margin.  The team that ties the game has always the psychological advantage going into overtime.  I’m getting near to that level with my account balance.  If I get below $10,000 I will stop trading for a while.  I don’t want to tie or lose this “game” as this project nears the one-year mark.  I have a $3,000 buffer left and I’m willing to risk $500/trade.  Which means, if I continue on the bad streak I’m on, I can lose the $3,000 pretty quickly.

I’ve said it before that trading with this size account is very challenging.  Risking 5-7% of equity per trade is a recipe for disaster for a beginner.  But I’m not a beginner and I was willing to test the tried and true theory, in hopes of getting to an account size that allowed me to continue to trade $500/trade, but in turn make the relative size closer to 1% of equity (i.e., turn my equity into $50,000).  I’ve gotten close.  I’ve hit $30,000 at some point.  Hindsight 20/20, I messed up by not sticking to my original $500 risk plan, but increasing the risk to try to double the $30,000 balance faster.  Eventually, that type of risk comes begging for payback.  That’s what has happened in the last two weeks.

Now we have “3 minutes” left to play.   We are going to be careful.  I’m going to take one trade at the time. I want to make sure we win the next 12-month game… 🙂

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