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Sunday, June 23, 2024

Rolling Five Day Sequences – YourTradingCoach.com

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Let’s look at a slight variation of the “One Week Five Innings” concept discussed over the last two years.

The background first for those who might have missed it:

These articles asked you to consider a slight mindset shift. No longer seeing each day as a unique game that you try to win. But instead, seeing each day as just one part of a much larger (5 innings) game.

<image: One Week - Five Innings> 

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This is a mindset shift that takes some of the performance pressure off individual days. A mindset shift that allows you to more easily cut a session early, at a small loss, so that grossly unfavourable conditions do not destroy the whole week.

A mindset shift that allows you to more easily put aside frustration and disappointment from a poor performance, because it’s only one fifth of the real game and you’ve got time to correct it.

Five innings – with an opportunity between each to adjust your game plan, ensure good process, and manage your behaviour and mindset.

And most importantly as you get towards the end of the week – adjusting your game plan to lock in gains and ensure you don’t stupidly give them back and screw up your weekend (come on… we’ve all done that!).

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One week. Five innings.

But maybe we can do better?

Variation of Concept

I call this the Rolling Five Day Sequence.

Perhaps more correctly, it should be “up to five days”. But let’s keep the naming simple.

My aim here is to get away from the fixed five-innings timeframe of Monday to Friday. Let’s not be so rigid and inflexible.

Sometimes you need time off when your non-trading “life” gets in the way.

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Sometimes you need time off because your mind is just not in the game.

Sometimes you need time to stand aside from the markets, waiting for unfavourable conditions to pass. There is no rule that says that you must fight back from drawdown, in the same conditions that put you in drawdown. Or that you must fight back from drawdown on the same day that you placed yourself in drawdown. Take time out. Reset yourself. And then go again.

So here’s the plan.

(1) Each sequence includes UP TO five sessions.

(2) At end of day one, if the sequence is in profit, you win. Reset and start a new sequence the next day.

(3) But if the sequence is not in profit, continue with day two (then three, four and five if necessary) until it does show a profit. Then reset and start a new sequence the next day.

(4) If a full sequence of five sessions fails to show a profit, take time out for a deeper review (was it the market or you?). And then reset and start a new sequence the next day.

Some examples might help.

<image: Five Day Rolling Sequences>

<image: Five Day Rolling Sequences>

<image: Five Day Rolling Sequences>

<image: Five Day Rolling Sequences>

Essentially we’re gamifying our session management.

But it works because we’re taking a longer-term view of this game, seeking profits over a series of days rather than feeling we must profit every single day.

With the advantage now that any sequence drawdown always starts on day one, giving you up to four days to reset yourself and fight your way back to profits.

This idea won’t appeal to everyone. I’ve come across some who completely reject any thoughts of gamifying their trading.

But for those of you who are fine with that… give it a try. We’re taking the focus off individual days. We’re removing the pressure to perform EVERY SINGLE DAY. If you find yourself struggling to adapt on any particular day, you’re allowing yourself permission to stop with a daily loss while it’s still small and easily overcome, because you’ve got four more days ahead of you to hit that target.

Give it a try!

Happy trading,

Lance Beggs



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