Cartesian doubt in Trading

1:34 AM


I'm having problems with my performance lately, and coming to the 15 December to 15 January. This is typically a no-trade area for me.

However, in studying philosophy, I have decided to apply Cartesian doubt to this age old belief and to my performance.

Cartesian doubt is a systematic process of being skeptical about (or doubting) the truth of one's beliefs, which has become a characteristic method in philosophy. This method of doubt was largely popularized in Western philosophy by René Descartes, who sought to doubt the truth of all his beliefs in order to determine which beliefs he could be certain were true. (Thanks Wikipedia)


1) Performance

I have been unusually panicky, jumpy and emotional about my trades since making it on the popular investor editors choice.

Why is this so? Pressure.

Image result for pressure free throw
Source:http://axonpotential.com/wp-content/uploads/2011/04/freethrow.jpg

I used to think I was immune to this, given I used to play basketball quite competitively, and was known not to choke.

However, when I observed my performance over the past few weeks, I did notice a considerable increase in stress and pressure, and a reduction in performance.

Let us take a Cartesian doubt approach to this. What has changed? Other than the number of copiers I have, the AUM and the popularity, my one year challenge, my system should remain largely unchanged. Entries, exits, TP and losses should all be same and not affect the system.

I had been, however, overtrading, been more plugged into the market and absorbing too much news, thereby forming news bias, and been too hasty.

eToro was designed to make the least amount of stress for popular investors, but I placed the pressure on myself which is unnecessary and affecting my performance.


2) Period

The reason why I do not trade this period is due to the rally that comes towards the end of the month as window dressing is done by the hedge funds. So typical technical and fundamental analysis does not apply. However, since I am using a combination of techniques, does this still apply?

So I tested my system against this period for the past 3 years. Out of the 45 or so trading days (less New Years, Christmas and their respective eves) my system produced a loser, twice.

That is much much better than my usual. So opportunities should abound.


Conclusion

- I am putting a lot of pressure on myself and it has been affecting my performance.
- Popular Investor Programme is great, but can cause stress if we are not self aware of it.

- The age old wisdom of not trading towards the end of the year and the start of the year does not apply to our system, we should continue as per normal.

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