Painful Lessons-a discussion

So as a newbie, all of us are fresh to everything, and have no expectations on what goes on in the market. We are quite naive in a way, and so, more often and not, we learn our lessons painfully by taking losses to our account. Whether its by sheer stupidity on our parts, or some technical issue, in this thread we learn from the pains of others, in hopes that we won’t take anymore hits to our bank account. Here is my list to get things started:

Learning about weekend gap by leaving a trade over the weekend- then found out SL’s are completely skipped over and ignored-

I took a serious hit from this one on market open sunday, when my trade autoclosed wayyyy past my Sl, and my SL became a trade in the other direction, which I had to manually close. Double whammy. I notice that price usually doesn’t travel too far away from the friday closing price, but I mean, unless you have a 100 pip sl or you are a long term trader, avoid the weekend gap at all costs! During a trading day you can exit at -10 pips, -100 pips and anywhere in between. The gap has no leighway for people like me, who has a 20-30 pip sl

Leaving unused entry orders- thanks to last nights bank move that completely caught me off guard

EVERY ENTRY ORDER is a sitting duck. Assume that no matter how far, there is ALWAYS a chance for it to trigger. So unless you are 100% certain about a play, dont put an entry order! I was organizing my trade by setting up entry orders all over the place and trying to figure out lot sizes, price levels, etc when the spike hit, and 300 pips within minutes triggered and exited all of those entries… that was never meant to be used

Heres my last 2:

Trying to “make a quick trade” on fridays before market close. I mean, setups will always be there, there are literally tons at any given time for someone to trade. What are the chances of you making your super awesome pipsful move 2 hours before the market closes down? You feel rushed, you are unprepared, and you are just not 100% ready for trading.

And lastly, trying to trade in an unfamiliar environment (seriously trade anyways). You NEVER know how good that connection is… until it crashes on you! I had entered a trade at market value, and the internet COMPLETELY DIED before my SL was entered. I’m sure you can imagine all the horrible things that could happen while you’re account is a sitting duck, especially if you are not trading small leverage. In this case I didn’t lose, but the realization is that I completely could have (I called like 5 people had them download my platform, log in AND execute my orders for me, so I was lucky).

Share your stories!

I called like 5 people had them download my platform, log in AND execute my orders for me, so I was lucky

LOL I like that part.(been there done that) good advise. Your connection can go down any time anywhere. I will add… if you use an EA running on your local computer like I do, to manage your stops and TP you still need to put a stop on the brokers server. It can be bigger then you would normally use but you should have something just in case.

Always remember not all pairs are created equal. I set up a trade before for 5 micro lots 30 pip stop. Didnt take into account the actual pip value since I was trading EUR/JPY was higher than my standard .10 per pip per lot that I see on EUR/USD. Wound up risking more than I wanted to. Not to bad of a mistake as it didnt cost me much. but something to keep in mind when opening a trade make sure you know the pip value.

I agree with Jwlee dont forget to cancel pending orders once they are no longer valid. Especially Stop losses after you close a trade. Not all brokers close them for you like mine does now. My last broker did not and I learn that leason the hard way. If you forget to cancel a stop it is now a market order and will open a trade if tagged. I took a heavy heavy loss on that one.

Remember your life outside these screens and enjoy it. We work to live not live to work. I know we spend alot of time researching and analyzing markets and thats fine to love what you do. But never forget why you do it.

Dont forget to get sleep. I have noticed this in myself from time to time. Waiting for that setup you know is coming and stay up later than you should. Rest is vital the markets and setups are not going anywhere. Unless the world really does end in 2012 then there is nothing you can do about it and a few more pips wont help you. You are no good to yourself if you cant focus on what you are doing because you are falling asleep behind the wheel. I think alot of people dont even realize this one actually costs alot of money. You hide behind the excuse “I didnt stick to my plan” “I didnt follow my rules” and this might be true but ask yourself why didnt you. Could it be because you were just tired. Yeah you can say thats lack of discipline but dont kid yourself. We are all human.

Thats all I got right now I am sure I will come up with more. I bet nobody would have thought of the last 2 and people just dont realize how much this actually costs them. Focus is a major factor on the success or failure of a trader. This is both physical as well as mental. Focus plays a major part in a traders discipline as in his ability to progress as a trader. You cant progress if you cant maintain what you have.

I lost 30K once while I slept, because of a computer glitch and a hinkey power outlet.

Top that babypipsters.

Jay

Can’t top that Jay, but painful lessons nonetheless…yes…been there too…lol. Mine was the loss of confidence in my trading plan right after I started live. After the first 2 years I thought I had it all figured out. Of course my plan didn’t really include a stop loss, and just before going live, my demo account tanked from $5k to 1 in one bad trade that just didn’t come back. So when I went live, that possibility freaked me out anytime the drawdown in my trades got to my “mental” stop area and all I could see was it getting worse like that last demo trade so I’d close it early at a loss, and then see it go back in my favor. Then it seemed my whole plan just fell apart when I put in a stop because it hadn’t been part of my plan before. So, I lost half my deposit before stepping back to demo to figure out the stop loss part…that was 2 years ago. Good news is, after learning, trying out and discarding several new methods, which takes awhile to do when forward testing and on top of that, only part time, my latest demo of 100 trades (with stops) seems to suggest it may be time to try again…right after New Years :slight_smile:

I’m looking forward to the New Year, as should all other traders who are thinking about taking the next step up to a live account, or even live traders that are looking at trying out new adaptable trading approaches. I guess the market conditions, from a day traders point of view such as myself, is that this is the new ‘normal’ day to day movement typically seen. Of course there are going to be exceptions to this, so don’t pick me up on that!!

My biggest lesson, which has now been learned, is when it comes to back-testing. I’m talking about testing over historical data the long and dull way…you know, day by day, month by month, year by year. No EA is being used, it’s you doing the grafting. I always use to say to myself “of course I would have bought/sold here, its obvious that price was going to respond that way after opening”. In short, we ALL trade from the far right hand side of the chart, so being HONEST to your self is well worth learning.

There is some advantages to back-testing this way, sure you clock up thousands of screen hours, I demo back-tested for over two years. Each and every day I would spend at least two hours doing this. I suppose when you start to get what look like good results it then motivates you to continue doing more. Almost as if the hard work is finally paying off, no?

I wont continue stating what we “Experienced Traders” already know, apart from the fact that personal honesty is key. You will soon realise when you open a live account that your a big fat liar if you start loosing money much faster than you originally anticipated. :slight_smile:

James

Glad to hear sweet :slight_smile:

might i inquire if said plan includes anything with supply/demand daily zones? :slight_smile:

Jay

Yes it does Jay :wink:

Pffffffffffft…

Like those matter.

Any really good trader knows it’s all about indicators.

As a newbie I learn’t this - don’t allow computer updates either - i was in the process of putting in SL and decided to ‘install updates’. My PC decided to have a slow moment then 10 minutes later the price had moved 100 pips against me! Oh also going out and working on your golf swing won’t bring the market back in your favour either.

Heres a lesson from last night. Doing anything related to trading while drinking alcohol. I actually dont drink that much nor have had access to mobile trading, its actually not something i ever considered being in that situation. But no excuses it was a Seriously HUGE mistake, no I didn’t lose money, nor entered new trades. But that’s not the point. Maybe it would have been better if i did take a loss. the point is looking back i know how f-ing DANGEROUS that was. Basically playing with my life blood, you know your capital while basically with the mind of a 8 year old. This is something that’s going into my Sacred Mistakes and Lessons learned list.

I can totally relate :slight_smile:

I can relate to forgetting about unused entry orders. With my first live account, that I blew in 3 months, I forgot about some entry order that triggered while I was asleep. When I woke up it had actually gone in my favor and that was the best trade I had with that account! :slight_smile:

In total i blew three accounts, the last two i was doing carry trade but overleveraged, today sometimes i do carry trade but with ever 100 USD invested i open a position with just 0.01 micro lots.

Regards.

Figuring out your SL and TP before you execute an order. Too many times I’d enter a scalp when a trendline broke without a clear idea on where to exit. :frowning:

Ahhh…

This is an easy one. Just look at any posts of mine prior to, say, 2009!!! LOL!!!

Regards,

Dale.

Double check all your work before you submit an order, especially if your broker takes weekend orders/trades. Man have i put in limit orders incorrectly and had them become marketable. Having to eat a 10 pip spread or more sucks really really bad.

NOT reviewing all of my losing trades - a mistake I still on occassion make to this day, i’m a bit embarrased to say.

At least I can say, on the level, I review the vast majority of losing trades.

Most don’t even realize this is a mistake they are making. Trust me, it’s possibly the biggest of all.

And, if your still not profitable yet? Yea… this mistake should be near the top of your list too.

Jay

Mistakes. I made them too. Albeit not in a fashion to blow accounts. Closed one in profit and working now on the second one.

I did learn from others. Reading. It’s all there in the net for free. Listen to those who are not too euphoric. Well, then also think. There is not such a thing as thinking too much. You can only think too less. Don’t just believe in anything you read, but think about it. 95% of what one can read is utter nonsense, so it’s your job to filter out the nonsense and go with what is good information.

Mistakes belong to everything you do and sometimes it generates pain. That’s not different in trading. Anyways, don’t let a small mistake become a huge one! Always use a stop loss and calculated risk! You may lose some equity of your account, but only what you risk on that trade and not your whole account. After a few days you will be thankful for that small loss.

Oh and yes, I can suggest (back)testing as well. Without any testing for less than ~ 2 years and 100 trades one trades more or less based on hunches and luck. And even with those tests it doesn’t say you have a warranty for success. You just know then what your edge is and your max. risk. Which sets you apart from most of the losers who have no stop, no risk/money management and no clue, anyways.