A Psychological Traders Log

Hi all.
Found my way to this site after months of trading, and months of mistakes.
Decided maybe the best thing is to keep a log.
Just a spot of background. Im 46, studied computer science and now do software testing which i find pretty boring. Started out doing pilot training - amazing time. Flew the T-6 Texan.

Hobbies are my main interest, Model Building, aircraft etc, and now trading.
I would love it if I can get to be a full time trader - so lets see.

I find it fascinating and challenging and slightly cheesed off that I only found out about this within the last 8 months. If i had known about this when i was 18!!, and if there had been an internet when I was 18!!
I would have had years to learn and become a mature trader.
anyway - here we are - grasping on with both hands.

I do not know anyone who trades (amongst freinds and aquaintances) and it almost seems to be one of the most secretive persuits. Thats not ntrue of course, but it just seems like it.

So I took to youtube to get my first lessons in trading and practiced for a month
went live and had great success for 2 months.
Then lost it all - almost.

Now trying to get back into it - with good habits and a disciplined mental state.

I have around $1200 in my account and am ONLY trading $US / yen.
I will record my balance whenever I do a post, but more importantly I want to record and possibly discuss the psycholigical side behind the trading and how I am holding up to what I have set for myself, as I had found myself doing things in trading going blatantly against good advise and logic, so strong is the emotional side of trading (for me).

My goals - long term (simplified)
To firstly regain my losses
To nreach a point where i can trade full time - and leave my job
Pay off my house
Build models at home and enjoy my hobbies while trading :slight_smile:

Well - thats me at the moment
Sir Blue Henry
(Newbie)

Welcome on the journey. Get ready for a rough ride. But persistence pays off. You just got to be a fighter. Good luck.

BlueHenry! With you all the way!

Goodluck mate!

Happy Trading! J

[QUOTE=“BlueHenry;602598”]So I took to youtube to get my first lessons in trading and practiced for a month went live and had great success for 2 months. Then lost it all - almost. [/QUOTE]

Hope you dont mind me asking,

What happened? Was it one big loss or a string of losses??

Ive halved a live account before - its not pretty lol

One large loss, and then a series of further losses.
Very simply - no stop losses in place.
Then using stop losses - continually hitting stop losses
Then deciding not to use stop losses again.
In a nutshell - too much haste to try and recover losses, and failure to use stop losses.
embarrassing - but thats what happens.
I have now had to calm down and do serious thinking on using the established risk management principles.
I know exactly what i should be doing, its just to listen - and do it.
and have patience.

The very obvious Golden rule to follow, is to get your stop loss into positive territory as soon as possible, and by soon I mean, within a minute. may sound strange but thats my choice.
I cannot deal with stop losses just outside of volatility and then continually ending up hitting stop losses.
But thats far easier said than done, but quite possble.
So I have tight stop losses to start, and at worst you will hit them a few times - while trying to establish a position.
Just my choice, though many may not agree.

You have to find an edge then exploit it. Stops are no exception.

Very true. at least i know what the edge is that I’d like to exploit. Just got to learn to do it effectively.

Now I am wondering - what are the frustrations that other traders experience? which would be a twofold issue.

  1. Frustrations that cause you to go against your rules.
  2. Frustrations around your strategy.
    Opinions?

[QUOTE=“BlueHenry;603649”]Very true. at least i know what the edge is that I’d like to exploit. Just got to learn to do it effectively. Now I am wondering - what are the frustrations that other traders experience? which would be a twofold issue. 1. Frustrations that cause you to go against your rules. 2. Frustrations around your strategy. Opinions?[/QUOTE]

When you Take your profits and then see it soar the way you were trading, RRRRrrr. Losing money lol

  1. A trade that “i think” is a “sure thing”. Never works out.

  2. To many constantly changing variables. Technicals that change often. Fundamentals changing that are pure speculation until released! < but i guess that is trading for ya lol

My main frustration was not believing in my strategy after a string of losses. I was right not to believe as I never tested my strategy over years of past data to see how robust it was. Once I done some back testing a whole new approach to trading began. In fact so many options opened up & then I realised how much work I have to do to believe in my strategies. I felt alive again. The future looked promising again.
Now I have a complete scientific approach to my back testing. I have credible data to cross reference my strategies & find ways to tweak my rules to squeeze maximum yearly profit whilst being robust to all market conditions. This is the hard work needed to believe 100% in your strategy & emotional control. I no longer trade any strategy until i’ve rigorously back tested it through all conditions. Now trading the live markets are effortless & losses are just part of the job. I can trade through my losses knowing the end result will be profitable. Maybe not this week or even this month, but certainly by the end of the year. I have confidence as I have done the hard work & research to see this through.
Conclusion:
Frustration contained.
Profits building.
One trader happy.

OK - thanks for the insight. something i sort of only partially understand, maybe you can elaborate. Now I know since market conditions will be different for each day/ week/ month/, but when you say you may not be successful for a week or a month, that sounds a bit extreme to me. I may be totally wrong, but if you are not successful for a month, and yet followed your strategy correctly, why would you not be successful. Just wondering.

My frustrations would be primarily in not following the strategy, and secondly I suppose in trying to force the issue, in other words, overtrading in stead of patience.

No strategy will work 100% week in week out. You will have losses. Now you may have small losses or maybe consistent losses which add up to a large loss. My point being, if you have done the necessary back testing over many years, you will understand that sometimes the market will be against you no matter how good your strategy is, but if you have tested your strategy through these difficult times then you will stick to the plan & just keep taking all set ups that apply. In the end you will be profitable.

If you have not done the necessary back testing then you will not stick to the plan after a series of losses. There will be no belief in your strategy. Psychological problems will surface & doubt your trading plan. You will change the plan & therefor be a gambler with no edge.

Your belief has to be in your edge.
Your edge has to be proven in your back testing.
Back testing give’s you confidence.
Confidence allows you to take losses.
Taking losses allows you to follow the plan.
Following the plan make’s more money by the end of the year.
Conclusion: Professional trader.

This is the psychological loop you have to get your head around. Any other way is failure. If this does not make sense now, then im sure one day in the future it will.

Very well said! Definitely worth keeping in mind especially for newbies thinking of giving up on their trading plan just because of a few losses.

Thanks for the reply & support. A true trader you are.

Thanks for that. Very well put. Much to ponder.

Thanks BlueHenry. It will be worth pondering over. Unfortunately its a catch 22 until you find a profitable strategy which is suited for you as a trader. Strategies are not the problem as there are many profitable strategies out there. It is us who are the problem. We want everything on a plate & therefore don’t do the homework or testing needed to find out about oneself as a trader. You have to do the hard work just to know ones self. Then & only then do you understand that trading is not difficult, but belief in one self or ones strategy is. Once you have proven to your self that you are worthy to trade ones strategy do you become successful. Its a self fulfilling prophecy. Welcome to the world of 95% loser’s. Which side do you want to be on?

Ok - been having a bit of success lately again in demo account. Live account waiting till I am more settled in strategy.
Frustrations seem to occur only when I do things based on what I think. Full stop. Success when simply following strategy steps/rules, sometimes against what i think is going to happen.
Progress slow but sure.
Not much frsutration at all when I trade with more patience and simply follow the plan. Or should I say - the frustration i do find present is that I am wanting faster response. In a life where everything is quick reward, be it entertainment or communication, one almost expects trading to be similar - which some days it would be, but in general patience and following the strategy mechanically(more or less) has benefit.
I suppose in tha regard one could almost say that an hour of screen time per day would do the trick, then just leave things alone. Do other things.
Just some thoughts for the day.

More success overnight, but then a few days in a row count for nothing. But anyway - so far so good. lets see if I can keep up good habits for the whole of March. will then go live in a new account with $100, and use the existing account again.
But trading demo is what i need at the moment.
Take profits commonly 0.3 to 0.5 or just manually taking smaller prifits when opportunity is there.

Hey. Welcome to baby pips. I’m only 22 (turn 23 this month) and I am certain there is no better time or age to get into Forex than this present day. I started my trade journal back in November and it certainly has helped me. If anything, It has shown me how far I have come and how many hoops I had to jump through and occasionally get burned on.

I like the two questions you had in the beginning of the post having to do with frustrations.

  1. Frustrations that cause me to go against my system? Losing a trade. Since I trade very high risk, high leverage, I need an extremely accurate/high winning percentage system. If I can’t go at least a few weeks without losing then I write a new equation, make a new rule or modify the system to fix the flaw I believe caused the incorrect signal. I don’t just make up random rules, I search, think and ponder endlessly over what exactly happens as the market moves that is a very accurate and logical indication of what the near future will do. It takes lots of trail and error to find logical solutions, and I admit over the past few months I have updated the system less and less over time which is a good sign. I don’t mind losing so much… but I want at least 2-3 weeks before I lose and i want the system to continue to work again after the loss worst case scenario (lots of systems I have built fail completely after 1 loss it seems like). My record is 14 days straight wins and my goal is to hit a streak of 40 or 60 days in a row wins. If I can manage that and make just 50 pips a day (I think i need 100 pips for 40 days), I can turn $100 into a million in that period of time… sounds insane I know, but it is definitely possible. I did the math xD

  2. I think this was frustrations with the system? My biggest frustration has nothing to do with the system so much as it has to do with the time frame I trade. I place one trade per day in only one pair (at least for the next few weeks, for now I only focus on AU)… So each day I have to wait the full 24 hours as if I am being tested. Right or wrong, win or loose. Also, every time I make an adjustment to my system, once again I have to wait the full 24 hours to see the results on the first day, then obviously continuously forward test it and get graded on my results daily. I’m young so I have time to work on my patience, but I have to admit, it is most definitely the most frustrating thing about my system… waiting for the trade to have the full day to perform.

Yes - im sure everyone has their spreadsheet showing how $100 can become anything, million, 100 million, billion.
Its all possible, and of course what many are striving for.

Yes I like the idea of making so many days without a loss. I did achieve that as well, but only because I wasnt using stop losses, and then every now and then the worst happens and you loose big time.
I would say that what you, and anyone, needs to ensure, is that you can make consistent gains, 2 weeks, month, 2 months, but also allowing for smaller losses, and never actually be in a position to have large losses depending on chart movement.
if you can get that right - we will make our million. but setting yourself up to be open to large losses is gonna really hurt when you have 50000, 100 000, 200 000, 400 000 etc

and High risk!! that doesnt sound great, yes big gains, but along with that, guaranteed large losses.
but lets see what you can do. i watch with interest