I thought i know how to trade, but after some… i mean… a LOT of losses, I know i am not ready yet.
i joined BABYPIPS to further my knowledge and skills on forex trading.
Gotta get back to square one, learn the basics again and again—this time with an attitude of a toddler trying to learn how to read and how to write, with the grit and determination of a baby that’s just starting to learn to walk.
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Good mindset. Welcome. I hope it works out better for you this time around. First and foremost, learn how NOT TO LOSE MONEY. That means careful control over risk and money management.
Key is to cut running losses quickly before they get stopped out. Don’t think it will reverse in your favour, likely not. Then use the savings to fund a better trade. There’s always another one awaiting. I hate losing as much as everyone but I hate losing big, more so.
Then you could still stay in the game to learn more while others fall by the wayside. Without capital you cannot trade live.
best of luck.
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I admire your courage and honesty and determination.
If anyone is trading but not consistently profitable over any meaningful time period, stop and revise what you’re doing. Trading more will not solve the problem. Nor will trading bigger, nor trading on shorter time-frames, nor moving to a different pair.
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Haha. I’m in the same position as OP.
Yesterday, I traded a larger than usual lot size on the USD/CAD on D1. I was going short, but the range pattern was too clean. It looked like a set-up to pull in some suckers, and I knew it. But I ignored it.
I got eaten alive. My instincts warned me, and I ignored them.
So, I gotta do like OP and check my ego. I was doing better this month, trading 0.01 lots.
Not scrapping my strategy, just gotta rethink my trading psychology.
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I was short yesterday and I too got stopped out. But it was a tiny loss as I’d got in on the 19th and dragged the stop lower since then. It was an optimistic play as the bearish momentum has drained away - see the weekly chart - last week’s range overlaps with no less than the 7 consecutive prior weeks. the 20EMA had of course started flip-flopping.
I had been riding USD/CAD for a bit as well, and the major trend is still bearish on W1–nowhere near the MA20, plenty of play room.
So, I ASSUMED it would keep going. But that’s how the market got me. The greed.
“It’s been going down, it’ll definitely keep going down forever and ever. I can’t lose!”
I didn’t zoom out and think “well, what if it tries to test the MA20?”
So, foolishly, I traded a larger lot. Bam!! Stopped out.
I pretty much stopped trading for the rest of the day. I was just window shopping, from then on.
But, my instincts warned me and I didn’t listen. Trading psychology, again.
@croissant20
What knowledge of forex did you have before coming here?
Did you have a lot of experience?
Risk per system over risk per trade. Once you can make money every single time you sit down for a few hours, you will be able to make money every single time you sit down for a few years. Until then you do not have a working system.
Better yet, learn how to accept losses as part of trading. If you’re constantly cutting your trades short then maybe you’re putting your SL’s in the wrong place, or risking too much.
Excellent work. This is a big step in surviving to trade another day.
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I think “how not to lose money” refers to a monthly basis.
Don’t try to double your account with big wins. This is where greed gets us.
Instead, in the beginning just try to have a month where you break even. Lost 5% of your account, won 5% of your account.
After that, slowly build up your account.
I think that’s a reasonable goal.
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That is not what I am reading here:
Which does not sound like a sound strategy, or advice IMO. Your stop should be where you want your trade cut off.
Of course the goal is to not lose money, nobody can argue that. But you should have a plan for your trade from beginning to end, and see it through.
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And that’s what’s incorrect, Matty, if you’re going to stay with your trade until it gets stopped out. With apologies, mainly because you (and most others) don’t want to accept that you got it wrong. It’s a psychological emotion - and which could lead to overtrading, revenge trading, and drawbacks.
I trade my trending system. My S/L is set at a 1% risk of capital or as close as I can get it. My hoped for profit is 1:1 at worst, depending on the strength and duration of the trend.
As you are probably aware, today’s political market climate makes it likely that even the strongest trends get retraced with the risk of trades being stopped out. That’s fine with me, I’m used to it and I manage my trades accordingly to minimise my losses. Which is key money management, IMO.
I’m not a Time Traveller and without being able to see in the future, my plan is to cut losses as soon as a losing trade reaches 0.75%. I use the savings to fund a better trade, there’s always one awaiting. That’s my plan I’ve seen through to its bitter end. Without hindsight, at the time of cutting it’s mathematically correct, IMO, because I don’t know the eventual outcome and I’m not sticking around to find I’ve been stopped out.
The reality is that out of five known occurrences when a trade is entered, there are two that need cutting, and only one that needs nurturing. Forex trading IS all about NOT LOSING MONEY - especially not losing big, rather than focusing on making money. And this is how I play it because I’m certainly not concerned about cutting losses. I got it wrong, that’s it. Move on.
I hope that clarifies my approach.
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Hi Steve,
I suppose there are different factors at play, obviously, including strategy (big one) and how much time one is willing to invest monitoring trades.
But we will have to agree to disagree on this, because I stand by my statement.
I know you use Ich. and a couple other indicators to enter, but what is your exit signal/strategy other than the 0.75-1%? Or maybe you buy/sell and hope the trend takes you to your 1%? If that’s the case then your 75% logic makes more sense, in a way.
For me, my stops sit just above/below a swing high/low, S/R, S/D level…whatever terminology you want to use (not that important to me), so I know exactly when my trade is void, and that’s where my stop will get hit. I can also tell you that at 75% my trade is nowhere near finished. I’ve seen price come within a few pips of my SL and turn back around into profit.
But then there have been times where I’ve closed early. Maybe I took the trade in a hurry, or was not completely confident with my analysis. And yes, I can understand your position as a long-term trend trader, as your SL’s are probably much wider than mine.
I agree. I don’t think cutting a losing trade is strategic. If you keep closing trades, you won’t know if your stop was in the right place or not.
Often, price will turn in your direction after you closed your position. I think it’s wise to set your SL, and just leave it. If you get stopped out, review the chart after, and you’ll understand what happened.
If you cut it short, and don’t allow the trade to to run its course, you’ll never know where your error was.
hi Matty, I don’t think we agree to differ. Each trader has a procedure that works for him/her. My exit strategy is to trail the trade up to the S/L to reach breakeven, then I can’t lose - and follow it up using trailing stops.
With losing trades at a 1$% hitting 75% of the way to S/L you’re going to lose 15 out of 20 trades (25% = -$375 extra) and reliving 4 (+$100) with no guarantee you’ll rake back the 75% and then make a profit.
It just doesn’t make sense to run it further because you’re in a high losing position. In fact, I would have cut it earlier around the 50% mark - or even sooner.
Why.?
Because it’s a recognised losing trade, just as clear as a recognised winning trade. Which is what top pros don’t reveal to the masses. I got lucky when one explained what happens when he enters a trade - any trade. Most people have no clear understanding at what’s most likely going to happen around and after the first ten minutes. They will let it run. I have my edge there. And it would cost you many PIPS until you are informed.
While we probably are trading small beer right now, I do not know of any of the top pros who doesn’t regard cutting losses as being a critical part of them remaining consistently profitable. On a $100,000 S/L trade, would you let a $75,000 loss position run to $100,000 when the odds of it hitting the S/L are so massively against you?
Anyway - good to exchange ideas - it’s been interesting.
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I do set a stop loss always. And I do move a winning trade S/L closer to the breakeven point which is my first aim. If that happens I can’t lose. It really is that simple. However you play it out from there is up to you.
I have the time luxury of following a trending trade until I recognise it’s changing direction and the strength is weakening. Apart from the obvious candle directional change, I have three indicators to correlate and support this before it happens. Then I scalp a profit because I can always enter it later if and when it resumes the trend.
Cutting losses is what pros do all the time because they also get it wrong. No-one knows what the market is going to throw at you. Believe me, I hate losses, as we all do, but I hate losing big even more so. That’s why I cut and accept I got it wrong. There’s always a better trade awaiting and I’ll use my savings to fund that.
I might have it wrong, but I think that was a part of the Turtles trend strategy. Close and reopen later.
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