I’ve been watching some news of today to turn my open positions red, and while repeating to myself 100 x “I will not panic”, I wrote down the following “laws”. Did I miss something? (Edit: was: “rules”, maybe “laws” is better. All possible similarity to Murphy’s laws is pure coincidence…)
[B]Beginner’s Trading Laws of Nature[/B][ol]
[li]Your first live trade will yield a profit.[/li][li]Your next [I]n[/I] live trades, where [I]n[/I] is a big integer, will yield a loss.[/li][li]Once you account balance has gone below the initial deposit, it is impossible to reach the initial balance ever again.[/li][li]The bigger the size of your position is, the more probable it is that the price will go against you.[/li][li]If the price of a pair is ranging and you try to predict the direction of the next breakout, your prediction will be wrong.[/li][li]If the price of a pair is trending and you try to predict the turning point of the trend, your prediction will be wrong.[/li][li]If you try to jump on a trend, the trend will turn almost immediately.[/li][li]If something unexpected takes place in the market and you panic, all you can get is loss.[/li][li]If something unexpected takes place in the market and you don’t panic, all you can get is loss.[/li][li]If you have a limit position produced by a system and there is market news coming, and you are not prepared for the news, your limit will get executed and the trade will invariably go against you.[/li][li]If you have a limit position and there is market news coming, and you do prepare for the news, your limit will get executed and the trade will invariably go against you.[/li][li]If you have protected your position with a stop and there is market news, the stop will be hit, after which the direction will immediately turn.[/li][li]If you have not protected your position with a stop and there is market news, the price will go against you until you finally decide to act reasonably and close it and take the loss - after which the direction will immediately turn.[/li][li]If you try to circumvent the previous rules and do just the opposite, your action will go wrong.[/li][/ol]Only when none of the above holds for you, you master the zen of trading and may expect success.
I may or may not have signal(s) to trade today, of which if I do, I will trade following my rules to the letter.
My trade may yield profit or loss, but as long as I follow my rules to the letter, I’m on the right track.
My calculation base solely on pips, the dollar amount will follow suit as my equity grows.
I have backtest and forwardtest my system to know that in the long run it will give me pips. So every pip loss in the short run only means I’m closer to pip gain.
I will evaluate my trades after every trade, but I will evaluate my equity every month.
In the tunnel of forex trading, I may not have see any light at the end of it, but I will keep going because I know it’s there, and I’ll reached it in … months or years.
This is unfortunatly so true! Damn Murphy and his laws!
First trade went very well, yeilded me .20 (with $30 account size) next trade not so well, not because I was wrong, nope I was correct but with the wrong timing (because I did a quick unauthoritive look at the market, not a through insight providing look.)
So far today I’ve tried the following (only did this once on my demo)
Getting mad at the market
Revenge traded
Upped my lots to ‘catch up’ (which in turn means I’m down a $1.75 now (6 or 7 trades later)
Went back to being cool-headed only to realise I’m about to be stupid again
Tried willing the markets…
Went back to square 1, realised where I screwed up (Didnt draw trend lines and only glimpsed at the news, didnt actually read it)
What does this mean? This means I’m kicking myself in the rear and am writing out offically a points system. The more points the more kicks
Its going to be a pre and post trade check list, if I dont follow the pre-list and it goes against me I’ll get points for being stupid (unless I did everything correct in which case I’m point free even if I loose the trade)
went looking to see if anybody else had the same idea, and found this…
Thanks for brightening my now financially ruined day (ok so $1.75 dosnt ruin me, but its a $30 account, what if I had $300, or $3,000 – hence the self kicking behavior )
I’m not sure if that helps any, however I’m tempted to try anything to stop doing the same stupid things I keep doing over and over again, although I’m getting better – Sorta.
)
