Brandleesee - My Active Trading Journey

Good day to all,

First I wish to thank the Forex subreddit that has a link to volatility.red/Forex in turn recommending the free course at babypips. Had I not started with that subreddit I am unsure whether I would have heard of babypips.

For my introduction, I wish to remark that I am not a newcomer per se in the trading and investing world, however, a couple of years ago lost all the money that I had assigned for trading (therefore, that portion that I was willing to lose) and put the blame on two very distinct factors. One was my emotional response and another to cheap hardware.

Starting with the latter, I had the notion that I could trade on an old smartphone. I now understand that that is a no-go unless having purchased a proper phone for the job. Nowadays this no longer seems to be the problem because, in my opinion, even the cheaper ones are solid for the task. I know because I have started afresh with a cheaper smartphone which has so for not let me down.

Going for the more important notion here is the emotional response. I cannot make daily trades unless I keep in check my emotions. Whole volumes have been written on the subject. So my purpose here is to consolidate my knowledge on trading, more so on technical analysis, while hardening my emotional frontier using known and valid literature that deals explicitly with how to react to negative or false-positive news and market movements.

While my aim is to day trade, I am aware that this is not recommended for beginners (and in certain circles not even for professionals) but it is a challenge I wish to undertake.

At the end of the day, the target is to make money like any other job for that matter. Hence, if I cannot bolster my account then I might as well stick to my current employment.

To a fruitful relationship,
brandleesee

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Apart from learning from this great site, here’s a link that could be helpful regarding emotional control; https://tradertom.com/

Wish you all the best for your future.

@steve369 That is a very interesting link, thank you for sharing.

@RosiePalmar Thank you Rosie for your well wishes.

Happy festivities!

Hi and welcome… :slightly_smiling_face:

Thank you @gabesj :slight_smile: Happy festivities!

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Hello, welcome to the babypips. Here you will find the most important information you need to know for the forex market. Be sure to check out the educational tab.

Hi, welcome to the babypips. Be sure to check the educational section!

@OskarNilsson & @StankaVitanova thank you and happy new year :slight_smile:

Hi, welcome to babypips. I hope you will contribute to the forum by adding more experiences and insights about Forex trading. Thank you for sharing your thoughts.

For a new trader getting into trouble due to emotional trading is common, its a lesson which everyone has to learn.

I would suggest getting into a simple objective strategy and using a demo account. Set your entry order according to your strategy rules, set your stop-loss and set your take profit order and don’t look at the platform until after the next close. If your order has been triggered, just wait: do not adjust your SL and TP. If your entry order has not been triggered, you may need to either adjust it or cancel it according to the rules of your strategy.

Do this 100 times and you will have your emotions under control under all circumstances. When you are making money this way open a live account and do the same thing 100 times there.

It is less to do with beginner or professional and more to do with time availability and personal psychological traits. Some people are fine with it and others will need to zoom out and focus on higher time frames. It’s about finding what fits in with you best. Day trading and even scalping sounds fun to beginners as it’s quick turnaround but if you aren’t a fast paced kind of person and can only get onto the charts for a handful of minutes a day then it’s not for you.

@Laurent_Goychman Thank you for the warm welcome. Indeed, besides accentuating my learning curve I also intend to share my experiences in this journey.

@tommor Emotions are, in my opinion, the hardest to harness - even more than the application of analysis and prediction techniques for these involve study and skill whereas emotions are all a play on our psychology. To be honest, I have been using my own funds to practice - ever since I had my interest piqued so now I find it unappealing to paper trade. Having said so, the money I trade with is that money that I can do away with, therefore, I have no immediate need and I can live with losing same. This does not mean that I would be happy to lose them or that I would not be upset if losing them. That would be part of my personal exercise to keep my emotions in check. Trading with real money.

@cashisking86 To add to your comment, even the method that trading brokers/platforms earn money makes a difference. I just experienced this a week ago. One particular mistake I have made throughout my trading on eToro was not caring about their pricing methods. While I have since adjusted to keep this in mind, I had one investment going red that I wanted to resolve. I did so at the expense that the time taken from buying said investment to selling same accrued $65 in service fees/costs. So not only was I losing money but the additional expenses added a further substantial blow. The lesson learnt is that adding to a sound strategy and a hardened psyche knowing the costs attributed to a trade is essential too.

Not to start a new topic in any other discussion boards, I’ll keep this as my journal of sorts (mind you this is not the trading journal just a thread I update every now and then).

I try to consume financial literature and learning materials while juggling employment, family and tertiary education (in the EU we call it so!) - pretty much like anyone else here, probably with more on the daily to-do list than mine, but alas I am writing my own thoughts here. Any comments are welcome otherwise I would simply write in a private text file or host a private one on the cloud.

In any case, today is one of those days where rather than firing up my broker of choice, I ploughed through the tens of unread emails which are mostly subscriptions to trading newsletters peppered with that occasional nugget of knowledge and the less wanted advert to invest in this vehicle and pour money in that other.

Two of the more prominent newsletters I frequent are BabyPips (go figure!) and TradingView. And in those I found some insightful thoughts which I will keep here for my use whenever I want to take a stroll into the trading memory lane and for you who enjoy clicking every link you find (I know the feeling I am one of those, especially on Reddit where there is little to no preview of the contents of the soon-to-be-clicked link).

Speaking of the memory lane, I have just been re-introduced to the concept of listening to myself as I trade. I used to take advantage of this practice when I was engaged to give a talk and for employment interviews. All I did, as I remember, was to sit formally and start reciting the talk or answer the most frequent interview questions. All this is to identify vocal pitfalls (meaning that I was not really convinced of the argument or downright unfamiliar) and to ensure that the chosen language and phrases are the right ones for the task at hand.

Returning to the notion of listening to myself as I trade, BabyPips (1) reminded me that there are clearer advantages for the trader who cares to immerse in this practice. Essentially, when giving voice to what is being experienced concisely and factually keeps the brain in tune with the task at hand (trading). However, when projecting our emotions, irrespective of whether these are in favour or against the current state of affairs would effectively be arresting our decision-making prowess. This seems because, physiologically, emotions seem to suppress the ability to reach decisions.

Delving more into the act of trading or preparation thereof:

The tricky business with Expected Value is that Bat Rate and Win / Loss aren’t hard numbers. They are estimates. Thus, building a feel for the likelihood of something happening, and building an understanding of the amplitude of wins and losses is a key skill to build for trading and life. An easy way to better calibrate your antennae for this is simply making a note of what you expect to happen in your trading journal. Over lots of repetitions, your ability to guess outcomes should improve. (2)

When considering the values of both ratios this seems to spell out success for the mindful and diligent investor. The issue is with maintaining a clear, and therefore unclouded, mind when looking for the next investment. To do so, I am of the understanding that self-awareness is a prime concept to expand on before undertaking any activity. Knowing oneself, as argued in this article and many more, is the cornerstone to writing a sane and insightful trading plan in turn accruing profits after balancing out the losses.

In other words, initially, I better know my levels of greed, fear, doubt and jealousy (3) before committing. In truth, and here I am writing from experience rather than basing my thoughts on published articles before I can know what these levels are, I have to trade. How else would I discover what frightens me, what angers me and what eventually gave me that euphoric rush after a spell of green-after-green results?

In any case, it’s not the win-rate that makes you a successful trader. It’s all about minimizing loss and maximizing profit. (3)

1 3 Kinds of Helpful Self-Dialogue for Forex Traders - BabyPips.com
2 3 tips for building a professional trading mindset 🎯 for AMEX:SPY by TradingView — TradingView
3 Good analysts are not always good traders [Principle vs Emotion] for BITMEX:XBTUSD by Tommy_Trader — TradingView

Delving more into the meta of trading, besides greed - as discussed in the previous post - there are other factors (1) that make or break our sessions.

The wish to become rich overnight forcing our weak psyche and, therefore, our integrity, to buckle under the pressure to squeeze that extra dollar for the day prompting us to pump more money - money that we absolutely cannot lose - to hopefully accrue that last minute of profit before the market closes.

Our innate fear of losing all that we have gained forcing us to doubt our strategy and invest improperly and the sloping need to be right daring us to make conscious, yet, erroneous decisions just to make us feel correct in our trade, increasing the possibility of blowing the account by postponing stop loss are all negative connotations that our mind has to overcome simply to earn our living on the ever-volatile markets.

All these dire marks of the fragile human brain can be mitigated by a solid base of personal discipline. For instance, learning how to accept the negative trades by exploring what technical analyses were missed or which neglected news reports could have hinted at our erroneous manoeuvres are such steps to a saner methodology of trading (2).

Checking and rechecking our prospective trades prior to that cementing click is another way to minimise selecting the opposite opening trade. This is also true for stop losses. Not taking our sweet time to take all or a portion of the profits is a very good strategy to maintain a healthy account (3).

By this is being meant that waiting in aeternum for the currency, commodity, stock, what have you, in hopes that it will peak to an unprecedented amount is not the best methodology.

Say, while awaiting such a stroke of luck, trends reverse and the peak rapidly declines to a trough, how do we react then? If necessary, because at the end of the day, such occurrences are not unlikely, then we may have to take a break from regular trading and adapt the trading plan to nullify such wishful mountain climbing.

The trading plan has to cater for most contingencies. The only way to prevent such trading earthquakes is to adapt and learn from others or adapt and learn from our own mistakes. This does not mean that the trading plan should be a hundred-page handbook!

(1) 4 Trading Psychology Pitfalls that Can Blow Your Forex Account - BabyPips.com
(2) How to Recover From A Blown Trading Account - BabyPips.com
(3) 5 Simple Habits to Limit Your Risk Exposure - BabyPips.com

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This is so true. I’ve had many trades in the past where double checking truly wasn’t even done because I was still reeling from the highs of a winning streak or just extra hopeful that I’ll win this time even though I didn’t have a plan for that particular trade. :woman_facepalming:

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Yes, it is a lesson worth learning. I would want to enter a trade in one state and instead execute the exact opposite in full confidence that I would be clicking the right choice. It is very frustrating. So then there are two options either to wait for the positive return or cut the loss while the amount is still considerably tiny.

You coined it perfectly, when still reeling from the highs of a winning streak. That is also another of my trading sins, having a heightened sense of security that any next move I do will definitely result in a profit (then slapped hard when green turns red!).

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Following on my series of meta posts, today I am enlightening myself and those reading them, with knowledge extracted from a particular thread (1) in this forum. Earlier, I only referenced articles but this time it seems appropriate to also commend nuggets of gold that more experienced individuals had on the subject at hand.

On my quest to teach myself trading using a sane mind frame, I am happy to have stumbled upon a mix of advice ranging from technical analysis to psychological tips. Focusing on the latter, I could not agree more with a particular statement that cements the fact that discourse in hindsight is always correct (2). When discussing a past event there is no other way but to state the obvious (for those knowledgeable enough) or explain what is happening (for those on their learning path). Hence, the forthcoming selection of comments is complimentary to a sane trading psychology discussed after the original poster had a particular position that turned sour.

Henceforth, many a time I tend to open a position on “hunch and impulse” (3). I might have gone through fundamental and technical analysis but being somewhat trigger happy I simply forego the accrued knowledge of the moment and open without consideration to the aftermath. At times it goes well, other times it does not. And I may have the most laborous and detailed trading plan for my sake but if I do not follow its established principles then I might as well throw it out of the window. The resultant options are either to sell immediately to ensure I do not bruise myself further or wait it out in hopes of a positive outcome. The lesson here is to stick to the plan (2).

Less meta but more grounded on the actions necessary when executing a trade, is to surmise the direction the currency is expected to take (otherwise why bother with opening a trade if one is sure it will go the opposite direction of profit), “how far” it is expected to follow the course to profit and for the unwanted occasion that it should fail expectation and float against the perceived current: “how far” it would do so; all this in an effort to evaluate whether a prospective opening of a trade should be done at all (4).

I will end this particular post by admitting to one of my initial failures. While I enjoy reading, I do watch a lot of YouTube videos. On this subject of trading I have watched questionable resources on the referenced video platform (5). At the time, I took everything to heart believing that the disseminated knowledge was truthful, trustworthy and correct but as I followed the listened advice and traded and incurred losses realised that like anything, YouTube has to be taken with a pinch of salt especially when, nowadays, anyone with a video camera can pose as an expert. Here, the lesson is twofold: first is to do personal research on received advice and second is to watch videos from reputable individuals and organisations - this also requires research.

So, to recapitulate, one must heed advice from reputable sources, do own research and stick to the plan.

(1) This is how I blew my account today

(2)

(3)

(4)

(5)

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Good on you for been honest about your misfortune,I believe it not easy to understand how someones emotions effect their trading habits , as I believe we all wired up differently. Maybe for some they have to experience “pain” or failure a few times before they have some sort of realisation .Like mentioned you can pre set stops and targets to cut out the anxiety ,it takes the stress away but also the fun too

I try to improve on the first account of failure but, truth be told, it does take me a second, a third and a fourth round of unpleasantness to realise and pinpoint the exact source and location of my mistake. When something is evident, such as the initial misleading YouTube videos, I quickly researched trustworthy resources but when mirroring for less evident errors, for example when to open or close a particularly volatile trade, I still have a tendency to fall short of my capabilities. It is part of the learning curve, after all.