Brandleesee - My Active Trading Journey

Trading Discussion Trade Journals
13

@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.

14

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

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15

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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16

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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17

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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18

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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19

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

20

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.

21

I don’t think it’s uncommon for traders to continually make mistakes ,I far from an expert, but people come on here expecting to ‘click into’ trading straight away and are disappointed if the don’t, it like learning a musical instrument, painting a "masterpiece’,been a very good sportsmen, it usually takes lots of practice and experience

22

In complete agreement.

During my studies and reading comments (mostly on Reddit or comments to articles) the general consensus is that trading is a get-rich-fast system followed by disappointment after having their first couple of trades go south.

Studying this subject requires a long time, just as you say. Drawing from my personal experience, I have been intrigued by this industry for the last seven years. Only lately have I started trading actively while along those years I only did so sporadically to test the waters. Mind you, I am still testing the waters only now more frequently.

23

Like you say you want to day trade ,more emphasis is the experience of actually watching the charts as oppose to.mechanical set up s

24

It also works the other way around. I get multiple losses then I completely lose confidence and just don’t place any new trades for WEEKS. In general, it’s so so terrible. Self-awareness is the first step but you really gotta do somethign about it. :joy:

25

Also have you considered renaming your thread? Maybe calling it a trading journal might help other newbies read through your helpful posts! :slight_smile:

26

I am trying to avoid this mind frame because I opted to earn a living out of this activity of trading. Needless to say that the road ahead is very challenging. Currently, I am at a perceived loss of funds for a self-inflicted erroneous manoeuvre which is demoralising because my misplaced confidence led me to a poor choice. I will let it play out and eventually write a post about this to show the readership and myself the outcome of poor choices.

For the time being, it should suffice to say that it is one thing to write three posts on the psychology of trading from the perspective of others and wholly another when experiencing red with diminshed capability to act as a consequence of the waiting game.

27

I really want to but am unable to - probably because of my user designation (member).

And thank you very much for labelling my posts as helpful - I am grateful for I am trying my best to write in a sincere fashion even using my mistakes as an example.

I can safely say that I will be writing certain imagery and comments with a certain sense of shame because I had the arrogance to think that I would not do certain mistakes which are currently compromising a considerable portion of the available funds - I can assure that this is a humbling experience.

Thank you once again! :blush:

28

Oh gosh you sound just like me! It sounds like you like to give yourself a very hard time too when you make mistakes. While I think it is good, it can also be bad just because of that negative self-talk we do. I’m working my way through this toxic trait of mine lol.

29

Ohhh! Maybe we can ask the mods here! @Pipstradamus or @Penelopip or @Jess !

I bet they can change it and you can just tell them what you want the title changed to!

30

I do!

This really gets me to learn from my mistakes. Then again, I recognise that this is toxic and that it needs to be curbed.

31

There is certainly no harm in trying, so please, @Pipstradamus, @Penelopip, & @Jess would you be so kind as to change the name of this thread to Brandleesee - My Active Trading Journey. If you feel that its placement should be somewhere else than the Introduce Yourself section, please do your magic!

Thank you all!

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32

May I thank @Jess for taking the time to do my proposed changes. I am grateful.

And also @ponponwei for the suggestion!
(forgot to include you in my initial posting of this message!)

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