Brandleesee - My Active Trading Journey

[brandleesee]

@SovoS may I thank you once again for your comprehensive explanations. Admittedly, I do not reply as fast as I wish - as I do in other threads - but I always make sure to have suitable time to dissect the message, learn and reply accordingly.

@SovoS

Trading can be considered a business like any other business and there are many similarities. And losses can be viewed as just a component of doing business. In this sense, losses should be renamed as part of the “overheads” of doing business.

I shall be honest with you. Your analogy never crossed my mind. And it is helping me change my perspective on trades that go south. Calling the act of trading a business, profits as profits and losses as overheads is a really good interpretation to appease the resultant frustration.

At this point I want to take a moment and add to the wisdom you have shared with regards to overheads. This article, proposes each loss as advice given by the closest friend we have. That is, the loss that we would be grieving on turns out to be advice masked as a negative trade. We have to consider each loss as a source of inspiration and as a nugget of knowledge. We have to learn from it. So, not only should I think of a resolved negative position as business overhead but also as an opportunity to examine where I went wrong with my initial trading decision and subsequent actions taken.

@SovoS

Our business product is simply “probability” This is what we buy and sell regardless of which instruments we trade. We know that we cannot always be right and that losses will occur even when we get the direction correct. We cannot make money unless we are active in the markets, but being active in the markets means we will incur costs/losses. In order to succeed all we need to achieve is a gross profit that exceeds our gross costs.

We need to do our homework. What instruments are currently worth buying/selling? what is a good price? At what price should I take profits on my positions? How many should I buy/sell? What needs to happen that determines that I made a wrong entry and I should “dump” my “stock”?

These two paragraphs are a shout out to correct due diligence. I see these questions as typical last minute risk assessment notions prior opening a position. Very recently I opened a new thread in the forum because my due diligence was flawed and needed reasons how it was flawed. Essentially I relied on news and an economic calendar to find prospective positions to trade. It turns out that just observing news and calendars and guessing where the market will go is poor fundamental analysis. So I have now learnt that to answer those questions I need to look at numbers and charts, technical analysis, and other sources of fundamental knowledge while still observing the news and the economic calendar.

Amateur Mistake - Need Advice To Understand My Mistake

I have misread the market. I traded EURGBP by opening a sell position because I suspected that the European Market would not be happy that its countries have actual adverse data when compared to previous statistics. For example, Spain had adverse GDP growth rates, Italy’s consumer confidence diminished and Germany’s business climate had a small vote of non-confidence. [fundamental-analysis-mistake-forum-promo] [chrome_IfXPD9sToa] (apologies for the colour but I use permanently redshift/f.l…

The below are notable points on this subject that I feel are worth a second and a third read through.

@SovoS

• It is a delusion if one aims for a 100% success rate…
• The only objective is to maximise the income and minimise the costs associated with earning that income - just like in any other type of business!
• …like in any other business, one needs to monitor and control the overheads, the costs of doing business, in order to be a profitable business.
• controlling these expenses/losses is an extremely important component in our total trading strategy.
• “Probabilities” means, by definition, more likelihood of success than failure, so we need to build a strategy that reflects that and maintains the costs of doing business lower than the income generated…

To sum up this post I wish to quote one of your own nuggets of wisdom from another thread and add some commentary of my own.

@SovoS

Personally, I only find value in a few MA’s on my chart, the rest is just based on “eyeballing” candles and levels and over various timeframes and a big dose of “commonsense” assessment of the general trading environment (e.g. national holidays, major data releases, central bank meetings etc). But trading is a very personal activity and each trader needs to experiment and find what works and what is superfluous. Every indicator/technique should have its own, clear purpose and the trader needs to understand how, why and when they work - and also when they don’t.

Before opening that particular thread (my amateur mistake), I was trading on lines similar to the mechanics of the general trading environment (holidays meetings, etc). The problem is that I did not apply the necessary common sense that those are not the only contributory factors that may sway the market, let alone any technical analysis. So know I have gone back to the basics and am consuming more attentively learning materials because it is now that I understand that numbers do matter.

I shall end this post the same way I started: thank you, @SovoS for taking the time to read through my comments and disseminate your logic and good wisdom with me… with us