Diary of a failed FX trader

So failed trader might be a bit extreme… but things aren’t going well! I’m here for advice, I only started trading FX last week.

The idea was to trade support and resistance lines (primarily), limit losses to 2% or less and to have risk reward ratios of at least 1:2.

In one week my account is down 7%. I made 5 or 6 trades this week, none of my losses exceeded 2%. I didn’t profit on any of them. I’m going to try to attach some setups and then how they went wrong!

I’d love some opinions and advice. Here goes…

Trade 1, looks like pretty good resistance. Sold it. Put my SL just above resistance.


This is where it ended up


Trade 2
Drew the fib retracements on the daily, they looked significant, place my stop all the way up near the 50


Took out my stop nice and quickly


Would LOVE some feedback. Obviously I’m doing something wrong…

So here’s one I bought. Looked like a good uptrend, bit of consolidation going on, bought on the downswing, my SL is in blue (might be purple I’m colourblind). I didn’t want to put my SL too low, where it was seemed to disprove my trading idea:


and sure enough it was hit.


reserved for more disappointment!

:34:

Do you have a system? Can you post here the mechanics of the system that you use?

Trade 1: It was strong R but it was in range trading. In range trading, price might go up to R and then down to S, I’ll be watching closely to see if it breaks R/S and only enter if the up/down was confirmed. In Trade 1, you assumed price 'd go down at the R but in forex trading only God knows their next move :slight_smile: In other words, we only guess and then wait for confirmation before enter a trade.
Trade 2: Again, price was consolidating/ confusing where should it go next at the R. Similar to Trade 1, I’ll wait for confirmation whether it goes up or down to enter a trade. However, in your charts you have 2 lines in the middle, I assume they were SMA/EMA. Then if you look at these lines you 'd see they were crossed and went up (I can’t see the colour properly). And at the point you said you entered your trade , the 2 line were still far apart. For me, it indicated the up trend was strong. Again, better to wait for confirmation and it was confirmed in the next chart that up trend was strong and price continued to go up.
Trade 3: similar to Trade 2 the 2 middle lines were confusing and not sure where to go.
I’m not very good in handle range trading so I wouldn’t trade if market is in that mode.
Hope it’d help.

I won’t comment on your technical analysis, but if you had utilized a risk management strategy that had you reduce after each successive loss, you would have lost significantly less than 7% this week.

u should pay attention to the charts more and not blindly guess if its an upper or a downer on S & R levels.

There is a pattern to how price moves.

Guessing is not trading.

Let me dissect trade 1

Trade 1, looks like pretty good resistance. Sold it. Put my SL just above resistance.

Actually it is NOT a good place to go short if you are going for a swing trade. The level has been used too many times, when you trade only S/R the best entry is the first test and sometimes the second test, I myself only trade the first. Why later tests are not good in your trade? Because demand is consuming supply every time it goes back to that level, so less sell orders are left each time, making that level prone to a breakout.

Now let’s analysed support, you can see support is getting stronger in each swing of the price, that means buyers are willing to buy at higher prices… they want to attack that resistance area… in other terms price is changing momentum, making a breakout more likely.

Don’t get discouraged and give yourself more time to learn. People who want to become doctors don’t get there over night. Like any profession it takes time dedication to learn your trade. Perhaps it’s not what you wanted to hear but just keep at it.

Hi bmcl2343,

A few points:

  1. First of all, [U][B]you did well by utilizing a 2% stop loss[/B][/U], which most new traders do not use.

  2. You probably have a plan, but perhaps still need to refine your plan with a [U][B]proven trading edge[/B][/U].

  3. Your “self-talk” is currently very negative at the moment. " Dairy of a [B][U]failed[/U][/B] trader " is not a good way to describe yourself. It should be something like “Dairy of a learning trader” or anything positive. Negative self talk is very destructive to your goal as a consistently profitable trader. Avoid negative self talk like a plague.

  4. Losing trades are not a reflection of you as a “Loser”. Vice versa, winning trades are not a reflection of you as a “Winner”. You are just not in the [U][B]moment of opportunity flow[/B][/U].

  5. It would be great that you immediately cut your size to 0.5% of your account, or maybe even less. Right now, it is damage control. As you have said, you are still new, so give yourself time to learn.

  6. [B][U]Forget about making money the first year of trading. Learn the right way to trade, find someone that has done it to teach you, learn about yourself, what is your personality, and find or create a system that really suits your personality.[/U][/B]

The quicker you find out your nuances and your beliefs on money, fear and greed, the faster you will attain consistency and the results you are looking for.

As for your trades, some traders have already pointed out some of it. I am primarily a scalper, so I am not knowledgeable enough to look at your trades and point out the mistakes.

Hope this will give you a little scoop on what it takes to make it in the Forex world. Enjoy and savor every part of your remarkable journey.

Exactly, people expect to spend 5 year and more to become a doctor and yet expect to profit from Forex in a few weeks and even less.

Thats going strait into my FX collection of NLP quotes… Outstanding! :smiley:

What happened to your thread on trendline break?

To quote ‘Shaggy’… “[B]it wasn’t me[/B]” Shaggy - It Wasn’t Me with Lyrics! - YouTube

Few things:

  • it doesn’t appear that you have an actual strategy, I think you are looking at the chart and drawing conclusions. Find a strategy and go back 1 to 3 years of historic data and see how it plays out. Tune your risk reward and stick to that strategy
  • pick a timeframe and stick with it. Daily and 4H are good solid starts. Then expand your armoury
  • Look at things from different angles: pivots, VSA, PA as well as S&R, fibs

On the postive you actually sound quite organised and determined. I like the fact that you limited your losses and journalled all your trades. Read through some of the “most viewed” threads on this forum and see if anything makes sense and fits your daily life and personality. It is hard work and does take time and patience, but can be very worthwhile.
Short term pain (3 - 5 years), for long term gain (the rest of your life). Good luck.