Ah Mike, do I have stories to tell. Valuable lessons that are good for all to hear and learn from. Things I should know better and thought I would be immune to now. To cut a long story short,
the markets made an
out of me.
So after riding the wave of success during the development stage and a more than satisfying week on the first week of live trading my ego got in the way. I've been reading the EU well on the ticks, my bot on the 4hr is just ticking over doing its thing and after a long long struggle things look good. Started to strut my stuff like a Rhode Island Red. I flaunted my recent success in the markets face for I knew better. I'll break a rule here, bend it there. Well, as you saw, history tells the end story.
I mismanaged my trade sizes, revenged traded, I had basically thrown my trading plan out the window. And I should of paid a larger price. So very humble in defeat, and hopefully the lessons I learnt this week will last a lifetime.
Fridays NFP was a classic example. I posted my analysis on another thread and will stand by that work. It met my criteria to trade so I took them. Now trading news is risky at the best of times. But its about managing that risk. Now when the markets react and whip like that your stops are gonna get taken out regardless of how far they are. So why have large ones, that singularly reduces your R:R ratio. The other thing is that the markets either do or don't move in your favor. No need to analysis why, it simply does. Move in your favor and you make pips, a lot of pips. Move against you and again it doesn't matter where your stops are they will be taken out. So utilizing this very fact alone having a 20 pip stop means you can expect 5+ times return so maintaining any form of a winning % does yield positive returns. The secret is make the decision, place the trade, accept the result. Move on.
I didn't accept the result and didn't move on. I got angry at the market, kicked the cat, yelled at the cook and immediately placed a revenge trade, or two or three or shizt I forget. Man it was horrible lol. Might as well of been given my money to our m8 Hoggy.
But I have survived and will start afresh this week. Gonna let the bot do it's thing, manage the trades around it and stick to my trading plan for ticks. But I have also gone to a developer to get a couple of custom indicators made. The lessons from trade and money management involved in DC trading I believe can be applied down on the tick charts. The only adjustment is trends will only last hours, not days or weeks or months as on the higher time frame.
There is simply no way of detecting when these micro-trends will start or finish. No indicator, no pattern or formation, no high or low. But trading on the ticks we have another friend, spread. To most spread is a cost to trading. But the process of how the spread is made in the first place provides information about liquidity. And information about liquidity can provide information of market direction in the very short term.
So my work continues, this week I'll be a smarter trader. And I'll work harder in the background on developing my new system.
So here is the devastation caused by ego
and breaking ones plan
And here's where it should be sitting if
Bob the dumb ass
Good trading all. Above all else, trade your plan. Don't let ego and moments of madness ruin your account.