Have you not figured it out yet??? People only start following their risk management regimen when they start losing!!! LOL!!! You know: when they’re down 50% of their capital on a single trade. Goes like this: “Man I wish I’d placed a stop” or “Man I should have closed out at my 5%”. “But from now on that’s what I’m going to do”. Then the trade by sheer luck goes in their favor and they end up making a nice profit. And then: “Who needs risk management”!!! LOL!!! But the day will come!!!
I tried trading with a “mental stop” but I did not have the steel in my personality to actually pull the trigger on losing trades. Then of course I took a decent hit which made me realise that I wasn’t the mental stop type of trader. I have to have a stop even if it is a wide one and for some reason I can stick to my not moving the stop loss rule other than closer to the price to reduce risk.
Hats off to anyone that can actually control themselves well enough to pull the plug on trades that are losing an uncomfortable amount.
You’ve just not lost enough money yet!!! LOL!!! Trust me. The time it takes to learn to control yourself is in direct proportion to the number of losses and the amount of money you’ve lost over a period (in my case over a decade before I finally got it). But there’s one thing that comes into play here and that’s knowing your trading system. In my case: if my hard or fixed (mental) stop (calculated in monetary value and not in points or pips) is reached then I know for sure that my trading system is wrong on the trade and it’s time to take the loss like a man. In other words: I’m left with no doubt that the trade isn’t coming back to me and it’s only going to get worse. So that does make it easier.
Is that trigger figure a percentage or just an amount where you think, that is as much as I want to lose today or whatever period that suits your trading style?
It’s a percentage of capital (in my case 5% per trade). But the lot sizes are very carefully calculated. And they have to be because I don’t use stops. If you hold on just one moment I’ll post a link to the details. This being said though: this method is specifically designed and tailored to a particular trading system or methodology i.e. no idea as to how applicable it would be for a different trading system or methodology. This also being said: it at least ensures that stops (be they mental or otherwise) are FAR away from price and will never end up at obvious levels. So maybe. Only drawback is that your lot sizes usually have to be reduced to accommodate and most will not be able to stomach doing that as it slows down the profit making process. But that’s relative isn’t it i.e. get stopped out ten times and maybe make one nice profitable trade or don’t get stopped out at all and make ten slightly less profitable trades. You get the picture I’m sure.
Here you go. Take a look at “Risk Based Position Sizing” (first link in first post) and then see how it translates practically.
Default Bollinger bands settings. Angry at myself, could have gotten out of DAX with $800 when it dipped after the US NFP. Was greedy and only closed 2 units out of the 22 I was in. Added 4 units when it went up and was able to close that. Made $486 yesterday but stuck $700 in my remaining positions.
It’s been a week where I was too greedy I think. Made less than half this week of what I made last week. And I’ve only myself to blame. Ah well. Lots of thinking to be done this weekend. Cheers everyone.
Read your whole thread. It seems like you drink a lot. Do you think that affects your trading negatively or positively? Does your wife care or kids notice?
Through time, have you found you’ve changed any other aspects of your strategy as well as the risk per trade? e.g. Are you favouring higher timeframe charts than you did at the start of your journal? Are you focusing more on BB reversion strategies etc.?
You obviously consider fundamentals more than your average trader. Are there particular resources you use in your analysis or do you make up your own mind from the calendar in the week ahead? Many thanks & keep up the good work!
@Bleemus_1 My wife knows and understands I drink a lot. When I met her I TAUGHT her how to drink, and we’d drink together quite frequently. Not anymore the past few years since she got pregnant and is still breastfeeding until now. The son is asleep when I leave the house around 9-11 pm here. I wake up after lunch anyway since Europe open is 3pm for me. It’s helped I would say, since it calms me down after several hours of my trades going against me. I get to spend time with her between 6-9 pm when I generally don’t take new trades since myfxbook shows me I make very little money during those hours, the money is made 3-6pm and 9-12pm mostly.
@JohnnieMac for funda I follow a lot of people on twitter. Chigirl, Samir Madani, Tanker Trackers for oil, Livesquawk Forexlive Forexflows Ransquawk for live updates on events, a few others. Tom Dante just for the LOLs mostly but he shares a lot of wisdom if you don’t mind his language. Read Dailyfx analysis on their website. Watch Pivot Boss videos on YouTube every night re ES NQ CL Gold. Watch The Market Huddle by Patrick Ceresna and Kevin Muir every weekend for market analysis of major events that happened during the prior week. Watch a lot of Chat With Traders as well. Investing.com for data releases and aggregated market news.
Have not changed much in how I trade, except to remove % risk per trade limits. Learning to listen to my gut instincts, and unlike before when I’m done with a trade I don’t reenter, now I try to trade the thing again when I get a pullback. I’ve always looked at the daily, 4H, 1H, 15m and 5m charts when trading. Oh, but I’ve learned to trust my funda more.
I try not to trade anything else when I’m stuck, so I haven’t shorted Nasdaq. Also thinking about my past experiences, I tend to enter a day or two too early so I figured I’ll wait a day or two to short Nasdaq. Probably on Monday or Tuesday if I get out of DAX ok.
I think you’re giving out too much personal information about yourself. Take it down a notch. I don’t think @Bleemus_1 was asking a question and expecting you to reveal personal details but rather was actually just making a point.
Thanks for the insight Gilas. You are obviously on top of this approach with very frequent monitoring and updates I can’t hope to emulate your approach but I was wondering if you do any sort of weekly plan at the weekend when the markets are down even if you only follow it loosely through the week? Oh and keep up the drinking by the way - the liver is evil and should be punished whenever possible.
I used to go through a lot of charts over the weekend and go over the scheduled data releases for the coming week. Haven’t been doing that lately, maybe I should.
I’m still alive guys, have just been really sick the past several days. Doing somewhat better now but still not back at 100%. Just watching my DAX shorts.
Made $3,400+ two weeks ago on $6,000 capital. Decided to bump things up to $8,000 last week…only to hit a slump and make much less per week. Really have to figure out what’s wrong. Maybe it’s just bad luck, or maybe it’s something else. Still, happy to have made some profit.
All of this week’s profit was made on DAX. Left several positions in drawdown last Friday night and they went against me the whole week, had a lot of difficulty making any money. Still stuck in an oversized position short in DAX now at -$2,000+. Hope it gaps down on Monday. Several times this week I thought equities would go down but stalled. Kept me from trading other opportunities. Fingers crossed next week.
Have a great weekend guys!
Edit: My mistake. Seems like I made a bit of money yesterday shorting Nasdaq, forgot about that. But that’s it only two “trades” this week. Feels like a waste, although I know I should be grateful for the gains nonetheless.
