Been around for like half a year reading and soaking up all the good mojo. After demo trading for a few months, I went live with $300. My strategy is to keep up with the latest news, forecasts, and whatnot with FreshPips.com, then to watch the charts (1H and up) for price to engage major support / resistance areas and trade the bounce / breakout with directional bias from these informational sources. Also, I had some success trading retracements. I keep up with EUR/USD mostly, although I’m starting to look at USD/JPY now.
So basically my first 2 weeks were full of fail trades. I started up about 100 pips on some good trades, but then I increased my position size… After 4 losers I tried just scalping retracements for 5-10 pips; more losses. Now I am back at my regular position size (1,000 units or ~$.10/pip) and I am having a hard time staying out of this range-bound market; if only I could have 20 measly pips, I would feel better and step back and wait for better setups. I know it’s just a matter of time before I start sizing up my next loser. It seems that everyone is foreshadowing the inevitable continuing fall of EUR/USD, but I am still getting shut out on various upward moves. Even my long positions get nowhere!
Still, I feel like every $5 loss is another lesson learned. I know that by the end of the year (if my account lasts that long) that I will be a much better trader. Maybe. Suggestions for keeping sanity?
I pretty much covered my trading plan; it’s nothing very rigid or specific, I wait for important areas of support or resistance, try to get an idea of where it will go (fundamentally & technically), and then look for an entry in that direction. I use 30min chart for entry with an average SL of 30 pips, I try to wait for a small pullback and confirmation before pulling the trigger. Often times though, I will get stopped out or scared out of my position before the main move occurs, then much cursing at myself ensues.
I suppose my new plan is to forget about the 10% drawdown on my account, reduce my position size, widen my stops to say 50 pips, and judge myself on amount of PIPS per month. I don’t have high expectations… Just want to find my groove.
The 10% drawdown on a single trade is a bit high. May I suggest 1%? After you find your groove, you can increase your position size. If you find yourself getting stopped out more times than not, turn your stop price into your entry price. May sound silly, but it works.
I have a few advices that helped me when i went live:
Forget about what other people say. Make your analysis and follow your plan. If you hear everytghing else say, you will get confused.
Follow your rules always. Print them and put in your desk. And constantly add new rules.
When you are losing money, dont do revenge trading. Instead, reduce the size of your position. When you are in winning strike then increase your size position.
Your stop loss is probably too low, go over your stopped out trades see how many would have turned out profitable with a higher stop loss vs how many would have made worse losses with the higher stop loss.
[B]Oriole[/B], the 10% is the amount i have lost from my initial starting capital, representing about 10 or so trades. Thank you for your reply though.
[B]gasanvill[/B], thanks for the tips. I decided to go live in order to “feel the burn,” as I felt that my success in demo was too good to be true; I am definitely feeling the effect of hard-earned money being sucked from my account balance. I imagine that if it were just realized profits that I was risking, I would be more confident in my trading.
I think what you have said right there about reducing you position sizes and widening your stops is probably one of the best things you can do. EUR/USD can make 30 pip spikes in the blink of an eye so wider stops would be a step in the right direction.
The idea that a stop loss is too narrow is a common mistake a lot of new traders make. Widening your stop loss, does not mean that it will give your trade enough time to turn around before you eventually hits your target. You will find instead that your losses will be greater.
A stop loss should be at the point you realize your trade is no longer in your favor. If you commonly are finding that price dips back before going back up, then use that to your advantage. Perhaps start entering in the trade on the dip and maximize your profitability as it heads back in your intended direction.
If you insist on raising your stop, then be sure to adjust your risk as well. Whether your stop is 20 pips or 200 pips away, the risk should be the same.
Know your money management well (as you’ve done); stick to an entry strategy to the detail to maintain a statistical edge, some have wide stops for trapping wide moves, but others are designed with minutte moving stops for small fat game; learn to trade trend of higher D1 and H4 time-frame first before lower than H1, because higher is slower while scalping is swifter than any noob, dont climb your tree from the tops; know when to trade, avoid sluggish sessions as they breed skewed signals, trade active Londons, especially for H1 and below strategies; strive to keep clean charts; keep googling fx info and stay in the forums – they have an uncanny way of making one see different strategies clearer, especially once you’ve started posting. I’ve never lost an account, but I’ve seen it to within 25% of initial deposit, and back; learn from your mistakes, because it’s almost certain you will make some. My two pips worth.
All very good advice, thank you. About the stop loss, I suppose now it’s just a matter of experience in determining exactly where the point of surrender should be. My latest short position, I set my stop at roughly 20pips above major resistance. I should have been stopped out, but got lucky by 1.8 pips… Now it is slightly in the black and a down trend has formed on my 30min chart. Had I waited for that lower low and lower high, I could have gotten a slightly better entry and without nearly getting stopped out! I entered where I did because I was afraid price wouldn’t get to the resistance line, and that perhaps I had drawn it wrong… price was actually consolidating or basing (don’t quite have a grasp of all the terminology yet) for the upward move to test. Stop losses pushed it up over, but it appears maybe some limit orders pushed it back down and saved me. Hopefully this is the lucky trade I needed to break this over-trading curse.
I´m short too, i entered short at 1.3795 with a SL of 30 pips. You should include pivot points in your analysys, they are very helpful, I woke up today at 2.am EST time, and the price hit 1.3816 which was R1, after breaking yesterday high and the weekly high. Then i switched to 5M timeframe to wait for lower highs and lower lows to have a better entry.
