How to find mistake (what did I do wrong)?

Hi Everyone,

I have been trading on my chosen broker for around 3 weeks. Actually my primary purpose and wish were stocks trading but investment for broker who, along other financial instruments (also stocks), offer currency pairs (forex), is much lower. So I decided to try to earn some money and sign up with this broker.

In our country is job as primary source of income close to impossible to be found so obviously I have no income, even if my education level is very high. Basically I invested all I had (around 300 EUR) into this broker where I am currently trading mainly currency pairs. The severity of problem is even higher since I have no income at all.

I decided to trade, which is definitely risky business, because I had been learning trading STOCKS before i joined particular broker (trading mainly but not only currency pairs), for around one year. I was writing down a lot of high quality strategies, a lot of notes. For my opinion one of the most important things in trading is setting up correctly resistance and support lines because TIMING when to open position is definitely extremely important if not even the most important. If I accurately score from 0 to 10 my own knowledge where to put best possible support and resistance lines, I would say 7 which is for my opinion very high score.

However after gathering a lot of sources of knowledge, noting down to ms office word .doc files in my own language, important notes, I am starting to be very much worried. So far I did 6 trades and I lost 5 of them. Currently at the time of typing this message, I have three opened position, all of them in huge, very huge, current lose. What worries me the most that maximum current lose can only equal (in negative of course) balance on account (in positive of course). When this moment happens, we all know what follows…

I don’t have money to pay to expert to give him details of my trade*** to take a look where, at which point, I was wrong. With or without using indicators. With or without respecting upper shadow, lower shadow. Mostly I don’t work with shadows but according to my analysis this is not the main problem. Furthermore I am using MetaTrader so I cannot check (zooming out, zooming in, moving graph to the left without a limit to where to move it to, moving graph to the right without a limit to where) just about anything on chart. I need to modify timing periods on charts and therefore key relationship, between entry point and between the exact location which was most important where to put support/resistance line, is impossible to be seen at the same time.

*** details of my trade: trading symbol, exact time/date of opening pending position, approximate time of position being converted from pending to open (expert could find that easily since its mostly about breaking resistance/support), info if entering long or short, exact price value of entry. I assume this would be enough to do some analysis and find a mistake

If anyone from you would offer me, although this is not my question, one revision, I would gladly be willing to give details of my trade*** although I need to be realistic also what kind of replies could I expect. I believe such revision could take even half hour to try to suggest me what could I do to make my trade better already at the beginning (entry point) or even before the beginning. Although i trust myself that support/resistance lines were very good, volume also OK.

[B][U]Finally my question:[/U][/B] A tool which would show the failure done surely doesn’t exist. I know whenever i or anyone else (so this is not even my potential failure) enter the trade, either short or long, it goes to loss and not profit due to spread. I am not sure if this is always the fact but very often it surely is. [U]Is there any available method how to check where was the failure or what could be improved[/U]? This is my main question. Or if I ask it differently: when you lose a trade and you want to see what you did wrong, what do you actually do?

So far I have only three findings how to check where was a failure, those are:

  1. Force myself to consider upper shadows if entering long positions and lower shadows if entering short positions instead of using just the body of the candles.

  2. Ignore large (e.g. 600% and above size of closest average candles’ sizes) candles so don’t do resistance/support lines based on them.

  3. Don’t set up resistance/support for one point above**** highest high or below**** lowest low but for, at least, five points above/below.

**** one point above: increasing the lowest decimal digit for +1. So if value is 1.09876 then one point (one lowest decimal) would be 1.09877. If 127.323 then 127.324 and so on.

According to my very limited possibility of chart scrolling/zooming/moving on left/moving on right, those are so far only findings I have but unfortunately neither of them worked. After my analysis, I ended up with information that even if considering all those three findings, I would still lose the trade.

Currently on my current trades I am in loss for around 45% of my current balance. If I put the chart on, e.g. 4Hours then I see wonderful (yes, really wonderful) black background place where, in wanted direction trend will surely go, please kindly check this to make sure what i am talking about:

https://s24.postimg.org/pniy0bith/trend.jpg

but the truth is somehow different. Endless waiting isn’t possible. In few weeks or months, trend might be there but I am extremely worried that current loss (negative) on open trades will match available balance (positive).

I would pay potential offer for skype conversation as soon as I am able to, although even such ‘‘private’’ conversation is not even purpose of this message.

For me, this message is very much emotional, specially after so many hours spent on learning to trade to try to be ‘‘at the top’’ when i start with real money instead of ‘‘gambling with the money’’ and hoping that it turns as I want. And now this is happening…

[B]So to repeat my question[/B]: When i close position with a loss or when i see loss while being in opened position, what would be the best way to try to [B]find the failure[/B] - to see what did I do wrong? So I could at least learn something from failure, if any. Obviously noone on the planet can 100% predict where price will be in the future. However, I am sure I must be doing something terribly wrong.

Even if my university education was from completely different environment, from the moment I started to learn trading I knew that this is something I could be successful at and currently the only source of income which might be realistic for me. Looking at my balance and my loss… Cannot describe how I feel. Answer on my question would be highly appreciated!

First, you should not consider a losing trade a failure in and of itself. Sometimes you win. Sometimes you lose. You can do everything right and lose. You can do everything wrong and win. It’s a probability game.

Now, having said that, you must always look honestly at your trade. Did you follow your plan? If you did, then you didn’t fail. If you didn’t, then that is a failure.

Of course this all assumes that the trading system or method you use has a positive expectancy. If not, finding one that does must be your first priority.

Hey Puppy, Welcome to BabyPips, and to of course, Forex

First off, buddy, STOP TRADING ANYTHING* JPY

You have to use so much of your account to play around with it. Right now, you need to concentrate of smaller values, to get more for your money at this point.

*YiKKS :o

Looks like, to me, Price is at a area that might see a bounce higher, @142.87

The tuff part to sort out at this point is, the USD/JPY struggle. USD has been pushing hard. BUT, USDJPY seems to be at a big turning point area. So, in esense, youd think GBPUSD would Strenthen, ( GBP ) Because USD weakens.

Now go to GBP/JPY. WIth the thinking JPY would strenthen, USD weaken, Which is the more powerhouse of GBPJPY?

GBP at this point, you can see it broke a major area, and will raise for Liquidity 148.35, Or area of sellers and stops.

Personally, Id bail on this trade ASAP.

This is pure price action stretagdy, and Ive never traded this pair, or any pair, linked with JPY. Just to large of a battle field for my liking.

Now, on to the, " How to find the Fault",

Your a College note taker, so, Take 30 minutes of your day, and write in your new, shiny journal. Everyday, log where, why, when you take your trades. Then, note to how they went. Keep note of your P/L. Write what you can do better, what you did good, what you expect tomorrow of yourself.

Then, if your trade goes wrong, you can reflect back IN YOUR NOTEBOOK, and see what went wrong. Something physical to leaf thru on your free time, and show your development on your journey.

Review, Reflect, Resolve

Puppy, Im not sure what your tools are, as far as a PC at home, but It sounds like your using a phone? By your MT4 problems, scrolling and such.

What is your balance now?

What country are you in?

What is your leverage?

Im not a market wizard or even a great Forex trader YET, heck, not even on Forbes 100, YET, but If I can help anyway, Im here bud.

Things sound rough for you, although I cant relate, I have my own " Walls" if you will. The problem is, we’re trading like our life depends on it. But what Ive learned, is, Rushing only brings disaster.

You can rush, but whats necessary, is being able to do all the right things while rushing to get it done.

This includes writing in a journal, to find and fix errors on your side of the business. Following a routine, DAILY… Having a checklist like a pilot.

Dont quit, Dont get frustrated. You need to start all over… Just Better.

Hang in there,

Thank you very much to both of you for taking a time to reply.

rhodytrader: As far as I know the theory is saying that when trend crosses above good quality resistance line then uptrend WILL occur, excluding problem with spread which puts position into temporary lose. Also theory is saying that when trend crosses below good quality support line then downtrend WILL occur. I respect this. I take a lot of care choosing good lines but obviously this is not everything. I work on classical volume below the chart as well as few indicators too. It might be the problem that I aim at longterm trades (e.g. 3 days and above) more than shorterm. I would say indicators are more needed for shortterm. But this doesn’t change the situation, neither provides the answer i am looking for. If I followed my plan? No, not entirely because in order to follow it I, you, or anyone else must in profit unless you are following it only (well, i believe we all do) to go from loss (negative current result of a trade) to profit (positive). However when I see loss, i stay in position because i require myself to close position with profit and since the trend crossed aboved resistance/below support, there HAS to be wanted trend.

MoneyNVRSleeps: I am using MT4 on computer. When i zoom in, the important horizontal and vertical self drawn lines are not visible any more. If i change chart timing, some important element/line is visible but then once again another isn’t and once again i cannot see what i want to see, e.g. reconsider entry point and try to learn something from this. You are asking me from where am i? I am from Slovenia. Leverage 1:200. Balance is around 260 eur on entire trading account. One out of three opened positions have loss for over 50% only by itself!!! In few minutes, maybe one or two hours, the positions might be autoclosed and entire balance burnt. I don’t know what will i do because i don’t have any other money to put on my account so i am asking on this forum for suggestion to find (method of finding!) a failure so i wouldn’t repeat it again.

For my losing trade CHFJPY, are all details in attached image. If anyone finds any mistake, it would be great. Even with indicator(s). Personally i was trying to do some failure analysis, searching for cause of failure, with indicators, particularly but not only Moving Average. According to it, there WAS my failure: i should have deleted pending order on fourth chart before moment of opening because its closure (why closure? obviously because its red candle) was already crossing lower MA indicating trend will go up. But it didn’t go and according to my strategies (i just took a look at my created notes - i am talking for lower MA, same logic for higher MA):

“If candle closes (red) or opens (green) below lower MA and if trend is already in progress for some time (NOT making a turn around just now) then this is indicating change of trend - in this case to uptrend. In similar situation (candle closes below lower ma) but if trend has just changed its direction then it is indicating starting of this trend which has basically just started - downtrend.”

same story with Bollinger bands and Kernel channel. So what i said is different than what chart is showing. Obviously always need to be more indicators used.

Anyway, telling me potential error on image would be appreciated.

EDIT: if too small image, full downloadable: Free large file hosting. Send big files the easy way!


First response, just because a resistant or support line is broken it does not guarantee that a new trend will occur. It might put the the odds in favor of a trend, but nothing is 100%.

It might be the problem that I aim at longterm trades (e.g. 3 days and above) more than shorterm.

Three day trades are generally not considered long-term. Most traders would call that a swing trade time frame.

I would say indicators are more needed for shortterm. But this doesn’t change the situation, neither provides the answer i am looking for. If I followed my plan? No, not entirely because in order to follow it I, you, or anyone else must in profit unless you are following it only (well, i believe we all do) to go from loss (negative current result of a trade) to profit (positive).

Your trading plan is your set of rules for when you get into a trade, when you get out of a trade, how you manage it in between, and how you determine the size of your position. Your trading plan does not say you will win any given trade, how many trades you will win, or what percentage of trades you’ll win.

However when I see loss, i stay in position because i require myself to close position with profit and since the trend crossed aboved resistance/below support, there HAS to be wanted trend.

If your idea of a plan is the only close trades in a profit, you are at risk of getting really hurt in the market. No system wins 100%, and as I noted above, a line break is no guarantee of a trend move.

I believe indicators should be used WHILE I am still in position and rarely before entering, unless using indicator for ‘‘last second’’ decision before cancelling (!) pending position.

You said ‘‘new trend’’. You probably meant ‘‘continuation of trend’’ and not new trend. So this means if r. or s. line is broken then [U]opposite[/U] trend might still occur. But what should I do BEFORE i decide to NOT cancel the pending position in last few seconds before getting position opened? What should I do?

Another idea that I have (chart: daily) is to move the entry point a little bit more lower (if entering short position) or a little bit higher (if entering long position). Then there will be some difference between previous entry point and new entry point. I put some kind of own requirement (the psychological one in my mind) that in this area i previously named as ‘‘difference’’ must be additional candle in wanted direction and color (daily). If mentioned ‘‘additional candle’’ occurs after the OLD entry point then this could be confirmation that OLD previous point was OK but obviously the position would be opened based on NEW entry point. [B]Would be this confirmation good?[/B]

But how could I announce in advance the height of ‘‘additional candle’’? Impossible to announce this in advance. Completely impossible. What about approximate value? The height is required because i need to estimate to which Close Price do I put new entry point. Any chance how could I define where to put new entry point = to where should I extend the old (primary one) entry point?

Or is there anything else I could do, after already putting on chart s. or r. line? I know i could do some historical analysis to see where price went from this particular point but this seems nonsense to me - we are talking about the decision when to CANCEL pending order and when to be as sure as possible that after pending order will be opened, the trend will go to wanted direction. So I am asking for work remaining to be done after r. or s. line is on chart.

Step 1. Open a demo account with a broker and try placing various trades and looking at the costs involved.
It’s important to be fully comfortable with your trading platform, understanding the costs of a trade.
Seeing what happens under certain circumstances.

Step 2. Finish the babypips school if you haven’t already.
Step 3. Read books on trading, there’s always more to read.
Step 4. Resume trading and continue learning.

PS. Making smaller posts are more likely to get you help
For instance, state your reason for making the trade, the price you got in at, the price you got out at.
Note down what you experienced whilst the trade progressed and ask others for advice on what they think about the whole trade and your notes.
It’s very public but it will give you higher quality responses.

Keep on posting :slight_smile:

I think this principle probably isn’t a bad one at all.

When I traded with indicators (long time ago, now!) I certainly found them more helpful for exits than for entries.

It depends exactly what you mean by “good”. My feeling is that it will increase your win-rate a little but also reduce your average profit-per-trade a little. Whether that works out well or badly, by comparison, overall, is something (like most of the decisions one makes regarding one’s trade-management and even entries) you’d just have to measure carefully and methodically over a statistically significant number of trades. Anything else would be only a [I]guess[/I].

My suggestion for this would be to relate it to the [I]current volatility[/I] (which you could do as a factor/multiple of the ATR).

I don’t know … not without looking in detail at everything you’re doing. Difficult one to answer, that! :8:

Mistakes are very common here! In addition, generally all of new Forex traders start their trading career with same mistakes, like greed, emotion, over-trading, over-lot and unrealistic profit etc! You have to analyze on your trading performance if you want to identify which mistakes you made in your trading! For new Forex traders, it’s not easy job but gradually everything will be clear, don’t worry ……. keep analyzing!