most of my positions experienced 50 - 100 pip drawdown
but are now starting to move back to the entry level
so horrific drawdown is now just terrifying drawdown. the
charts themselves look ok, they just look like the trades may
well take a couple of weeks to mature.
but this has been an incredible aha, eureka moment
You really don’t want to know just how much money you are losing
that is the worst possible psychology
prices on all currencies and stocks are fluctuating all
the time, if they weren’t you couldn’t possibly make any money
sometimes price fluctuates a lot and we may have to learn
to not pay too much attention. I’ve found that the trade
rarely goes into profit the more you check on prices
on the contrary, the more you fuel either greed or fear
the more likely you are to make foolish emotional mistakes,
speaking personally I should add.
I never remember being so terribly into drawdown and
at the same time being so optimistic about all my positions
It looks like it could be a long wait this week, and likely next.
Probably the hardest lesson to learn is to watch the price
make brilliant gains, only to reverse right back to your entry,
before making it’s second move to the even bigger profit.
This happens quite a lot
The other fear that needs to be mastered is when price
immediately reverses - what I do is put a Limit order
100 pips away, or at supdem zone, and just confidently
expect price to soon turn around again, or go right
to the Limit order or beyond. which should mean
You can be rewarded for your courage. How so?
When price falters and returns to entry, far from
being a losing trade, if you hang in long enough it
invariably gets a second wind and lunges even further
than you would have expected the first move to have made.
It really is about hanging in there, and not panicking.
This is a very new discipline for me, helped perhaps because
I have a lot of faith in the system, the rubber band principle
If all goes well I will deposit a lot more money into my account
early in the new year.
but riding the rapids? I have never seen trading success and
failure so clearly. You must be able to withstand the knocks
and patiently wait for things to eventually move in your favour
providing of course you have a basis for such confidence
Here is an example of what I mean
my last demo position, chfjpy is doing great and may just keep
moving down to TP, but life isn’t a bed of roses
and the screenshot below is quite likely to happen
If you can really steel yourself, and change your
beliefs, eg if price reverses against you its great
because you make far more money if Limit order is hit
and if trade ‘fails’. thats the best possible scenario
as the trade invariable will make a second lunge
and move far more than you were expecting.
It truly is about keeping your nerve, and finding your
’sweet spot’ the maximum position size that doesn’t stress you