I don’t keep a journal here, but on a spreadsheet. Today was a bit eventful for me, I thought you might like to hear about how it’s NOT done.
Today, in place of the cells that I would usually enter trade data into the spreadsheet, I just wrote the following paragraphs. I am still a learner, looking for an edge, using a demo account. I am sure there will be some criticism after you’ve read it, and I’m all ears if it’s constructive!
Here goes:
[I][B]MELTDOWN - Today I lost control of my emotions and discipline. Initially my trades were going as planned, using my Pivot Points range strategy. However after about an hour, they hit consolidation, after which they went against me and stopped me out. I will not be journalling these trades as I believe that the lesson to be learnt here is not to do with strategy, but psychology. Out of eight trades today, only two were in profit, and they were simply at breakeven to get out of a consolidating trade. What went wrong? I thing the economic data releases on the GBP GDP had most to do with the spikes in EUR and GBP pairs. I tried to trade these on a contrary basis, expecting the “Big Boys” to snap up the huge news candle back towards the previous price range. They didn’t. Price reacted to the news, stayed there, then continued further away from my target. Most other pairs I looked at seemed very stagnant. I can understand now why I read about traders who don’t trade on big news days. Perhaps they were all on the sidelines waiting for the news explosion to settle. I will certainly think twice next time. Another big no-no I did today was to carelessly experiment with other techniques with no regard for my capital. I tried scalping in revenge of the trades I’d lost, not caring about depleting my capital further. I hope I don’t behave like this with real money when I go live. Lessons to be learnt today are 1) Know when to get out of a trade if it is not going your way. Initial thoughts for this are to have a plan for when the market consolidates. 2) Develop a system for taking profits at certain stages of the trade. 3) CONTROL EMOTIONS — DON’T BE GREEDY— SET STOPS AND TARGETS SENSIBLE LEVELS. 4) Find out about alerts to warn me when trades need attention. That is all for now. I am annoyed with myself for letting my emotions get to me. Especially as yesterday I was feeling so good about feeling like I had found a system that works, and that I was finally getting the hang of trading. I think my system is probably a good one, but the economic data releases just steamrollered me today. I will continue to test and develop the current system, and try to learn from todays mistakes. See right for the damage I did to my account today >>>>>>[/B][/I]
I started the day with £849.80
Lost £118.80
Balance now: £731.08
Hi ILovePizzaMore, hmm, todays fundamental experiences haven’t really sold me on it!
I have to admit I have never been one to keep abreast of the news, I used to watch Sky news sometimes, but we cancelled Sky recently and I’ve never been a reader of papers.
The post above is a sorry tale, but I have had some degree of success with technicals so far, and I feel like things are clicking into place… sort of!
Out of interest, are you a fundamental trader?, did you enter any trades on todays news? Can you suggest a system for catching a news move?
[QUOTE=“Rez;482197”]Hi ILovePizzaMore, hmm, todays fundamental experiences haven’t really sold me on it!
I have to admit I have never been one to keep abreast of the news, I used to watch Sky news sometimes, but we cancelled Sky recently and I’ve never been a reader of papers.
The post above is a sorry tale, but I have had some degree of success with technicals so far, and I feel like things are clicking into place… sort of!
Out of interest, are you a fundamental trader?, did you enter any trades on todays news? Can you suggest a system for catching a news move?
Cheers,
Rez[/QUOTE]
Yes I am a fundamental trader… I will be entering a trade based of the UK GDP release today in a few hours… There really isn’t a “system” as it is much more discretionary then technical systems.
The more you trade, the more you’ll realize how much the news drives the market.
I think it’s great that you’re learning lessons from your mistakes. I’m not familiar with how you trade so I can’t comment on that, but I did find that I became less emotional when I walked away from a chart.
Sounds tough but see it as a slap on the wrist for letting your emotions take over. If you get stopped out on an unexpected spike (and not a few are unexpected) then stand aside until the market settles. This could take hours or days. Sometimes the market does make its way back, sometimes not. But you know that now.
There are a number of live news feeds available on the net. I have difficulty deciding what is relevant and working out how it might affect the market. Then again my trading is more akin to scalping.
I’m lucky to be living in France where I can get up early, catch up on the news feeds, then look at a number of reviews from the previous day. I also take notes from what I consider relevant before trading begins. And I also trade only when the London and/or US markets are open. Outside those hours I find much less predictability.
For some weeks now Ive been able to trade through the day. Curiously I get more losing trades in the London session up to the start of the US session when most of my trades make profit. I think I’m using the same technique but clearly I am not.
As soon as a trade is in profit, I look to the (say) 5 min chart and note the spike range for the previous couple of hours. Once the profit is higher than those spikes, I move the stop to breakeven. I follow up in that fashion until I hit my target (which I will also move up if I think things are going well)
It took a while for me to resist the temptation to move my stops down to avoid loss. I got away with it once or twice but the losses overall far exceed the gains. Once that stop is set then its written in stone and from that point there is only one direction and that is toward profit, not away. The stop is your acceptable loss for the trade. You don’t mind losing it…so I keep telling myself…its not as easy as it sounds.
I also limit myself to just a few of the majors. That way I get a ‘feel’ for the way things develop, which also changes over time.
I got to the point where around 70% of my trades were profitable but I was still making a loss. The losses on the 25% were exceeding the 75% gains. Clearly I needed to change the profit:loss ratio. The issue now became one of keeping the stop-loss outside the expected price-change range for the anticipated life of the trade. Currently, at worst I can break-even, at best I’m in profit. Way to go.
Rez,
I am a newbie like you I have tried all sorts of trading strategies. Scalping, Trend trading, News and fundamentals, Support and Resistance, blah blah blah. I have found that no matter how I skin the cat the results seem to be the same. I did learn the exact lesson you did about news you simply have to have a live feed to keep you out of trouble. I use the following on my MT4 (NewsBrk-v0 and NewsCal-v107) plus my broker also has a live feed I use as well just so I don,t get blindsided. You can Google those two indicators they are widely posted.
I trade the London and NY Sessions, I found waiting about an hour and a half into the London session helps to eliminate false LOB. I hang up my hat for the last 3 hours of the NY session usually does not do much for me I simply set my take profits and walk away.
>>>>>>[/B][/I]
I have found that no matter how I skin the cat the results seem to be the same. I did learn the exact lesson you did about news you simply have to have a live feed to keep you out of trouble. I use the following on my MT4 (NewsBrk-v0 and NewsCal-v107) plus my broker also has a live feed I use as well just so I don,t get blindsided. You can Google those two indicators they are widely posted.