" What if a nice set up is building up in one of the minors? "
Sounds like you are facing some serious ‘fear of missing out’ there…
Something we have all come across as traders, and if you allow yourself to behave based on that feeling, it WILL directly impact your results, e.g. if you are facing ‘FOMO’ it is much easier to overtrade, to also go with mediocre opportunities etc…
I used to be like that as well: ‘Oh, I need to track every index, commodity, currency pair… in order to find the best opportunities’. It will give a lot of extra stress & burden trying to follow everything. Be confident that, just by following a couple of pairs, the market will offer you enough opportunity.
Patience is part of the game, and a skill every trader should develop in order to become successful.
Just because you are missing out on opportunities in some pairs, doesn’t imply you cannot be highly profitable on others.
For me, depending on if I will enter a trade will come down to 2 things:
high estimated likelihood to go in my favor
good edge based on reward-risk ratio, at least 2:1
Sometimes you’ll have obvious trades, which I still don’t take as it only offers limited headroom for the trade to mature until it reaches a major support/resistance line.
It really comes down to doing your homework and have a good estimate of your accuracy and edge.
If placing that many trades just adds to the amount of trades without hard results, your account will just be dragged down by commissions.
Is it risky to occasionally fish the charts for low risk set ups?
=> in trading, something you want to develop is habits to become consistent. Habits and words like ‘occasionally’ don’t fit in the same sentence. So is it risky per se? Not necessarily. Will it help you build consistent trading habits? Probably not.
Just my two cents … How long did you trade in your demo accounts? I would recommend trading in your demos until you find a system that will win at least 50% of the time with a better than 1:1 risk reward ratio. Ideally you can find a system that wins 60%+ of the time with a 2:1. Then manage the size of your trade so you don’t blow up your account if you lose those first couple of trades, then get to trading. We trade probabilities and you should be able to place a trade confidently without getting the jitters if it goes against you. Trade a system like 60% 2:1 and you will never have to worry. So, how long and how many trades did you do in your demo and what were your statistics? Don’t use real money until you find the correct winning system for you.
To be honest, I demo’d the first time for a month or two I think. Not long.
I made a little profit (but lost some). My friend who was trading stocks said I should start trading live because there’s volatility in the market. So, around March or April I jumped in with around $2,000 and lost $1,300.
Losing that money sucked, but I got to experience the feeling of live trading.
My personality is I have to learn some lessons the hard way. You could say “don’t do that” and my response is “why not? Maybe you’re wrong.”
I need to feel that sting in order to understand why I shouldn’t do something (within reason).
And most of my trades were on my phone, so I wasn’t recording them in my book.
Not thoroughly.
I would look around, and if I saw a nice set up, I jumped in.
Not a very good system.
But, now I have a much better sense of what trading really is and why risk management is so important.
I was there. But until you test your strategy and write down your strategy and stick to a winning strategy, you will always feel the sting. Every once in awhile you will get a big win and get hyped, then you will watch your account slowly dwindle away. I know that is the way I traded the first 4 years of my trading career. Now I make anywhere from 20-100 pips every day. Haven’t had a losing day in 3 months. I always tell my kids listen and learn or live and learn… One of them is far less painful, but they both will teach you. Good luck in trading my friend!
That’s pretty much what happened. A big win, then several medium-sized losses. A medium-sized win, then several small losses. Then, the shock, followed by a moment of clarity.
Yeah, you’re right, for sure. So, I’m taking my time now. I really want to place orders all over the place, but…now, I’m looking at wide spreads on those crosses, and now I’m just letting them go…not even looking.
I was just looking at CNH/JPY, and I see a nice little breakout, could score myself a 10% return, but I’m feeling like “uh oh. don’t get greedy.”
I already have two positions open. Maybe I should just sit on my hands and let those trades run their course, first.
However, I scanned the majors and took notes. I missed some nice swings, but I’m watching and taking notes. I have my two trades and I’m trying to control my desire to keep trading.
I kinda can’t tell the difference between temptation and opportunity, right now. So, if I’m feeling like that, I should not place any trades. Just observe or go study Pipsology.
I think the biggest mistake we make as beginners is not necessary opening a live account, but going too big too fast on that live account. We’ve all done it and we’ve all been burned for it. I would suggest sticking with very small positions, like 1% of your balance if your broker allows that. Do this for a loooooong time, you wont regret it.
You focus at this stage of the game shouldn’t be about making money, it should be about NOT losing money. Your goal right now should be to finish out your first full year or two just by breaking even. That’s the price of learning this business.
If I was coaching you, this would concern me. When you are a professional trader, you don’t have to “sit on your hands” You enter your positions with your targets. If you hit your target your take profit kicks in. If you you enter and the trade goes against you, you hit your stop and move on. The problem with new traders it they let fear and greed take control. They cut their winners short, because they are afraid it will turn against them and they let their losers run because they think, “It’s gotta come back and I don’t want to lose money again.” You HAVE to have a system that is profitable that you stick to. You should have it written down or at least able to tell someone exactly what it is. If you don’t your P/L chart will look like a stair step down and down and down, all the way to 0 … Trust me, I know, I’ve drained my account, TWICE. I have heard and bet there are countless others that are going through that or can tell you the same sad story about losing their account. If you aren’t going to take the time to do it right, when will you ever? Make it a great day!
That is one of the hardest things to do, is overcome that fear and trust your system. If you system is profitable, then you should trust it. One thing that I always recommend is after you enter your positions, if you have the ability to monitor it, then get your stops to Break Even as quickly as possible. That way, you have no risk on the trade and if it comes back on you, you can always enter again, usually at an even better price … Good luck on that trade!
Hey dushimes, One thing I had to learn to swallow, was “No loss is a bad loss if we learn from it”. Please get in the habit of reviewing each of your trades, successful or not, and log them in your trade journal. Keep track of each of them and keep percentages. Tweak them as needed to keep the win percentage rising. I’m so glad you are doing it an a demo account. Wait until you have a system that works consistently and is profitable. Then trade in a live account. On your EuroDollar trade. What was your entry signal? Where was your stoploss and take profit. What happened on that trade and why did you think you were going to make it to your target? Another thing that is hard to learn is that we can be 100% correct in our entry to a trade and still lose money. That’s why it’s important to trade a system that is a consistent winning system and to have the correct risk on each trade. If we know a system will definitely win 60% of the time and we hit a run of 4 straight losses, most traders will say, aww this doesn’t work and give up, when the next 6 entries will all be winners … Make sense?
One thought on this, normally I trade multi lots of 3. I have an early TP (take profit) where I get a small win and move my last two stops to BE + 1 (break even). Psychologically this allows me to get a win and then be playing with “house money” When I was learning, I even let myself take profit on my second entry whenever I felt like it and let the third one go until it hit my target or just came back down. Then I would analyze and rinse and repeat until I had a system that won 60%+ of the time. Psychology is one of the most powerful things in trading. You have to have a system and experience that helps you overcome your fear and greed…
@Skeeva
In the EUR/USD I made two orders (one long, one short with the same SL and TP):
size: 0.1 lot
SL: 40 pips
TP: 100 pips
TF: 1D
Risk/reward: 1:2.5
That question and others should be part of a trade plan checklist that you complete before you enter a trade. Did you enter both long and short at the same time? What is the signal you used to place the entry?