What are your targets?
Why aren’t you deeply concerned? 1 month of effort and swimming upstream. I’d be concerned, but trading is presently my sole income.
How much more money do you have to fund an account if you blow this one?
Sorry if you’ve answered or don’t wish to answer these. You don’t have to.
Some really good posts over the last day or so.
Thrax, I’ve been following your posts recently on ICT’s thread and enjoy reading them. I was unemployed most of 2011, and discovered trading in July of that year. I’d placed $5,100 into a trading account and have been using it to learn to trade. I’ve built it up over 6K a couple of times, but then placed a few really large really silly trades that lost all my winnings a couple of times which is a disturbing pattern. I’d started this thread, and shortly after decided to turn the (down to $4,950 a month ago) into $10K within two years to prove that I can and that the methods I use work.
I am concerned that things are not going as well as I’d like them to be so far, but I’m not questioning my methods for determining a daily bias. A couple of the big losses in early January (which were gambling based not analytical) have affected my confidence a little, but my other big problem is time. I spend five hours a day commuting, have a wife and young child, and every three months my job gets really demanding for 3 1/2 weeks as we close the books. I know that there are retracements that occur during the LO, that my bias would allow me to catch, but I must go to sleep most nights by 11:00 pm EST, and cannot get up before 6:00 am. Usually my problem is how to enter the market and overcoming fear. You are right, that the bottom line is making money, and I am not making it seriously enough at this point. However, the reason that I am less concerned is that I see my trading woes as being fixable. I am open to and grateful for any and all suggestions, so if you have any thoughts, please feel free. I’m also happy to do anything I can to help others.
I really love trading, and at some point I plan to do it professionally. However, I will not invest a serious sum of money into this and make plans to quit my current day (and sometimes evening and weekend) job until I achieve a level of proficiency that gives me confidence that I can be consistent. That day won’t be tomorrow, but it will be sooner than ten years from tomorrow. I really do appreciate all the opinions I can get and mull over, so any thoughts are definitely welcome.
Ok. Good. I think you’re approaching the problem from the wrong angle. Let’s break down why…
I’ll start with my targets: 2% per week, 10% per month. There’s, more or less, 4 weeks in a month, so I won’t reach my monthly goal. This doesn’t make sense. But it does. Why… because the longer term objective is significantly less important than the short term objective.
So, some back of a cigarette box maths, means within the year I’ll double my account just looking for the short-term objectives. If I meet the longer term objective, great, I get a 20% bonus. There’s a pattern here that you should notice, it matches a lot of sales job renumeration packages. And with good reason. They get some money for just turning up to work, and if they do a good job they get their bonus.
Now this is important, this is without compounding. I am not compounding short-term. Partly because the size of the account I’m trading means these figures pay the bills, the other part being at the end of each month I’ll do a personal stock check and adjust my budgets (lots) accordingly. Finally, I’m under no pressure to compound unless I want to increase my net-worth. I don’t feel that pressure, but that’s a personal choice and your mileage may vary with this statement. I suggest the wise move is to target your living costs.
So what does 2% actually mean to your trading? How does it affect your mentality/demeanour/pressure you’re under? At the end of the day, it means 1 trade a week with a standard risk attachment. It means I’m usually done trading by close of Monday. It means I can take Monday off and start trading Tuesday, or Wednesday, or even Thursday if I’m waiting for patterns to develop I identify and am comfortable with.
So what about that 10%, how does that fit in? Ok, so here’s the beautiful part. If I have a really good day, or week, it means I don’t need to trade for the rest of the month. I can just look, or do fun super tiny risk trades (I mean 0.25% or less) to try and bolster the profits without jeopardising the fact I’ve hit my goal. Ok, the account might sink a little bit as I make a mistake or two, but it’s not ball crushingly depressing, in fact, it’s usually enlightening and because they are such small risks, it means I bounce the account back pretty quickly. Usually within minutes, certainly within the trading session.
So, final point that I did not mention. By not getting ahead of myself and compounding every trade, it means when I make a loss, it’s in line with profits or losses I’ve made in the recent past, so the impact is less severe to the bottom line.
Really drink this post in and sit back and contemplate why it makes so much sense. I’ve tried explaining this to someone else and they just didn’t see it. They just said ‘That’s stupid, compound every trade. Drop risk if you lose and rebuild the equity that way. You know, like you said a few months ago’. That’s fine if you want to approach trading that way and feel the fraught of danger, but it’s not for me: I’m the tortoise, not the hare.
Of course, if I’ve missed something and there’s a fallicy to my approach, I welcome the critique. But I am firm that my approach relieves me of a lot of the pressures people put on themselves under when trading and allows me to enjoy it for what it is: Making money.
I should point out, if I miss a weekly target, it doesn’t even register as a problem because, at least at the moment, I’m far far ahead of my curve. I intend to keep it this way, even if I drop towards or under the curve. It’s not that important. Depressing, perhaps, but important, no.
This is a good thought and I will consider it. Although I live in NY, I feel more comfortable with LO then NYO (I know you mean Asia session, I’m just saying). For the next three weeks I’m going to try trading off of breaks of the daily open in line with my bias. I really hate the quarter-end closes at my company; lots of hours doing work in a very antiquated way. Can’t wait for the second week of April to be here…
I would say every trader goes through this stage. Don’t worry, it stops instantly, but only after you’ve taken the time to write up your strategy. At least, that’s my story.
I can’t recommend the time investment of writing up the nuts and bolts of the way you will attack the market strongly enough. It’s akin to the lightbulb moment that you often hear traders talk about. In fact, I think it is that moment.
Have you been tracking the results of these breaks? I know you said you got the idea from Nikita (and everything I’ve read of Nikita’s stuff seems to be very sound) but that is Nikita’s method, not yours. It sounds like you will be forward testing on your live account. If that is the case then you can mark this day as the beginning of the end of your professional trading aspirations as jumping from one system or method to another looking for profitability on a live account may lead to constantly jumping from one system or method to another always seeking a way to get ahead while your account gets smaller and smaller until you eventually succumb to risking more and more. Then one day we will find you wandering the streets, pushing your worldly belongings in a shopping cart, yelling at lamp posts and swigging MD 20/20 concealed in a brown paper bag. Another trader bites the dust.
So far it seems you are comfortable with identifying bias or longer term trends. If you are comfortable with that and think you are doing well identifying these larger moves, what more do you really need?
Go for the longer term moves with reduced position size and wider stops. Entries become much less important. You focus a lot on your entries (London Open v NY Open, for example). Longer term trading would render the exact timing of the trade insignificant.
You keep mentioning how you get the general direction of moves correct but those initial moves against you take you out. Longer term trading with wider stops (using smaller position size) will keep you in those moves.
Not enough action for you (my problem with longer swing trades)? Add a couple more pairs while further reducing you positions.
I am not trying to sound too critical, although I am probably coming across that way, I am trying to see if there is a way to incorporate YOUR trading style and the things you do well into an overall strategy that fits YOUR situation. From what I have seen you tend to be correct more often than not on longer term bias. Go with that while forward testing other’s methods on the side with a trade journal and/or demo.
I think you have what it takes to trade. No doubt in my mind. Once again, however, I just think you over-complicate things when you have something right in front of you and that something is all you need. You are a longer term bias or trend trader. Leave it at that. Make money trading currencies. Lots of it. Make us all jealous!
Hi Hogarste,
I’m following your thread since the starting but I didn’t post here a lot. Because this is your thread and you have a trading plan and a system, quite diiferent from mine.
Like other’s opinion you are over complicating things in your trading decision.
You said your methode is like nikita’s. I noticed some of your trades against her methode. You know very well that I also following her methode but I change the methode to suit my own trading personality. Many times I posted there that the system works very well but with a little knowledge of market structure. Blind buying and selling based on that system not works for long term. Even Nikita’s trading style changed a lot that is what I saw from her last posts. She also told there how she improved day by day after starting that thread. It’s a process of learning. No one can’t blindly trade based on the rule.
If you are following that system then follow it completely and forward test it in a demo for some months. I did it several months and found how the system works. As I mentioned there whenever I lost a trade I went to daily chart and analyse it why the trade was a loser. Later I got how the system works and when it works.
I know you are interested in Order Flow trading. I’m telling you hogarste after some months of forward testing you will get the idea about Order Flow trading if you know about the basic of Order flow. I’m telling this because my experience. I’m still learning the concept from various threads to know how actually the OFT traders trading. But the concept is very easy to absorb for me because of the similarities between the two concepts/methode.
You need to keep it simple stupid and some more hardwork 
Happy Trading.
Busy weekend with family stuff. We took my daughter to a maple syrup festival (tastings, various vendors, animal shows, etc) that was a lot of fun, and also celebrated St Patricks Day, as my wife is half Irish. Although the next few weeks will be hectic at work, I am planning to keep the analysis going and post as usual.
Really great comments, and I appreciate that folks take the time. I’m very open to ideas, and nothing is ever seen as too critical. I am going to write my analytical processes down as suggested, and have been considering longer term trades a lot lately. I like the idea that my entry into the market is not potentially contingent upon one fifteen minute retracement. I really am mulling over all the posts from the last few days.
I totally do over think things, and I must learn to recognize it and stop doing it in my trading. About ten years ago, a friend and I went to northern New York near the Canadian border to fish for Northern Pike in the St Lawrence river. Our first evening there, we were organizing lures on this huge table, and we had nearly a hundred different lures on the table. After a point as we were planning our approach for the next day, it seemed like we became paralyzed by the analysis, and were just moving lures around the table. We wound up catching one Pike on the last day of fishing using a large white grub (on of the most basic lures that catches many types of fish.)
All thoughts / ideas are welcome regardless of style. It can be amazing how brainstorming can get one thinking about something that results in a great idea.
Make this a private thing. Sure, post parts of it if you want to, but it’s predominantly ‘your’ thing. Really put effort into it, try and look at all the angles as much as you can. Even things like how you’d reward and pay yourself if it was your career.
I could strip mine out and give you a template I guess. But it’s probably better you go to town on it yourself first, as that will benefit me to know what topics you decided to cover if you decide it’s a mutually beneficial exercise.
Snow day today. I really like reading about the various methods of trading. When I began my trading journey, I used to sit in on classes my broker provided regarding Gartley patterns. When I came across the fellow who’s style I based most of my learning on the last year and a half or so, I decided to reject the idea of harmonic patterns, as I thought the idea of looking for butterflies or bat patterns in place of market structure seemed to not make sense. Lately I’ve been checking out a couple of the Pessavento Harmonic books, and I find myself coming full circle. If one is going to use Fibonacci (I think it’s vital, at least for me) using extensions as well as retracements is incredibly helpful.
Last night I had a bearish Fiber bias for today, but had only studied a minimal amount, as I’d worked late, got home tired, etc. I set up an order to go short at the break of the opening price of today’s (last night from an EST perspective) candle around 1.2940. I got up this morning and kept an eye on the position (2.5 mini-lots.) There were several reasons for Fib fans to expect the Fiber to get below 1.29, but the fact that today seemed like a slow day going in to the London Close, had me decide to trail my stop-loss. After getting stopped out around 1.2934 for an embarrassingly small profit, price took it’s dive below 1.2850. If you start with the high prior to the Sunday gap as point X, although the Gartley is not perfect, we see some impressive percentages achieved. From a-b (1.2880-1.2975) on a 15 minute chart, we see today reaching just beyond the 1.27% retracement, and this happens all the time.
Today was an important day for Fib fans looking at Fiber hitting a 78% of the November 12 low versus Jan 31 high. If we raise the starting point of the Fib to January of this year (check the daily chart, I’m using my laptop and am having trouble posting charts) we see that a 127% retracement can be reached right around the figure of 1.28. I’m not certain that this will happen this week, but I do think that 1.28 is a likely target before we start heading back up… Actually lower is not out of the question technically speaking.
So far this week I was stopped out with a $10 profit and had an order not activate when I was wrong about bias on another day. For tomorrow I am bullish, but am not sure how much liquidity to expect. Going to be about 2-3 very busy weeks at work, but I will try to get back to posting some charts and discussing USDX, as well as looking at other pairs. Going to be a crazy couple of weeks at work.
So last night I set up an order to go long at 1.2935, SL 1.2895, TP 1.2980. Not great R:R, but a reasonable trade. Looking good this morning but it starts retracing around 8am as I’m on my way to work. I decide to move my stop to 1.2940 as price was meandering. I’m taken out of the trade around 9:30am with a $20 profit netting $30 for the week. Then price shoots up to my original TP… FRUSTRATING!!!
Looking at Cable weekly, we see that the recent bounce is off of the 1.27 extension, with Commercial net longs reaching an extreme in the futures market. However it also seems that there is a reduction in OI for both longs and shorts. I know most folks have made money off Cable lately, and I’m late for the party, but I might try to go long here on a swing trade with reduced lot size if I find a clever entry.
On my IPhone on a train going in to work this lovely Saturday, but I wanted to mention why my bias was long on the Fiber yesterday. First, I thought that it was likely that there would be some expansion of the weekly range. On a 15m chart I noticed the formation of ab=cd pattern, and based on the ab leg, I tried to forecast cd, which I think was at 1.3000. For confirmation I noticed that Thursday’s candle was an inside candle off of the bullish candle from Wednesday. After all of that I mis-managed the trade by moving my stop to +5 pips, and was taken out just before the meat of the move.
I am using any spare time to document my processes and have made a list of my bias tools, which ultimately will wind up in a trading plan. Lousy hours for another 2-2.5 weeks, but I am very excited to progress my trading. Good trading everyone.
2Y2X
Went short on the Cable today based on ABCD move I thought I saw. I expected low of 1.51 to be reached. Price is meandering today, so I took a small (really small - little better the be) win. Blance at $5,107.59.
I was pretty tired last night and wound up watching some old episodes of ‘Walking Dead’ which is an awesome show, and then rented ‘Lincoln’ on pay-per-view. I still had a short bias for Cable today, as I expected 1.51 to get taken out, but to be honest, I was so tired that I did not do a real analysis to confirm an entry. Too lazy to open my laptop and look for a divergence, etc. I decided to enter a short at 1.5139 and take profit at 1.5199 with a SL at 1.5179. I entered the order and watched Lincoln… Just before I went to bed around 12:30am, I decided to cancel the order via my iPhone because I had not done a proper analysis. I was really tired… Naturally, I wake up this morning and see the money I did not make. I’m sharing this story, as I am floundering a bit. The psychology of trading is hard; beatable (I hope to prove) but hard…
2Y2X
Its boring, lonely, repetative work; but oh so rewarding when you stick at it 
A segment from a well known Bruce Lee quote: “There are plateaus, but you must not stay there, you must go beyond them. If it kills you, it kills you. A man must constantly exceed his level.”
Hey Hogarste,
Oh boy… just reading your post makes me TIRED…
It seems a lot of things going on with you right now combinations of work, family responsibilities, trading, etc. It is hard sometimes to priorities everything and do what is really important right now and trying to focused on those….and because of it, your energy level can be thrown out the window… At this time, I think trading is not your sole priority in which I completely understand. Trading can wait since this is not your sole primary income anyway. You can always get back in trading again with your schedule permit and if you can commit to it 100%.
With that being said, have you thought about taking a break for now maybe in a few months or so? This way, you have time to reflect of what you got going on and maybe you can decide later on if trading is really for you (I hope so) or not and maybe you just need to reevaluate everything and start from beginning… I don’t know… It is just heartbreaking for me when I read your recent post and yes, psychology in trading is hard specially if you combine it with everything in your personal life…
Speaking of commitment, you are too lazy to open up your laptop and look for a divergence, etc. BUT you manage to watch “Walking Dead” shows? Oh common give me a break…lol. Hey, I can make a good excuse too by watching my “Dancing With the Star” shows or read my favorite books for all I care…ha!..
PipNRoll, your sentiments and mine are aligned. Reading the last few posts of our friend’s jouney has been… well, TIRING!
Brian, take the weekend off. Heck, take the whole week off. Spend time with family. Years from now I guarantee you will not regret it. The markets will be there waiting for you to get back. When you do get back try to look at things a bit differently (I’ve noticed you are already glancing across the fence where the grass looks a bit greener with the talk of gartley patterns and bats and butterflies and such. Just remember, when the grass looks greener “over there” it is usually because it is over a septic tank).
The price can go up or it can go down. That’s about it. Just try to be on the right side a little more often than not. Document your processes? A list of your bias tools? Okay, if that is what you like doing…
Print out a chart. Show the chart to a small child. Ask the child if the squiggly lines are going up or down. When the child tells you, you have your bias. It is as simple as that. All you are doing after that, using a turn of phrase not really connected to how you are accustomed to hearing it is: find an optimal entry. Set your stops large enough and your lot size small enough and just listening to the small child is now enough.
Maybe it has just been a turn of luck but my trading has has never gone better as of late and all I am doing is looking at the squiggly lines. Are they going up or down? Up? Okay, long it is then. Down? Then it is time to short. Set reasonable stops and make sure the potential profits are 3X the risk or more. Rinse and repeat.
Okay, it is slightly more complicated but I swear not by much (I’ll admit, I have become infatuated with objective MTF trendlines). Maybe trading isn’t so hard after all… Then again, it might be and I am going to crash and burn my account but trading has certainly become much more relaxing as of late.
All the best,
JL