Loss. AUDJPY. H4. Short.
Reason for trade entry: The market is in an uptrend and the pattern is at a swing high, so if I take the trade it will be a counter trend move. The pattern is a bearish engulfing pattern that is confluent with resistance. I am positive about taking the counter trend move because it adequately satisfies the requirements for bearish engulfing patterns, so it looks high probability. The bearish engulfing pattern looks set to reverse or retrace an uptrend that is well develops and it has large momentum on its side. There is also some exhaustion on the part of the bulls as they seem less enthusiastic as we go to the resistance level. There is some traffic around the 70.08 region but I wonder how significant it will be. Just have to watch that region. I will take the trade using TP. Placed a sell stop pending order.
Trade management: A three bar reversal pattern has appeared. This is so sad because I took this trade after closing another trade from this pair that was long. Now, I know I was wrong for taking a counter trend trade. Counter trend moves are dangerous and I have lost money taking on added risks. Too bad.
Trade Result Remarks: Lost this trade. 53.9 pips loss. Learning from all this loss. I know that I have to follow the process and be consistent before the profits will come. Have to be patient.
Lesson learned from this trade: If you take an entry on a trime frame, do trade management only on that time frame. Don’t go to lower time frames to do trade management. It can be confusing and deceiving. That is why I stopped the last trade on this pair that was profitable and took this one that was a loss. Have to remind that to myself.
Hey I usually wait for another candle to confirm the bearish engulf usually. Remember also when another candle comes it’s just indicating change whether it’s ranging/continuing/breaking down.
For example in my system looking at the bearish candle and followed by the green would allude that either the pair is pausing for a breather, getting ready to potentially make a reversal, or also just ready to start ranging. I like the way you look at your trades and wish you more success more importantly.
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Profit. GBPJPY. H4. Short.
Reason for trade entry: The pattern is a bearish pin bar and it is coming after a 61.8% retracement move. The pattern is confluent with a resistance zone. What I don’t like about the pin bar is that it is not protruding the way I like it, otherwise it satisfies other conditions for pin bar. It is also large. This trade is in line with the trend which is a downtrend. The pin bar is reversing a retracement that seems to have petered out after an indecision candlestick. Although there is some traffic, I have to watch it. Place pending order and it was triggered immediately.
Trade management: Entry triggered and trade started. The trade looked promising until a bullish engulfing pattern appeared. In the spirit of cutting short losses, I decided to close the trade and take whatever I was given.
Trade Result Remarks: Made only 7 pips profit from this trade. So poor.
I was reading up on price patterns and read that the price patterns I am trading with for entries, 1-3 candlestick patterns, usually are effective for 5 - 10 bars. That means, they are short term in effect. So, it would be unreasonable to expect to use them to ride trends, although sometimes they can initiate strong reversals in trends. Therefore, I have decided to change my exit strategy. Instead of waiting for the reversals to ride trends, I will take short term profits whenever I enter into a trade.
I think that this way, I am doing the following:
- Making sure the probabilities of having a profitable trade are on my side. Because if the price movements expected are short term, hoping for long term price movements are not the norm.
- Cutting short the number of losing trades I will have. When I exit say, when price is into profit for 50 pips rather than waiting to ride the trend, I would end up exiting in profits. I have noticed that many times I lose because I was hoping to ride the trend. I have found that this might be unrealistic given the new information I have. \
- The longer one stays in a position, the more the risk inherent increases. Taking this exit strategy would make me spend lesser time on positions.
Well, hoping to implement this exit strategy of only taking 50 pips per trade rather than waiting to ride the trend. The next weeks ahead will tell me what the outcome will be.
I would love comments on this new changes I want to make. Has anyone tried this and did they succeed? One thing that bugs me is that if I try this, the RR would be very low. But I would rather have low RR and profitable trades than potential high RR and end up losing the trades.
How to know addictive traders.
Addiction can be defined as the loss over the control of doing something. People who are addicted to a substance or habit have lost the power to control it. It is known that trading addictions do exist. So, here are some clues to find out if one is addicted to trading.
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You are addicted if you feel you have a need to trade. Even where there is no setup, you cannot let the opportunity go without opening a position. You are excited whenever you are in front of the charts and just want action.
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You are addicted to trading if you do not manage your risk. You believe that risk taking is part of the high. Part of the excitement.
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You are addicted to trading if you will not stop trading while losing money. You want to see something happening all the time. You love the action associated with trading.
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You are addicted to trading if it causes your emotions to be seesawing between periods of guilt and responsibility to periods of excess and irresponsibility without your checkmating it.
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You are addicted to trading if you always overtrade. If you take on unreasonable leverages or use unreasonable position sizing you are addicted.
If you find you fall into any of these categories, then take active steps to do a u-turn. Recognize the challenge, interrupt it, and then substitute it. That will give you success.
When the trend doesn’t look like your friend
One often used expression in trading is that the trend is your friend. That is a truth. But for some people, it is far unlikely a friend but more a cause for worry. They worry most after a pullback in a trend because many times price movement they had interpreted to be pullbacks turned out to be reversals.
If you are in that group and feel nervous about whether a trend is profitable or not, you can beat that fear. By practising what you would do on such occasions. Practice on a demo. Backtest your chosen reaction several times so that when it occurs, you are practically ready.
One practical method many have used to differentiate pullbacks from reversals is the Fibonacci retracement tool. They reason that if a correction has gone beyond the 61.8% mark and is approaching the 100%, then it is definitely going to be a reversal and they close the trade. Another method is to use swing points. If in an uptrend the market forms a lower high, they exit. If in a downtrend and it forms a higher low, they close the position.
Whatever method you chose to differentiate pullbacks from reversals, you can remove the fear by continuously rehearsing it. Go back in time on the charts and check out pullbacks and reversals, deciding what you would have done on such occasions.
When you are prepared, you will never feel anxious again about losing money when the market is in a trend and price moves against you.
This trade was clearly going to be a loss according to my strategy
