I’ve been trading stocks since college, but not until recently did I realize I was gambling (usually picking a stock and waiting for the price to increase then selling). Once I started trading forex and the losses started building up did I realize that I needed more information and joined babypips. Quick background, back in February i funded my account with 10k and loss 3.5k in several weeks. I was scared/devastated, closed my account and haven’t looked back until recently. A friend of mine told me that he made 20k of course he didn’t go into details about his profit margin and over what period of time, but it was enough to spark my interest back inforex. I funded my account with 500 with the idea of getting to 700 (because that would mean I am proven this time) then adding 1k at every 200 dollar increase. At the time I didn’t really understand/follow money management rules and lost a little more than half my trading balance in 2 weeks. Since losing half my balance I have made it through most of the education course and things are looking up. My ratio is about 65% for profitable trades. Still not where I would like it but steadily improving. - I really wanted to share my story lol.
Now the question… I know it has something to do with my state of mind and wanting to lock in profits but I can’t seem to let a position extend beyond 20pips. That’s my go to to close out positions even though I regret it. Every time I hit20 pips I take profits and I know it’s the fear of losing my profits which has happened to me plenty of times. Any ideas on changing my trading psychology?
It’s very tempting to close out positions when you have an open profit, especially with the chance that the price action can go down at any moment.
If your heart is pounding as you watch the price action move pip by pip, I think you are sizing your positions too big for what you can handle to lose.
I find it really helpful following a trading plan, because it helps me chart beyond just looking at the pip gains, just gotta have faith that it will work and that losing is part of the game.
I am also on the learning process, hope this helps you.
Sounds like you want very quick affirmation that you were right, as much as very quick increase in your balance.
If I’m right, this is effectively emotional trading. You’re letting the feeling you get from a profitable trade drive your trade management plan. You might be making money but clearly you’re not getting the best return on investment and you’re not happy with it. Maybe like a shopaholic who gets a buzz from buying new shoes - but not so much from wearing them.
As a first step, distance yourself from the trade. make a plan, print it out, practice it, stick to it.
Then, use orders to enter/exit, don’t do this live: you can watch, but don’t touch.
When you have a winner, let’s say its a long, as the unrealised gain matches the original capital risk and price is now in a trend in your direction, open another trade with the same capital risk but raise the stop on your original trade to the current price. Let the trades run in parallel. Keep doing this until the trend seriously weakens.
Its your decision how much profit to make in a year. But every trade, whether its 10 per year or 1000 per year, should make maximum profits, not just enough to buy lunch.
Hi man.
65% profitable trades is IMO a good ratio if your TP (pips per trade) is greater than your SL(pips per trade). To go beyond your mind barrier you can try using partial close on some of your 20+ pips trades and moving your SL on break even or to match half of your current profit so far for the remaining part of the trade. This will potentially bring you additional profits while risking significantly less with a guaranteed profit in the end. So you are not going to suddenly change your psychology but still will be making some steps in this direction.
Cheers
You hit the nail on the head. I do want quick affirmation and increase. I also need to work on positioning my stops. So far I’ve been scalin down my contract size. I still have the urge, but it’s more manageable.
