Just finished trading. I was tempted to take some trades, but decided to hold out for better signals.
I was thinking of EUR/USD’s recent mocements, and I suddenly thought of a lesson in Pipsology: “sometimes the market isn’t tradeable”.
Yes. Up to 80% of the time it is said to be “not tradeable”, if you stick to one trading plan (for example, trend following, trend reversal). But if you have three plans for trend following, trend reversal and “consolidation” then in theory, the market is always tradeable. The million dollar question is "what type of market are we in during the timeframe under consideration (scalp, day trader, intraday trader / swing trader or long term (fundamentals) trader? And how do we know if and when the market type is going to change on us during the trade lifecycle from set up > entry > trade management > trade exit. All trading plans should address each of these lifecycle stages, for each trade, and should have a written process based on plan principles and back tested actual results analysis. A lot easier said, than done.
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I’ve taken some losses this week. Nothing alarming, but more than I’m ok with.
So, I’m looking forward to some analysis this weekend and see where my head was with some of these trades.
I trader recently wrote “trade what you see”. I’ve heard it before, but this time it’s really got me thinking. During my chart review I saw soooo many trades that I could have taken that would have been a nice profit.
Of course hindsight is 20/20, but I’m seeing actual trading signals but they weren’t in the exact place I expected them to be.
I searched for that trader’s post and found this instead:
This idea really has me thinking. I keep seeing so many signals I should have taken but didn’t.
Why? Why? Why? I was there that day! I saw that chart on that day. I wasn’t sleeping in. I didn’t skip that day. So, what’s my problem?!
My friend warned me that “it’s not a game.”
Trading can change your life, for better or worse, in a matter of months.
I’d rather be on the profitable side.
But that doesn’t mean desperate trading. It means pay closer attention to everything you’re doing.
And when you see an entry signal, you take it in accord with your strategy. And same for the exit. Don’t try riding it to the moon. Riding it to the moon will leave you at break even instead of a 10-15% profit. Sure, it could’ve been 50% profit that time. Oh well. Keep it moving!! No time to waste!!
I’ve gotten so caught up with trades that I expect to last for weeks, that I’ve ignored trades that may only last a few days.
I keep trading what I want to trade. But that’s not how trading goes. You have to trade what the market gives you.
Some could be days, some couls be weeks, or months. I have to be able and flexible enough to tell the difference.
The market tells me what to do, not me just doing what I want or what I think price is gonna do.
“Well, price is going down so I’m shorting it all the way down. It’s giving at exit signal already at the MA50 with 35% profit? I don’t care. I think it should be continue going down, so I’m gonna hold”
Bam! Turns bullish, and now I’m stopped out at BE.
I also mentioned this recently in the above post. It does not universally mean abandoning indicators or any other form of price modification. It does not mean just staring at the price alone. If one does that all you will see is a lot of up and down chaos. Even so-called naked charting involves comparative evaluation with earlier price developments such as highs and lows, the only difference is that one doesn’t necessarily physically draw these connections, which might cloud the issue.
It also does not mean that the market is some kind of independent beast with its own mind, character and secret ambitions.
"Trading what you see" simply means identifying what is actually happening on your charts regardless of what your own opinion might be of what it should be doing.
And the reasoning for this is so very simple. The current market price is just a barometer which, like a temperature thermometer, only reacts to the actual variations in the current buying/selling pressures. It does not react to opinions, or writings, or hopes, or dreams. It is highly sensitive and it only reacts to actual transactions.
Therefore, the price right in front of you is simply, but highly effectively, telling you what the majority of all the market participants is doing right now.
Nobody can know all the publicly available information relevant to a market, nor can anybody know all the private information relevant to a market…and even if they did, nobody can know how the majority of the entire market is going to react to said information, or by how much, or for how long…
But you can monitor the total impact of all this information and how the majority of all the actual participants have decided to react to it all - and you can monitor it live, as it happens.
Price.
So where would you rather place your trust when risking your own money? On what you as one, small, partially aware, individual thinks? Or on what the rest of the participating community is actually doing?
This does not mean one’s own opinions are meaningless at all. If one feels strongly enough about what should happen next then all this means is read the price and wait until it tells that the majority of the rest of the trading community is also thinking the same and is reflected in the price - i.e. trade what you see, when you see it.
And this is where technical analysis enters the picture. As we all know, it is very easy to say “just watch the price” but price is often very erratic and a single candle will often entirely reverse its preceding candle, etc. But there is a “red line” that is usually running through the overall on-going sequence of candles, and our TA (whether indicators or PA or both) should be designed to identify that line and tell us something about its characteristics (e.g. an underlying trend that is starting, exhausting, etc). If our TA does not provide us with accurate “intelligence” how can we expect to know when to enter and when to exit?
This is all wrapped up in the simple phrase:
"Trade what you see"
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The last two weeks haven’t been so great, trading wise.
My profits were holding steady, but my account balance has been dropping. My risk management has been good.
However, I’ve been taking bad trades apparently. I told myself to take more trades. And I have.
But for my strategy. The market has been less tradeable.
At the same time, I saw a trade that I didn’t pay attention to the details and I should have closed, but now it’s retracing, and now I’m in “hope” mode that it’s only retracing and not reversing. Which is no good.
I took a MA bounce trade Monday morning. Price broke thru. I thought it would go bullish, but it turned bearish and was moving fast. So, I put about 0.5% risk. And then shortly after, I added another 0.5% risk. Then price pulled back quickly within the same hour, and I got stopped out.
First of all, that’s not even my strategy. I just jumped in because price was moving and I wanted in.
That was my last straw. I got desperate and traded something I wasn’t supposed to.
Into the cold shower I went.
I’m starting to feel burned out, to be honest.
I checked on my trades this morning, and decided to just go back to sleep for a while.
I’m looking at some charts now. I’m realising that right now, it’s mostly not tradeable. The best thing to do is to wait. Just take a look and see what’s going on. But DO NOT trade. My strategy doesn’t fit right now for most of these pairs.
That’s probably why I’m taking so many losses. I’m losing patience and taking trades that I should be taking.
There’s just two trades I’m watching carefully. Other than that, there’s nothing going on for me. So, I just gotta stop being desperate, and just wait.
I’m here, feeling frustrated that my trades are going against me, and I don’t understand what’s going on with the market.
I lost EUR/USD, then missed a trade due to disbelief.
I learned from analysing my losses last month that I have to take more trades. But I have to keep in mind that it means takes appropriate signals.
I need to pay more attention to details in price action, rather than just glancing over it. Also, be more patient—not desperate.
If the market’s not tradeable, the thing to do it wait—not lie to myself and justify bad trades that are losing trades before I even take them.
It doesn’t mean I’m wrong if I’m not trading. The more PROFITABLE thing to do is just wait. Not losing money on bad trades is the next best thing to earning money.
I’m realizing that the reason I didn’t do so well recently, is that my style doesn’t fit the current market.
Perhaps I’m just repeating… I probably am.
But if a trade doesn’t go well, and I enteted at the right time, it just means that my strategy doesn’t apply to what that pair is doing at that moment.
What I did wrong was change my strategy to fit what the market was doing. And I was wrong because I employed an unprofitable strategy out of desperation.
But I shouldn’t blame myself for the market doing something that doesn’t fit my strategy. It’s inappropriate to blame myself for what the market does. That’s unhealthy because all those negative thoughts will discourage me when I see an actual trade signal.
I look at these charts and I think “I should have done this…I should have done that.”
That doesn’t help. What does help is that I learn from it. A big signal for me is when a candle retests the previous candle’s low/high. But sometimes, I don’t notice it. I have to develop a habit of paying attention to things like that.
I’m studying some charts. I see a trade from mid-October that I should have taken. If I did nothing all year, and just waited for that one trade, I’d be waaay ahead.
So, I supose my solution is to keep following my strategy, and be patient.
I have to be willing to not trade for a month. If there’s no signal, then there’s no trade. Lately, I’ve been forcing trades. I think it’s due to desperation and also the need to FEEL busy. And I think it’s faulty thinking. Being busy trading doesn’t equal profits. There’s no trade, trade, trade. That philosophy will deplete my account. The grind, for me, comes from waking up at the same time, everyday, checking the charts and trading ONLY when I see a signal.
The grind isn’t in the trade—it’s in the routine of watching the charts. That’s something I have to keep in mind.
The profits aren’t in loads of trades, for me. The profits are in waiting. If I take a signal, and price does something unexpected, that’s ok. Not trading more, but more accurately; with more patience.
This will be key for me.
Since I started, I’ve really enjoyed my MAs.
But there have been moments I’ve felt betrayed. Or, distracted, more like it.
I’m actually starting to delete MAs from my charts. I don’t know if it’s good or bad, but there is a part of me that feels kinda relieved.
However, I have seen lots of trades that work with MAs. I’m quite on yje fence about it.
I’m sure I’ll figure something out.
I’m reviewing charts and I see moves that I wish I had caught. However, even though they were very nice swings, the entry signal doesn’t match my strategy.
This is where I start to confuse myself and start to compromise my strategy.
I feel guilty for missing swings. I think “where was I??”
But if the entry signal was not valid, then I shouldn’t feel any regret. Because if I start taking invalid signals, I’ll be taking bad trades. The key is sticking to my strategy.
Again and again.
Not sticking to my strategy is self-sabotage.
In general, I would agree with you, but you also say:
If these are moves that are of the kind that you are trying to catch with your current strategy then would it not be appropriate to take a pragmatic look at the elements in your strategy and see is something needs tweaking or removing? or maybe it is lacking something else?
You mentioned that you have already been removing some MA’s, which suggests you perhaps currently have less than 100% confidence in your present set-up?
Surely, the starting point for any strategy is that the market is always “right”. It cannot be “wrong”. So if the strategy is not catching the moves it has been built for then it needs an overhaul.
On the other hand there are always moves that one wishes one could have caught but they do not fit our trading plan, or choice of instruments, and therefore are not an issue as such. For example, an intraday scalper might see a lovely long trend lasting weeks but it is not within his trading plan to ride it - and we just have to accept those! 
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This is more the case with me. My desperation/impatience still lurks.
That’s why I wish I caught those swings, even though they didn’t match my strategy.
And when I’m back testing, I have to be honest that I WILL NOT catch every swing.
That’s the part that’s bothering me. But I just gotta let it go.
Catching one good swing is better than losing on three.
I’m confident in the strategy, but my problem is following it.
However, I get distraced by MAs. I can’t focus on two things at the same time. So, I’m gonna focus on price action instead of indicators.
It makes more sense to me. This will bring a bit more clarity to my focus and strategy execution.
In the past I had two strategies: MA bounces and price action. I think both are plausible strategies, but price action backtested much better.
I’m narrowing my focus and trying to maximize my strategy.
Centimeter by centimeter…
Excellent progress! 
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I’ve reached a point where I have to humble myself. If I don’t humble myself now, I’ll never pull the profits that I want.
I’ve been trading loads of pairs. And it seems that my brain is overloaded with information.
So, I’m planning to take a step back, reduce how many pairs I follow, and just take my time.
My first problem with that is that my trading time could be reduced to less than an hour. Which is very strange for me. But, I’m so desperate that I must be willing to not behave desperately.
And for me, that means trading less.
Right now I have over 10 trades in profit, but in the meantime I’m taking losses and my account is slowly going down. So, it’s time for me to take a step back and reassess.
If I’m being totally honest, instead of trading so many pairs like I am now…I could have followed just five pairs, taken five trades a month, and be in a way more profitable position. Actually, if I had even just three good trades a MONTH, following the same three pairs, I’d be better off.
So, why don’t I do that now? Why haven’t I done that in the past?
Greed.
I thought by trading more I’d be increasing my profits. Why have one horse in a race, if you can have 12?
The problem with that idea is that there’s a lot of information to keep track of. An excel spreadsheet can fix that. And it did. But when you lose 8 different trades on 8 different pairs, and then you’re reviewing other setups at the same time, it can get overwhelming to juggle.
And after that many losses, you get scared and reduce the risk or just stay out entirely. Then the next day you see that you should have taken that trade, and now it’s too late.
I’ve been chasing my tail, and now it’s time to go back to scratch.
I’m not sure how I’ll manage the selection just yet. I’ll figure something out.
And what’s a trader’s first step in going back to scratch?
Watching the Last Dragon, of course.
Today I saw a couple of trades that I wish I had taken. But, I had to remember that the reason I didn’t was because I was reaching my risk limit and didn’t want to exceed it.
I just have to remember that even though I WANT to catch every trade, it doesn’t mean that I SHOULD.
I always have to keep in mind “what if I’m wrong?”
I opened just a few positions today.
I feel pretty good that I got to move some SLs to BE.
I’m taking my time a little bit more. Trying to pay a bit more attention to what’s happening in the trade. What the chart is trying to tell me.
It’s going better. It’s all about baby steps. Thanks, Dr Marvin.
Another thing I’m noticing is that some pairs just don’t match certain strategies.
I thought I had eliminated all the pairs that don’t match my strategy. But there are actually a couple stragglers. I took a trade, and it was in the red by just a little.
I zoomed out and realized I probably shouldn’t be trading it at the moment. So, I closed the trade at a loss.
It was a small loss. Better than getting stopped out. I have to remember patience.
Yesterday, I started getting curious about CFDs. Apparently, they’re illegal in the USA. So, that leaves me with futures trading.
I’m interested in getting familiar with it. I opened a demo account, just to mess around and see how the charts look with these instruments.
I closed some trades today. AUD turned against me. It wasn’t so bad because I moved my SLs to BE.
However, I had several trades doing well two days ago. It was a very nice profit. However, some prices have reversed or started doing questionable things. Which, I couldn’t have known until after the fact.
I could have closed a few days ago with a very nice profit, but it would have been an emotional decision, not a strategic one.
However, it would have been a profitable decision. So, which is right?
Do I close because there’s a nice profit I don’t want to lose, even though there’s no exit signal and the exit seems totally premature?
I suppose this is live and learn. But, if I had closed based on my emotion, I’d have more money right now.
According to my backtest, I did the right thing. But it sure doesn’t feel like it.
You can only take what the market gives. What if the market gives you a nice profit, then does something unexpected, and you lose it?
Do you wanna be right or profitable?
My strategy tells me to hold on, and don’t close yet; just let the trade work itself out for better or worse.
It just sucks when you see your profits drop and it’s not a simple retracement to withstand.
So, right now the market’s moving, and I’m expecting an entry signal in some pairs perhaps tomorrow.
The worse thing for me to do right now is to start chasing trades. So, I checked on my open trades and the additional three or so pairs I’m watching. I didn’t check the remaining pairs on my watchlist because if my trades went against me, then everything else is moving in a similar fashion and any entry signals I would see now would actually be false signals.
I’m not gonna bother. Time to just sit on my hands. Let’s see what tomorrow brings.