This morning, I saw the order I placed for EUR/USD hit the SL. It’s dancing around the TL I drew, so I’m staying out of it. I’m gonna focus on some other pairs for now.
To be honest, I placed a long AUD/USD trade and I didn’t even use my checklist. I went to the folder, got distracted and went ahead anyway.
Hours later, I just realised that I didn’t even use it…I set an alert on my phone to remind me tomorrow.
I held back from trading AUD/USD this morning. I could have won that trade. But it wasn’t an ideal trade.
I think a part of becoming a better trader is being willing to not trade.
It sounds paradoxical, but I think I have to be willing to not trade and just wait for the next favorable trade. Taking trades based on FOMO will mostly lead to a series of losses.
Just sit. Don’t trade. And wait. As it was said by Johnscott31 (I think) he said be a sniper.
Haha. Don’t go at it like a terminator, throwing your money at the market, hoping to hit something. Blowing up everything with these big inaccurate guns.
Just wait. Wait. Wait. Bang!
I’ve been catching a bit mire of my mistakes…
I traded an upswing in a channel, and I had a feeling the bullish channel was losing momentum, and I thought I should close, but I got scared of missing out.
The next day, the trend reversed and I lost half my profits.
The clues were there as the green candles got shorter and shorter, and the highs were getting shorter.
I thought I should close, but my greed got the best of me.
The good thing is that I got to analyze my brain chemistry at the moment.
I was focused on what I wanted to happen, instead of what the chart was telling me.
Have you considered writing off the risk? For e.g. you’ve just entered a trade with a 15-pip SL but you write it off as a loss already, atleast help alleviate mental pressure.
It’s a trick I learnt playing online poker tournaments. The top 10-15% of players cash in tournaments you end up more often outside the money than in. And you can’t force yourself into the money if u’re card dead (card dead is a term when you’re getting a string of terrible cards to play) an entire tournament or string of tournaments. It’s a realistic probability when you play a high volume. You’re forced to ignore what you’ve put in as tournament fees and manage the cards, table according to situation u’re in.
It’s a simple trick but helps a lot psychologically I believe. Because you’re in the moment and you focus on your entry/exit strategies. If the trades don’t go your way you can write it off to the bad probability it is most times (provided you have a tried and tested plan).
Hmmm. Well, I kinda do that. I read “the disciplined trader.” And upon reading it a second time, I wanted to focus on one thing at a time.
So, for starters, I wanted to keep in my mind the idea that “what if I’m wrong?”
This way, if I lose, I can scale back my lot size. Not my SL, but my lot size.
It helps keep my greed in check when opening a position.
So, in that sense, it does alleviate mental pressure because I didn’t risk excessively.
Is this similar to what you mean?
If I understand this, this is the thought process before initiating a new trade, after a losing trade? If so, then it’s different. I was referring to the mindset after opening a trade, while the trade was still in progress.
The two predominant emotions during an ongoing trade are either fear or greed. The fact that you have “skin in the game” heightens those emotions, enough to trigger impulse decision making and override plan/process. But say you accept that the open trade is lost & no longer within your control. Say it’s at the mercy of the ebb & flow of market forces, then the best you can do is follow your predetermined strategy.
Obviously you can scale out of your position or just close it if you think it was incorrectly taken to begin with. But letting go of control, being a casual observer with no “skin in the game” and following your plan to the tee is the objective then.
Over time the measure of success becomes how well you stuck to your strategy or plan. As opposed to how much you made or how many pips you netted. Not that those metrics are unimportant because they determine the overall success of your trading plan, which should obviously be tweaked over time.
When you mentioned this bit I was wondering if you were looking at this glass half empty instead of glass half full. Because you atleast locked half your profits. Did the trade pan out as the trading plan dictated? If so, then is it fair to be critical of it? The Michigan Sentiment Index was the lowest in 11 years apparently, which saw JPY and CHF gained a lot yesterday. So would the trade have worked if not for this report?
I just want to be clear. I’m not trying to advise you. As far as I’m concerned you’re a more experienced trader and I’m only asking questions because this is the approach I’m taking. Basically there are things I could be overlooking too.
I agree. However, for me, that’s changing. My entries have to be mechanical and rigid. My exits have to be flexible. If a short-term bull trend is losing momentum, and the candles are getting shorter…it could be just a short distance from my TP…and if my strategy says not to touch the trade at all, it’s time to close.
My goal is to make money, not to make my strategy as mechanical as possible.
My goal is to make my strategy as profitable as possible—not to be mechanical.
Probably half is glass empty. To be honest, this last series of trades netted an account increase of 8% approximately.
But it could have been higher if I just closed everything when I thought the market was gonna reverse. And I actually could have started reversing some of my positions, and been in the green by now.
Thanks but, that’s definitely not true. And even if it were, experience doesn’t mean anything without the consistent profits to show for it. At least in trading anyway.
And I’m not yielding consistent profits. Yet…
Think we’re on the same page. Just that your plan allows for multiple exit strategies based on a number of underlying criteria. How do you determine where you deviated from plan?
For me there are trades that that don’t work because:
A lacking plan is preferable to have because that’d mean fine tuning it (for e.g tweaking the rigidity of the rules/strategies) will fix it. The deviations from the plan are high concern trades for me because this is marked indiscipline. Even the best laid plans will fail with those deviations.
Are you making the changes because you noticed a net positive outcome over a backtested period of time? Or making changes specific to the outcome on FRI? Risk of doing it on the events of one day is inadvertently breaking things that work in your plan.
I had several good trades where my entries were good (but not perfect), and the trend was going up (I trade long and short btw) and my profits were looking pretty nice. And my expectation was to hold the trade for months, not weeks or days. So, my trend will hit a resistance line, and goes bearish. And it stays bearish, only to return to the original price.
So, that was a USD/DKK trade and and I lost probably 70% of those profits. What I want to happen has nothing to do with the market.
The market is always right.
I learned the hard way that the market doesn’t care about my trendlines. It doesn’t care about my support or resistance.
It’ll bounce, break, and ignore S/R lines as it chooses. I just have to prepare for each of those outcomes, and risk management will keep me in the game long enough to survive the losses and catch a win.
That means I also have to study previous trends and see how they can morph as they progress. You think a channel is narrow, only to find out that it’s wider than you thought.
I’m digressing. My plan is based on bounces and trend following.
Price could bounce the MA20/50/90 on the D1, W1, or even M1. It could touch it and bounce immediately, or it could just get near it.
Because of all these variables, I’ve learned that my exits have to be flexible. I don’t know when it’ll bounce or what it will bounce off of.
Hence my two trading accounts. Long term and short term.
To be honest, I don’t watch to economic calendar anymore. I saw the trend looking tired across several pairs, and I was hoping for a little more of a push at the end of the week. But it didn’t happen.
If I had closed, my profits would have been higher. Lower highs, shorter green candles, to me it says the trend is losing momentum.
However, my entries must me mechanical and selective. I can’t keep forcing trades. These mistakes are costly. 15 and 20 losses are not acceptable for me. Many of them I should not have taken.
Now, I’m working on being more selective. And I’d also like to keep my risk under 1%.
What kind of trades make you deviate from your plan?
How do you mean your plan wasn’t robust? What was it missing?
Not anymore. Too risky for me. It could break out in one direction, then reverse, then resume its original direction. No thanks. If I had a straddle order, both orders could get triggered, and both SLs could get hit. Too many variables.
I prefer to wait for the resistance bounce in this case of NZD/USD D1 right now.
I have a running mid/long term analysis of the 28 pairs. So one of my rules is that if the trade is going against the recommended direction of the analysis I don’t open a position. No exception. No trade even if there is an overwhelming amount of evidence that contradicts the prior analysis.
Trade journal snapshot. Here are the instance where I’ve broken the rules for this month:
Most of the trades are positions I took despite the analysis recommending a “hold”. There’s even a trade where I went short without any recommended analysis (a blank field is a trade I took without referring to the underlying analysis for that currency pair on that day). This one trade especially is terrible and is clearly FOMO. Doesn’t matter if I profited from these trades or not. I didn’t follow the rules and that’s all that matters.
Carrying on from the earlier example if my currency analysis is incorrect to begin with. For my rules to work I have to rely on good analysis. If this is consistently incorrect then I’m obviously missing out on very key details.
Another example is not scaling into a strong trend. I’m now move my SL to a 1/2 H1 ATR below the day close and open a new position the following day, if currency is found still trending. It’s common sense and is a no brainer but because I was looking at so many pairs and was doing certain things mechanically I didn’t realise something this obvious.until I saw the results of some trades.
EUR/USD! It’s been quite tricky lately.
I know that feeling. Then FOMO kicks in…I’m working on getting a grip with that myself.
I had rules about trading the counter trend, because I’ve taken some losses like that. But there are times that it works, and it’s also a way to get in early on a reversal. The losses are just part of winning those counter trends. But on H1, I suppose it’s riskier because it happens so quickly.
Similar experience here. In my case I’m avoid reversals mostly where I can because I’m not skilled enough to trade them properly yet (my entries are too inconsistent and flawed). I have to test and write a set of rules for reversal only and not enter them on FOMO.
Edit: I just noticed half of those trades (7/14) were on GBP/JPY despite MY OWN analysis recommending against taking those trades… that’s just dumb 
No no. I don’t think that’s dumb at all.
There are people who only trade EUR/USD. Why would GBP/JPY be any different?
You are learning how it moves. If you trade it frequently, you will learn that pair’s rhythm better than others who don’t trade it.
I think it’s good to have your favourites, and some extras on the side.
For example, the first pairs I look at are the majors, USD/DKK, and (recently added) USD/SGD.
However, after that, I’ll look at the rest of the other pairs.
@darthdimsky Trade on!!!
Oh man. We gotta discuss this. This is what I’ve been working on…
That’s the issue though I’m not following specific currencies.
Every day I have a mechanical method to identify potential trading pairs and use the prior analysis to determine whether it’s a good trade or not. Because it’s mechanical I’m apathetic to currency pairs, meaning I don’t remember whether I had a good/bad trade with the same currency pair the previous day, until I analyse my journal or I still have a running trade from previous days.
Basically what this means is that I made an independently conscious decision to break my rules 4 times on each of those unique days for GBP/JPY.
When I took the first trade on the 12th I didn’t know I had failed twice already on the same pair on the 06th. But when I took the 2nd/3rd trades the same day it was either emotionally driven by the loss or I believed I timed my entry incorrectly.
Either way they are clear deviations from the plan and should not have happened in my case. That’s because I have another rule that states if I find an analysis to be incorrect I halt all trading, close previous analysis (marked no longer valid) & open a new one for the pair. By open these trades I believed the analysis to hold true and still went ahead. This makes it a serious gap in my trading for me.
I’m going into too much detail on my own trades and methods. I’ll stop and do it in my own thread when I decide to open one. LOL.
I’m just about done with my orders and trades. There are several trades that I normally would have taken, but decided to leave alone because there was too much room for error–too much uncertainty of where price could go.
However, I also see trades that I didn’t notice or doubted, and they could have been very nice winners.
No point crying over spilled milk.
Most of my recent trades have been around 0.5% risk or less. I’d like to trade 1%, but it seems scary. I’d be scared to trade 1% on 10 trades, then the market reverses.
However, trading 0.5% with good entry can yield nice profits. Then again, there’s no need to feel like I have to trade 1%. I think that strategy works if you only have 4 or so trades running across less-correlated pairs: AUD/JPY and EUR/USD, for example; as opposed to several USD minors.
I kinda like the strategy I’m using now. Low risk with early entry.
This is a trade I lost. D1 CAD/NOK. I was fishing deep waters to dig up this exotic pair. Haha
This is a mistake I have made several times: taking the wrong trades.
The white arrows are the price zone where I should have placed my SL. But I didn’t do that. I placed my SL outside the support zone for that channel. Unfortunately, that wasn’t enough. I wanted this trade and took the risk.
One of my rules is to include recent candles in my SL placement. But, if I were to do that here, then the pip value would be so low I couldn’t make any money that would justify this trade.
So, instead of just walking away from the trade, I forced it and took a loss.
