“Disciplined Trader” mentions having a weird relationship with the market when you can’t understand your strategy or the market you’re trading.
I used to trade on my phone only. I noticed that whenever I opened a position at night, I would have profits in the morning, then lose them again during the day.
So, I started a routine where I would open a position, go to sleep, and close it when I wake up. I must have called that technique “the sleeper” or something. Haha
I realise how little I understood in the beginning.
I’m a bit disappointed in myself. I realized that I could have traded so many of the pullbacks.
Numerous traders have warned against trading pullbacks. Several of them were pretty clean. Had I put more faith in myself, I could have traded them. Lost some, but mostly win.
I also just realized that there were pullbacks that I SHOULD have placed orders for. There were positions that I didn’t want to hit my stop, so I kept it far back. By doing that I missed my opportunity for a very nice entry.
However, I have to appreciate that I respected the market enough to not get greedy and maintain a conservative SL. An aggressive SL could get you stopped out. In the end, I got to keep my position open.
Now, I’m setting some orders, but I’ll continue to be a bit conservative. I have to fight the desire to get greedy and start throwing money at set-ups. I have to always maintain the idea “what if I’m wrong?”
This idea has also made me reluctant to add positions on certain trades. I want to have more faith in myself, but the market doesn’t care about my faith.
But, I must have some faith in my ability to execute my strategy and place some orders to catch some profits. That’s the only way to win. I at least have to participate. Even if I participate conservatively, just place a small order and take a chance. I could lose, but I also could win.
This is where risk management is king. It is your oxygen underwater.
As I review charts this morning I see so many opportunities I missed. Of course, hindsight is 20/20. However, many of the things I thought would happen, happened. I could have placed orders.
2 things:
1- I realise how much more practice I need in order to catch more opportunities.
2- I MUST respect that I NEVER know what will happen. I can guess by placing orders, though.
We’ll see how this week goes. My first time moving my SL to the recent bounce, and adding to the position.
I’m starting to catch the rhythm of how the market moves on a weekly basis.
However, not all pairs move at the same time, but some move very close together. Or, I should say have good entries for my strategy around the same time.
So, I had a few very nice positions that got taken out by fakeouts.
I’m not thrilled about the loss. But I don’t feel much regret about it. A fakeout is unexpected.
However, there is something I could have done about it—I could have placed some orders or kept my SL away from those areas when adjusting my SL.
Lesson learned. I jumped back in to those trades, but a smaller position because now my SL has to be wider to include that recent fakeout candle shadow.
Once, the market is in motion, I’m trying not to place any more trades.
To be honest, my brain is quite busy, and this morning, I rested it a bit. I was watching a movie for about an hour before starting my trading.
I guess we need to relax our brains sometimes.
My job is quite simple, so my brain is free to contemplate my life, past decisions, my future, etc.
I’m really trying to turn things around, and I have to remember it’s a marathon; not a sprint.
A positive approach. Well done. I have a couple of questions.
Did your total daily trades position exceed your maximum bank at risk percentage?
When you jumped back in to those trades, did the trades still meet the entry criteria that made you enter the trades before the fakeout?
Did you adjust the SL wider because the ATR increased dramatically for a short period, or did you not calculate your SL as a function of (for example) ATR(14)?
It’s great to see some real examples of trades. It’s also important to try continuous improvement, I have been doing that myself for about 3 years now. Still don’t have that continuous positive edge though
To be honest, On some I did make the SL wider. But on a couple, I just took a gamble and left the SL where it was because I doubted that price would breake that level AGAIN.
I could be wrong, but if I were to place my SL that far, the profit would be so low, I wouldn’t want that deal.
Perhaps I’m being arrogant, because some profit is better than no profit.
I was willing to take that gamble, though.
And my risk was staying the same. Around 0.38%
I’m trading several pairs. So, I risked 1% per trade, and I was wrong, then I lose a lot of money.
But a loss of 0.05% or less per trade isn’t so bad.
And to be honest, I’m trading to the max. I’m definitely overtrading, but for me, it doesn’t feel like overtrading. My psychology is stable. I’m not anxious and I’m keeping track of all my trades on my spreadsheet.
I used to get overwhelmed by all the information. So, I scaled it back to just one pair and took my notes.
I added more and more pairs to build my brain up.
Now, I look for trades in every base currency, and every chart.
I organize everything by base currency, and if 5 out of 12 EUR pairs are doing something similar, then I’m jumping in.
If only 1 gives me a signal, then so be it. But I’ll trade whatever I can.
If there’s volatility and I get an entry signal, I’m on it like white on rice.
Did you ever read Mark Douglas Trading In The Zone? I read it twice, ten years apart. The second time around was in the middle of studying and taking notes on the NNFX method. So regarding your jumping in to 5 EUR pairs, if you get it wrong, you get it wrong with five times as much risk than if you were in one EUR pair only. This is strategy, pure and simple. Those five pairs will never deliver the same opportunity for entry price. There will always be ONE that is slightly superior to the other four. So think about that logically, if you put five times your stake on just that one, your edge will improve, ever so slowly, over time. But that assumes that your trading plan has already been able to demonstrate a positive edge. If you do not have a positive edge, then jumping in to five pairs all exposed to the same EUR, you will lose five times as much as you are losing with one trade if you have not yet reached the certainty of having the positive edge.
I don’t know whether I have expressed myself clearly in this response, but I feel it is better to go far more slowly, with fewer trades, to be able to have the “administration overhead time” to analyze the actual results, and to confirm or adjust the trading plan accordingly.
I hear you. Let’s say I risk $10 per 5 trades. That’s a $50 risk total.
But if I risk $50 on one trade, and I’m wrong or get faked out, I lose $50.
Meanwhile, maybe 3 or 4 or my baby margin trades are still running. The return per trade may be small compared to the single $50 risk trade, but those 3 or 4 baby margin trades altogether will still yield nice proftis—especially considering the low risk in the beginning.
I do my trading once a day. No more. I have no intentions of watching one trade to see how it’s going, and possibly re-enter during the day.
I trade multiple pairs to max my opportunity for profits, while keeping my risk low.
If I’m wrong, I’ll lose 4%. But if I’m right, I’m profiting 10-15% per trade.
I am happy to hear this. Whether that takes 10 minutes or 10 hours, it is great to hear that you have set your timeframe and are comfortable not hopping around and end up as a “forex wage slave”
If I close most of my trades, and I have to scan all the charts AND place trades, it can take me 5 hours. However, once my trades are running, it can vary from 1-3 hours.
I sustained some heavy losses. A total of 2% loss.
I’m not happy about that.
But I’m happy that it wasn’t more. Risk management is king.
I didn’t assess my losses yet, though. To be honest, I was so tired I had trouble functioning. I needed a nap. I took a 15 minute nap, then off to work.
I’m starting to prefer momentum-based trades over S/R bounce trades. They can be difficult to jump into, and there are so many things that can go wrong.
I opened some positions that I wasn’t sure about, but I reduced the position and took the risk anyway.
I’ll see what I find when I review these losses. I’m excited to see what went wrong.
Also, this was the first time I used fib levels to help with the trades. Didn’t go so well.
Perhaps, if I didn’t use the fib levels I would have stayed out of some of those losing trades.
I did better the last two weeks when I didn’t use them.
The fib levels gave me a false reading, I think. I was reading the fib levels more than the candles.
I don’t mean there’s something wrong with fib levels, but just because price bounces that 50% level, that doesn’t mean it can’t continue thru that fib level the following day/week.
That’s where I was wrong. I thought I had bounce confirmation, and I didn’t.
Exactly! If the major trend is bullish, pulls back, and gives a green candle confirmation at a particular fib level, then the next candle continues further bearish, what’s the point??
This is why I don’t like indicators. I honestly prefer my bias trend lines and MAs. Simple.
And NNFX says that one of the best rules to have is "don’t show yourself by hanging around with the crowds. You become cannon fodder for the banker _ankers.
So he recommends avoiding all the conventional “indicators” that put you there in the first place, like S/R levels, Fib levels, round numbers. He also talks about the fallacy of aiming for a 3:1 reward to profit ratio as a “can’t lose approach”. Well at S/R levels, there are not two ways it can go, up or down. There are three ways that quickly turn into eight. Up, down, sideways. Next step - up to set the stops of the suckers, and sharply down to take them out, then a return to up. Manual backtesting a few (say, 50) such events with historical data soon exposes these fallacies. LOL.
