Trading journal

I’m gonna keep adding to my diagram. I think when I’m ready to take a trade, I really gotta slow down and review my diagram.

Just take my time. If I don’t get to trade any other pairs, I shouldn’t worry about it.

I should focus on quality; not quantity.

Just like Lincoln sharpening his axe. I’m gonna try to keep this in mind.

Before going to sleep last night, I had a thought that recently I might be chasing false signals. I need more patience.

It’s basically FOMO. Switching from buy to sell, then sell to buy. I doubt my trades.

I have to follow my strategy, and WAIT for the signals. I get so scared that a random move is gonna happen. A big move is gonna happen and I’m gonna miss out.

I have to remember that those big moves usually don’t just randomly happen. There are clues. I get so scared that I chase anything that LOOKS like a signal. Sure, there are false signals in my strategy, but there are precursors to that–certain conditions.

I often ignore the surrounding conditions and just take trades. Sometimes, you just gotta take a chance because you never know. If you see a doji, and you’re not sure if it’s gonna go up or down, you place a straddle order. Next day, both orders got triggered and stopped out. Maybe that doji wasn’t even worth trading…you can’t win if you’re not in it.

That’s when you start taking losses and when you finally catch a win, you’re breaking even, maybe.

I’m still making some mistakes because I’m thinking about so many things at once. And it becomes extra confusing if I don’t have the answer in my diagram jumping out at me.

My mind gets super flustered and I can’t think clearly. Seriously. That’s when I start overthinking and concentrating on the wrong thing, and I’ll start considering details that aren’t even worth paying attention to.

¨What about this candle? What does that mean? What about that over there? Is that a sign? But that contradicts this candle here. Should I buy? But this candle here says I should sell.¨

This is when it’s time to move on to the next chart. This is when I need answers in my diagram. And if I don’t see them, I need to add them when my mind clears, so that next time, I’ll have something to help me.

I can’t beat myself up over these kinds of mistakes. I just have to be patient with myself. Sure, I want to get to profitability faster, but some things can’t be rushed. The only way to go faster, right now, is to work on my diagram and add helpful details for future trades.

I may have said this already….

I’m realizing how chaotic my trading is. I’m gonna have to add an element to my charts to help me decide how I’m trading that pair, and then stick to it.

But this was pretty much the first week testing my diagram live. I made some adjustments and I learned. Let’s see how next week goes.

Today was very very strange. I felt so so confused today about how to trade.

My brain is taking in too many signals. I’m having trouble filtering which signals I should follow, and which I should ignore.

Some trades I’m long, but I see something that makes me think I should be shorting.

That’s a sign of something I need to fix. I took a note on my notepad that should try studying some retracement/consolidation areas that present some confusion and how I should handle it.

I had no confidence in any of my trades. It’s very frustrating. It makes me feel like all my studying and trading has been in vain. How could I be studying and trading for this long, and be so confused?

With several trades, it only felt like whatever I do, the market will do the opposite.

It reminds me of The Disciplined Trader. He talked about when you have a strange relationship with the market.

I’m acting like the market is against me. The market’s not against anyone. It just does what it does.

I’ve said before that there are always clues to what the market is about to do. I can always see it in past charts. I feel like none of it helped me to day. I have to find out why.

It could be because there were so signals for me to respond to at the moment. And if there are no signals, then my brain is just gonna make something up.

This is a problem. My diagram didn’t help much. Maybe I was too anxious to understand it.

It also didn’t help that I went to bed late, woke up late, and had less time to trade.

One pattern I’ve been noticing is that I just keep making new mistakes.

Every time the market consolidates or swings, I make new mistakes.

But the new mistakes don’t turn into profits.

I have no idea what was wrong with me today.

The decision should be simple. Buy, sell, or wait. If you’re not sure, do you still stay out? Gotta be in it to win it, right?

Is it better to just do nothing?

Any strategy has multiple elements to it. Mine has several possible signals. However, they’re not formally prioritized. If there are two or three signals in a consolidation, which one do I follow in order to trade the breakout?

Backtesting should reveal that. Sure, numbers don’t lie. Charts don’t lie. Research and data is black and white.

However, the error occurs in the interpretation of that data. I need to finda way to avoid what happened to me this morning. I felt completely lost in my trades. If I’m feeling like I’m gonna lose no matter what I do, then something’s wrong.

I was flooded with emotions. The more I looked at the chart, the more confused and frustrated I felt. No helpful clues jumped out at me. The more I saw, the more confused I was.

It’s funny how different set-ups look when your emotions aren’t running. I think I should further reduce how many pairs I’m watching. Perhaps just five. I want to focus on quality; not quantity.

I must admit that I tried going thru the first few pairs on my list, and I felt rushed to make it to the end of my list.

I’m further reducing my list to 6 pairs. It’s actually uncomfortable deleting more charts. It feels like I’m saying good-bye to opportunities to make money. Obviously, that’s not the case. If it was, I wouldn’t be deleting them in the first place.

I will continue to study various pairs to gain an understanding of price action, but I’ll only be trading these 6 pairs.

Trading is a lot easier this morning with only 6 pairs to watch. I’m taking my time. However, I’m noticing that I’m running the risk of taking too long to assess what’s happening in the chart.

I think this is good practice though. Once I noticed I was taking too long, I tried to focus a bit more on what I was seeing in the next chart. Above, recent high? Nope. Below recent low? Nope. Any reversal signals? Nope. Ok, next.

I added a ¨thoughts¨ page to my journal. I haven’t journaled my thoughts in a long time. Finding the most comfortable format will take some trial and error (spreadsheet vs word document), but it feels pretty good to write my thoughts.

Trading seems easier on the brain, today. Just six pairs. I’m watching the charts, and logging my thoughts in my journal. I went with the word doc, by the way.

I’ve complained about how I get distracted and take longer breaks. However, I’m feeling like perhaps that’s not such a bad thing. When I’m thinking hard, sometimes I need to do something else, to let my thoughts move to the back of my brain and just simmer a little bit. Kinda like how people often get ideas in the shower.

Distracting myself, but coming back to the task, is a way of giving my brain some space to think and process the situation.

I’ve been writing in my excel spreadsheet and in my emotional journal. Writing here seems redundant, but this is a bit different because I’m writing to share here.
I don’t know.

Anyway, no good trades to mention. I seriously have a problem following my strategy. I did it again. I got confused in a trade because there were mixed signals. There SHOULD be a priority. But I didn’t make one…(I added it to the diagram just now).

I was feeling like my diagram wasn’t guiding me thru the mixed signals. I had two signals. I didn’t have any answers about what I should do. There were no clear answers. Or maybe I was too distracted to follow what the diagram was showing me.

GBP/USD, EUR/USD, and AUD/CAD were looking super similar, and each had slightly different signals, and I was mixing the signs from all three. I was buying, selling, buying, selling. Switching sides several times; each with a loss. This is ridiculous.

However, this is the first time I’ve ever watched my trades so closely. I’m learning a lot, which is nice. But eventually, I’ve gotta be along side the trend, not two steps behind.

And when the fakeout candle hit, it made sense, and I thought I was wrong, so I closed and reversed my position. Then, I figured out just now that it was a fakeout, and I didn’t take advantage and trade it. So I lost again.

My problem this time was feeling like my diagram had no answers for me. Perhaps I was so confused and BELIEVED that my diagram had no answers.

What can I do for next time? I’ll have to think about it.

I just took a look at one of the six pairs I’m watching. I see everything clearly now. The signs were all there, but I was so paranoid about missing out, I was worried about what each move means.

For me, when it comes to reversals, momentum is king. If a swing is losing momentum, it’s a wrap. There may be a couple more candles that push price a little more, but it’s ok to take those losses because that trend is about to reverse.

My problem was that I doubted the strategy because of other candles of a weaker significance.

I could have traded those weaker signals, then jumped back in on the major trend after that fakeout/retracement ended. But I mistook that retracement for a reversal.

And I was so flustered and confused that I didn’t even consult my diagram. I thought my diagram had no answers, and it did.

I got an idea last night. I mentioned before about writing notes on each chart. But I got an idea to do that a little differently.

When I say writing notes on the chart, it’s just a text box. It’s really the same thing as what I would write in my spreadsheet. But now, I think I wanna try detailing what is happening. If a trend is losing momentum, draw where I think that’s happening. If there is a support or resistance area, draw the line and label it if necessary.

Then maybe I can even write instructions for what I should do next. ¨If price breaks this support, go long¨ or whatever it could be.

Hopefully, this will help me follow the strategy and not deviate from the plan.

But a problem I think I have is that when I see a big candle (for example), I’ll think ¨wow, price is going that direction now? I guess I was wrong and I should jump on that trend.¨

However, my strategy tells me to hold. My greed and FOMO is so desperate that I think my strategy is wrong, so I reverse my position. Then, the next day, I see that price reversed again, and is going in my original direction.

So, that’s how I end up doing the panic dance. Buy, sell, buy.

I’ll try it this week and see how it goes.

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I will say that I’m grateful for one thing: I’m not constantly changing my strategy. I may add small things to help me apply the strategy or something like that.

But I’m not removing steps, then adding them back. So, that part, I’m grateful for.

The rest is up to me.

It’s just so funny how easily a trader can ruin a profitable strategy.

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I’ve done backtesting; I’ve added the necessary steps to my diagram.

At the moment, I’m not sure what else I should be doing in order to study. Well, for one, I could add a few more sample screen shots to some of the diagram examples.

But, what I started doing was I analyzed a consolidation area, and I labeled where all the trades should be according to my strategy.

I’m trying to act out each trade, and take notes about how I WOULD feel if I were trying to trade that consolidation zone. Would I take each trade as I’m supposed to? How would I feel? Why would I buy when the strategy says I should sell?

I’m not sure if it’ll be productive in the end, but it’s something to help me explore my emotions when trading. I’m listing how I would feel, what the problem is, and how to fix it. The solution is usually going to be ¨follow the strategy¨ but that’s too vague. So, I want to explore the problem, and how to manage my disbelief.

I’ll swear that a pair is about to go up, so I’ll close my sell position and go long, and find out the next day that I was right in the first place and the strategy says I should have stayed short.

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I’m still doing my emotional trade analysis. Almost done.

I took a look at GBP/AUD on D1 and it’s retracing bullish right now. My strategy said to go long on that first green retracement candle, but what did I do instead?

Take a guess…go on…

Give up? Well, I did the opposite. I didn’t even check my diagram. I assumed I knew what I was doing, and I went short.

I’ve had an idea over a month ago that I should reduce my pairs down to one–I should trade just one pair.

I’ve been fighting this the whole time. ¨I don’t need to do that. I can handle it.¨ Well, apparently not.

I think I need to just focus on one pair and just do one thing exactly as the diagram says. I could do two, I think. No, no. Just try one pair for a week.

It’s not about making money. It’s about freeing my mind of the burden from other pairs. Just make my mind free enough to focus on just one thing and follow the diagram properly.

If I can do that for one pair, then, I can move up to two.

Eventually, I want to work my way back up to watching 30 pairs. Big money! Big money!

But I have to re-train my mind, first.

You wanna know another big reason why I didn’t want to reduce my pairs to just one?

Because I didn’t know what else I would do with my remaining trading time!

It sounds so ridiculous, doesn’t it?

I can go do anything I want! Of course, I still have diagram work to do, and chart analysis to do. So, I have things to do. I just didn’t want to accept that reducing myself to just one pair was the right thing to do.

The market has humbled me, yet again.

I did an analysis of a consolidation zone of GBP/AUD, then looked at all of the trades I SHOULD take according to the strategy.

I pretended that I was trading it live and listed all the mistakes I would make based on how I’ve been trading. I listed the emotion (meaning how I would be feeling at that time of taking that trade), the problem, and the solution.

The problem and solution usually was followed by ¨ignored the strategy¨ and ¨follow the strategy´´, respectively. Those are quite vague. So, I’ll share the words and sentences that stood out most.

I’d expect
strategy says
I don’t feel in control
I’d definitely be in denial
I’d feel confused and forget to check
trying to figure out what each candle means
not every candle has meaning
just wait
Losing does not mean to reverse the position and abandon the strategy
paranoid that price is about to take off and I’d miss out
I could place a straddle on the outside of the consolidation
decide based on the signal what is MOST LIKELY to happen next
caught up in my FOMO
probably be totally confused and think sitting out is the best option
ignore how it bounced the same R level, and go long
probably get too distracted with the previous profitable trade

I forgot
Desperation makes me HOPE that the trend goes that way

Base trade direction on signals
TRUST the strategy. The thinking is already there.
blindly following the strategy
label the price action as consolidation, retracement, or reversal
Don’t be lazy

What stands out the most for me is:
I don’t feel in control
Desperation makes me HOPE that the trend goes that way
blindly follow the strategy

When I said ¨I don’t feel in control´´ I meant in reference to when and how I want to take trades vs what the chart is telling me. I suppose this refers to a previous post when I said I should be riding sidecar; not trying to lead. The market gives me clues and I should follow them instead of just being hopeful.

I did it again today. I ignored my strategy. I didn’t consult my diagram.

The pair has been retracing for 3 days. I thought, “well, let me just jump in late and see what happens in case continues up.”

I also had another voice in my head saying “go short because the retracement is over.”

Of course I go long. I check the chart a little later and price went down and blasted thru my stop.

I checked my diagram now and the first example chart for this trade was exactly the same as this trade, and the diagram actually has a warning that retracements could last 1-3 days. If I followed that, I wouod have traded it PERFECTLY.

But I didn’t.

I have a real problem. Even with one pair to trade, I still don’t check my diagram before placing a trade.

Time to pick up the Disciplined Trader again.