I’m thinking about one of my current trades, and the PA is kinda ranging/doing something weird.
I’m trying to understand what I should do. But I don’t understand why everything seems so clear in my backtests, yet so difficult in my forwardtests.
And I realised that in the backtests I can already see what I should do. When I draw a support line in my backtests, I can already see where price retested. When I see a clue, I can already see the confirmation.
In the live market, I can’t see the retest. In the backtest, there’s usually a clue, then a confirmation signal later.
In the live market, I can’t see what confirmation signal I’m waiting for, and that creates confusion/anxiety for me.
When I draw my S/R in the live market, I just have to wait. Instead of forcing trades, just be patient…it’s coming. And if I’m wrong and miss it…it’s ok, there’s more trades coming.
I’ve collected about 31 chart samples. I didn’t get to include any major pair samples. But, I don’t even know if it matters because I see the same ideas in each chart.
So, perhaps it’s enough already.
Next, I have to think about what kind of analysis do I want to do. I’d like to examine the overall trend pattern. But also: entry signal, retest, retracement(s), and exit signals.
I ended up collecting 47 charts, so I figured I may as well just go for an even 50. With 50, it’ll be easier to calculate some percentages.
A few of them are consolidations, some are trends that started to reverse, but actually just continued going. Those are tricky. But there are always clue. Well, almost always.
There are clues about 95% of the time. There are some trades that my strategy simply doesn’t apply.
There was one trade that was consolidating, and after entering it took about a month and a half before it got stopped out.
I could say it was waste, but not so. It’s simply a matter of probabilities. There’s no way to know which trade will end in profit or not. Any trade could potentially be a waste, if that’s the case. But I shouldn’t cancel any one of them because any one of them could be profitable.
Studying some chart and I think I underestimated the demand for patience. Some signals, I could be waiting two weeks to find out if it was valid or not. One trade was over two months! Waiting two months because price was consolidating…that’s a long time.
I often get confused during those two weeks and I’ll start chasing candles. Buy, sell, buy, sell; when in reality, it should have just been one trade.
No wonder I take so many bad trades. I’m substituting patience with trading!
Studying more charts has taught me that waiting a signal really could take months.
Not every time, but often it could be at least a week.
I put blue arrows for trades I would have liked to take, but decided not to. Man, so many of those were wrong. I’m becoming less of an impulsive trader. But sometimes, I still try jumping in when price is already trending and I get stopped out.
But for some reason, only now as I’m analysing charts do I realise how impatient I am. I have to be waaaay more patient.
Congratulations, dushimes! To more green months ahead!
This is something I’ve also been struggling with. But for you, seeing your progress, I’m sure it won’t be long before you really become more patient and profitable! I’ll be cheering for you then. Hahaha.
I wanna take some time and analyse my trading errors. I don’t check on my trades during the day, so, I’m gonna wait for the weekend to look at my mistakes, and compare them with the ideal trades that I should have taken.
Friday might be a good day to stock up on some of my favourite pork rinds. hahaha
I didn’t do anything really. Just looking at my open positions, and looking for any obvious entries.
I’ve been doing some analysis of my chart samples. Honestly, I think I feel more confused.
I look at the charts and I think my mind is constantly going back and forth between fear, greed, and FOMO. I see all kinds of moves that I wish I had taken, or even moves that looked good but were kinda tricky.
For example, in my strategy, trading retracements are tricky and jumping in when the trend resumes could require getting stopped out 4 times. But I’m realising that those are the times when there’s no actual signal.
I equate that to trying to catch coins dancing around in a blender. You’re putting your hand in, trying to grab some coins, meanwhile your fingers are getting diced up.
I’m starting to ramble.
I just need to take some time, keep analysing my sample charts, perhaps even just walk thru my strategy on some back charts and take some notes.
I think my biggest problem is that I get lost about which direction price I should expect price to go. That will determine if I take the bear signal or the bull signal. Sometimes, they’re right next to each other. And that’s when I get completely lost, and I start switching from sell to buy, bull to sell, then back again.
I need to relax, and just keep working thru my strategy, and try to emulate it in the forward tests. And I should keep in mind that I might have to wait two weeks after taking a signal to see if it’s valid.
Sometimes, I get caught up in these little movements, and I miss the overall trend.
For example, I’ll catch a nice entry for a long-term trend. I hold or a week, then it starts retracing, and I panic and switch direction. Then, when price resumes the major trend, I try to get back in and I start taking losses. In that case, I shouldn’t have panicked during the retracement.
I saw some signs today that I didn’t feel very confident about. I was really confused. One sign in particular was particularly attractive, but I doubted its validity, so I didn’t take it.
But it just got me thinking that maybe I should take some time to reevaluate my entry/exit signals, and remind myself which ones to avoid as well.
I’m wondering why I’m feeling so confused about my entries.
Perhaps, I’m not waiting long enough for the correct signals, then when it ends in a loss I don’t know where to put the blame.
My desperation makes me jump in, and perhaps there is no desperation post-trade, so I forget why I took the trade. My desperation rationalizes the entry.
That might be the disconnection between pre-trade motive, and post-trade question.
I’m looking at a recent AUD/CHF trade, and based on my strategy, it was a really easy trade. I’m in it now, but I should have gotten in a long time ago, and just let it ride. It’s so easy, and I’m just sitting here getting angry at myself for missing out on the SIMPLEST trade
It would have been a homerun trade. I’m not even talking about betting the farm. I’m just talking about a normal trade. It would have been a beautiful trade.
And all I can think about is ¨what the f*ck was I thinking when that happened? why WOULDN’T I have taken such an easy trade?¨
Because of doubt. I was scared of the loss. I was so scared that I doubted the signal.
After I cool off, I have to think about the fear that’s distorting my strategy and my judgement.
Ok, I just took another look. To be fair, the entry signal occured at the end of a Friday. So, that means when I look at the chart on Monday, I’ve already missed it. I’ll check later if I still jumped in at that time.
But still, there are plenty other trades just like this one that I could have taken the signal but didn’t. So, I can’t let myself off the hook.
I got an idea that might help me with my impulsive trading. I’m thinking of abstaining from trading for a week. I’ll still check on all my open trades, perhaps close if applicable.
But I won’t open any trades, unless it’s an easy, super obvious trade that clearly fits my strategy.
But, that wouldn’t really be abstaining, would it? I’m not sure how that’ll work. The goal is to help my brain understand more patience for the right signals.
I saw a short trade that I was thinking of taking, but I wasn’t sure. I was scared to take the loss.
It’s ok to not be sure. I’m never going to be SURE. I just have to know it’s worth the risk. That’s all. But when I take so many bad setups, even the good ones are associated with the pain of losing.
The good part is that I saw it. That’s great. To be honest, that’s really good. I’m glad about that. That means I’m so close to better trades. The problem is acting. That’s a big step, but I’m heading in the right direction.
If I can’t see it, and don’t understand the entry signal, then that’s a different situation. Of course there are times I feel lost. but other times I don’t
If I just did nothing when feeling lost, and took this one short trade, I’d be building up my account right now, instead of shrinking it.
Ok, my trading setups are like dogs. I’ve gotten bitten by so many bad dogs, that when I see a good dog, my fear makes me think all dogs are gonna bite me. So, I start acting defensive around all dogs.
Meanwhile, had I paid attention and been selective about which dogs I avoid, I could have had a lot of fun playing with doggies!
The “squirrel” syndrome?
I am sure this is a very common situation, I caught myself doing it on the US30 this week. It is symptomatic of erratic and volatile price action which is often spurred by uncertainty in the fundamentals underlying markets.
I would suggest we have had exactly that situation all this winter, primarily driven by inflation/recession fears matched with hawkish central bank interest rate policies.
Do you use multiple timeframes in your analysis/set-ups? E.g. a longer TF for identifying which way is the predominent underlying trend direction or if there is a trend at all? And then a shorter TF for identifying trade entries/exits and TP/SL levels?
This is can done on many levels e.g. weekly/daily; daily/4H; 4H/1H; 1H/15m; even 15m/5m.
Which combination to use can be based on the overall assessment of markets. For example, in the current climate of uncertainty, rapid change, and erratic markets, I prefer 4H/1H rather than the longer term TF pairs.
You know what? At first, I didn’t, then I did, and now I don’t again. This is just my strategy evolving. I haven’t felt the need to step back to W1.
My problem is identifying the most recent signal. I have to identify if the most recent signal is a retracement signal or a reversal signal. This will help me determine if price is pulling back to its most recent signal (and presenting a cheaper entry) or continuing in its original direction.
The reason I get often get confused is because I WANT to see price a certain way and it clouds my judgement. Let’s say price goes bullish, then retraces bearish, then retraces bearish again. So, is price bearish? Or still bullish?
How about if it does all of that two times? It could happen over the course of two weeks. Well, price looked bullish, but now it retraced lower twice. You go short, then price skyrockets to the moon.
Now, I’ll get caught up in trying to figure out which way to trade. I’ll go short, long, short, long, short.
Had I just held my long position, and did NOTHING, I’d be in the green with less stress during that random walk nonsense.
But I think I’m gonna start labeling my charts a little bit differently, so that there’s less thinking involved. I label what’s happening, and I leave it like that until the next signal.
Such a label will tell me to wait for a bullish or bearish signal.
It is sometimes suggested that the more intelligent a person is the harder it is for them to be a trader. I don’t think that is true but there is a grain of sense in it. We can often rely too much on our own thinking and opinions even when the chart says something different!
One of the most formative statements affecting my early trading was a very simple phrase:
“Trade what you see”
Only four words. But it really spoke to me, in fact it shouted at me! It is only human to think about the markets and what is moving them, and why, and how far, etc. And then to decide what to do based on our own views of what the market should be doing - But at the same time we are studying price on a chart!
So what it comes down to is that I am thinking one thing - but the chart is showing me what the entire rest of the trading community is doing. Then the realisation hits home, “What possible use is my own opinion compared with the entire rest of the participants in the market?” And since then I have trained myself to only see what there is to be seen and not to try and process it and analyse it and decide if it is “right” or “wrong” - it is what it is and I either join it or stay out.
The point underlying multiple TFs is that they are not different. They contain precisely the same price data, but they present it in different chunks. The problem comes in remembering that a weekly chart or a daily chart should then only be reconsidered at the close of the week or day. But we tend to watch it intraday and apply what we see under the time microscopes of real-time 4h/1h/15m/current - and then apply it to the longer term chart view. But those shorter term moves often just get swallowed up into the weekly/daily candle and are no longer even visible at the end of their candle.
I think there is one word that can be quite distracting in trading: Trend.
We often seek and talk about “trends” but in fact it is claimed that markets trend only about 20% of their time. So what exactly is a “trend”? And when we ponder the nature of a trend then we need to also clarify what we mean by a reversal or a retracement.
A trend is not created purely by technical trading. It is the result of a concrete shift in underlying fundamentals such as interest rates, government policies, commercial supply and demand, etc. Therefore it is easy to see that a genuine “trend” is unlikely to change in just a few days, or even a few weeks.
So what we “see” in the markets are just corks bobbing around on the water responding to countless varying pressures in all directions. Our job is only to see the start of a “bob” and estimate if it might continue far enough to gain from it.
To do this, we need to build a chart containing all (and only) the analytical elements that provide this information. Not too much, not too little. We need to decide what we need to know in order to read what the chart is saying, and then decide what tools will give us this info.
Having done that, we need to recognise that nothing works all the time and therefore we need to build our risk/money management parameters to ensure that the fakes are cheap and the genuine moves generously rewarding.
Trade what your chart is telling you - but trust that what your chart is telling you is tradeable.
I am not directing these comments directly at you @dushimes, it is just that your comments inspire so many general thoughts!
But I would suggest to you that you run a demo account alongside your live account and place every trade that your chart analysis is offering and monitor how they work out. Confidence and trust in our methods and set-ups and effective risk/money management is really critical to success. If it is not there with small positions, how will trading ever grow into sizeable significance?
I’m already in demo! haha. I’m grateful I went back to demo. My money would have been gone if I didn’t!
And actually, I do what you’re talking about. With blue arrows I mark the candles I would like to trade, but decide not to. I mark it so I can see what would have happened if I took it.
Those are more of the impulsive trades. They don’t work out very well. There was one pair, for the past weeks there were about 7 or 8 blue arrows and they were ALL wrong.
I had those very words plastered throughout my spreadsheet. After a while, I didn’t even read it. It was right in front of me, written between every few lines, repeatedly. And after a week or so, I didn’t even notice it anymore. I think it’s a good method, but I need another way to put it in my face where I can’t help but see it and think about it.
Now that is a critical observation!! How did you analyse it? Was it the strategy that gave a string of failed trades? Or was it the TP/SL in the wrong position? Or was it your interpretation of the signal? Are your signals clear and mechanical or are they grey and subject to personal interpretation?
Discretionary trading always means considering surrounding factors to justify the trade entry and size, but I think the actual structure of the signal itself should be a clear yes/no.
What is the basis of your strategy? Is it PA-type S/R and trendllines or indicators or both?
To more green months ahead! 
But for you, seeing your progress, I’m sure it won’t be long before you really become more patient and profitable! 
