Trading journal

[dushimes]

It appears that I have missed yet another trade. I didn’t even mark any support zones. It makes me wonder what in the world I’ve been looking at. What have I been doing?!

I’m not paying attention as well as I thought. So, I really have to trade less pairs. I have to go back to scratch…even before scratch. Not even walking–I have to go back to crawling…

Or maybe even go back to scooting.

The scooting equivalent in trading is just ONE pair. I’ve NEVER traded just one. I feel ridiculous trading one pair. But not as ridiculous as having a trading balance that’s been nosediving since day 1.

So, one pair it is.

After that, once I get a grip on that and can scoot, crawl and walk; then I can dance!!

DANCE TILL YOU'RE DEAD 10 HOURS

[SovoS]

@dushimes

I feel ridiculous trading one pair.

Why???
The world is full of specialists in very narrow fields. What is wrong with that?

Specialising and digging deep into the “soul” of one pair gives a much better chance of success, which equates with greater confidence, which equates with greater winnings.

Afterall, what is better, 10 lots with confidence on one pair or a worried 1 lot on 10 pairs?

In any case, one pair is already two separate currencies with separate characteristics and affected by different factors. For example, you have already discussed earlier some of the issues regarding the Yen, what then, would be so “ridiculous” about “only” studying, for example, Yen against the USD or GBP? And the same goes, whether you are just talking Technicals or also Fundamentals as well.

Or if one chose Oil or SP500, is there not enough meat on any one of those bones to keep any trader fully occupied?

But, as you say, try it - and if and when you feel you are in command of it, and consistently profitable, and still have spare brain/time capacity, take on the next one, and the next…

[dushimes]

@SovoS

Afterall, what is better, 10 lots with confidence on one pair or a worried 1 lot on 10 pairs?

That’s a great way to put it. You’re right. Because, that’s what I’ve been, pretty much. In the beginning, I was watching over 40 pairs. It doesn’t even make sense to watch that many pairs.
Now I’m watching just nine. Even that is too much if you don’t have a good grip on the steering wheel.

@SovoS

But, as you say, try it - and if and when you feel you are in command of it, and consistently profitable, and still have spare brain/time capacity, take on the next one, and the next…

Right. I have to learn to trade my strategy properly. Once I can do it correctly, sure, I can add more. One pair, two pairs, four pairs, eight pairs. But the discipline and proper strategy application must be there. Otherwise, this train is gonna derail quick.

@SovoS

if one chose Oil or SP500, is there not enough meat on any one of those bones to keep any trader fully occupied?

There certainly is! haha Besides, the goal (for me) is to spend LESS time in front of the screen–not more. I’m not looking to turn trading into a job that takes all day. Some people LOVE the screen time, but I don’t. Deep down, I’m a lazy dog.

The less screen time, the better. So, yeah, one pair isn’t bad at all, for now. It’s gonna help me get on the right track.

If I’m gonna stop going in circles, then I have to do something differently. This is a step in the right direction, I think.

@SovoS Thanks, as always!

[SovoS]

When selecting your one pair, I would suggest that you choose one where at least one of the currencies is of general interest to you. Even if one is a TA-based trader, if adds an extra dimension to one’s analysis when the asset has some real meaning to oneself.

For example, cryptocurrencies have no real underlying substance like with oil or gold and I find them incredibly boring, but other people love them. On the other hand, as a UK ex-pat, I would choose GBPUSD because I still like to follow UK events - and the USD? Well, who doesn’t follow what the US is doing!

It is also worth remembering that no one ever has made even a cent of profit from entering a trade. The only thing that determines whether you win or lose, and by how much, is where you get out! And yet exit strategies seem to be very underrated compared with the amount of energy spent of when and how to enter. Focusing more on your targets and exit strategy may also help reduce the hesitancy and reluctance with actually entering the trade

It is good to have a clear idea before you enter a trade what exactly you are looking for. Is it a fixed number of pips, or an identified zone, or an open-ended trade with a trailing stop, etc. And when that is clear then identify where you are going to get out if it fails.

And journal it! Journal the reasons as well as the levels. Journal the actual P/L per trade and cumulative. and journal whether the trade was according to your rules and if not, why not.

It might also help to imagine that you are trading someone else’s funds (like a prop firm mentality) and that you have to report on all your trades, explain and justify them, and describe the trading environment that you are operating in.

It might sound a bit silly, but build a deep pride in what you are doing. It is no small achievement to get to a consistent profitability level. Trading is quite a lonely business and often it is down to us to pat ourselves on the back, there is no one else gonna do it. So seek value in what you are doing and do it to the best of your ability and with deep commitment to see it through.

Anything that makes it seem more like a professional business with accountability is going to help with discipline and add a lot more interest - even if it is “only” one pair!

[dushimes]

@SovoS

And journal it!

I already started it. You got me thinking about it not long ago. Everyday, I update my spreadsheet, but I overwrite it–I don’t keep it.

But now, I start a new one each day. I also added a ¨thoughts of the day¨ section. But that’s just for sentiment. I also created a spreadsheet for logging trades. I tried to keep it as simple as possible. I just need the date, my reason for entry, the result, final notes, and before/after pictures.

@SovoS

It might also help to imagine that you are trading someone else’s funds (like a prop firm mentality)

Good idea. I never thought of that before.

[dushimes]

@SovoS

@dushimes

I feel ridiculous trading one pair.

Why???
The world is full of specialists in very narrow fields. What is wrong with that?

I got it. I know why. My brain is accustomed to looking at several charts. It’s like eating pizza.

My brain is accustomed to eating nine slices, and to eat just one is unfulfilling. It leaves my brain wanting more, and my brain doesn’t know what to do with that unfulfilled appetite.

¨More charts = more opportunities¨ this is what my brain thinks. It’s true, but only if you’re trading well, which I’m not. Right now, ¨more charts = more losses¨ is closer to the truth.

So, even though I wanna scope out more charts, I have to slow down my appetite, and learn to examine my ¨pizza¨ and learn to chew properly. This analogy is bad, haha.

It also feels ridiculous because I’m taking a step back. However, that doesn’t have to be a bad thing, if it helps me come back stronger.

Two steps forward, two step back. No, no. One step back, two steps forward.

Paula Abdul - Opposites Attract (Official Music Video)

[SovoS]

@dushimes

My brain is accustomed to eating nine slices, and to eat just one is unfulfilling. It leaves my brain wanting more, and my brain doesn’t know what to do with that unfulfilled appetite.

¨More charts = more opportunities¨ this is what my brain thinks. It’s true, but only if you’re trading well, which I’m not. Right now, ¨more charts = more losses¨ is closer to the truth.

So, even though I wanna scope out more charts, I have to slow down my appetite, and learn to examine my ¨pizza¨ and learn to chew properly. This analogy is bad, haha.

Actually, your analogy is right on target!

The unsatisfied hunger is only valid if you only have one piece of the same old pizza that you usually have nine pieces of (how do you divide a pizza into 9 equal pieces anyway! ).

If you order a standard old pizza and eat all nine slices you might be full but you are still left dissatisfied and looking for something more.

But if you decide to study pizza and learn to make your own then it is a very different story. You learn about the flour and the other ingredients that make up the base, You study all the various options for the toppings and what combination is the best for you and where to get the best quality supplies. You learn about baking the pizza, the type of oven, what temperature, and duration. You now know pizzas inside out. So much so that you are already pretty sure when you put it in the oven, what is going to come out, and you can’t wait to enjoy it!

And then, when your pizza is ready, it is the same size as the shop pizza, but you don’t cut it up, you eat the whole thing yourself- and you are very full and very satisfied with the result - and very proud of your achievement. It was all so worthwhile

As the sayings go: “its quality not quantity that counts” and “less is more”.

Eat well!

[dushimes]

@SovoS

(how do you divide a pizza into 9 equal pieces anyway! ).

Not a good analogy, I admit! But you saved it.

@SovoS

You now know pizzas inside out. So much so that you are already pretty sure when you put it in the oven, what is going to come out

Right! And that’s when I can open my own shop and even two locations! After that, even more locations because the process works.

Have you ever had to go back to scratch with something? You don’t have to give details of the situation, but how did it feel taking a step back?

[SovoS]

@dushimes

Have you ever had to go back to scratch with something? You don’t have to give details of the situation, but how did it feel taking a step back?

I think life is absolutely full of such situations - and the longer one lives the more there are!

But I don’t really see these as steps backwards. Rather, these are junctions or crossroads where we need to change things. These are either own decisions or imposed on us by outside circumstances.

But whenever we need to change things we find that we always carry something with us from before. So it is never a step backwards, it is simply a change in direction. Naturally, that change may initially feel negative or positive, and may also require some initial sacrifices, but either way it is a fresh start and a new opportunity - and hopefully leads to a better position than if one had continued in the old direction.

[dushimes]

I was reading about Black Wall Street.

The Devastation of Black Wall Street - JSTOR Daily

Apparently, it wasn’t necessarily a financial investment district, but more of a very financially successful district in Greenwood, Tulsa, OK in 1921.

What I found particularly interesting in this article was how a “dollar circulated 36 to 100 times and remained in Greenwood almost a year before leaving.¨

@SmallPaul @Mondeoman @tommor @ProfesorPips What’s your opinion of the relationship between the number of times a dollar circulates within a community and the strength of that community’s local economy?

This page breaks it down pretty well.

The Local Multiplier Effect

I didn’t realize this, but ¨circulation¨ (in this context) refers to how many times a dollar is spent locally. It can be between local business and local supplier or customer and local business.

So, for a dollar to circulate over 36 times (up to 100, as per the article), before leaving a particular district, that seems rather impressive. Hence, that district’s financial success. Right, or no?

Because that would mean each dollar (on average, I assume) would pass through 36-100 local businesses during the course of a year before leaving that district. As opposed to that dollar going straight to a business/supplier far away.

[tommor]

Never even considered such a concept before. If the same dollar is being spent and re-spent in the same district, doesn’t that suggest a stagnant economy with a lack of outward export and inward investment?

Like when all the members of a family are employed by the family grocery business, but the main customers of the shop are the family themselves…

[dushimes]

@tommor

If the same dollar is being spent and re-spent in the same district, doesn’t that suggest a stagnant economy with a lack of outward export and inward investment?

That’s a good point. In order for an economy (local or otherwise) to grow, it, basically, has to have more money coming in than going out, right?

Origins of Black Wall Street

Based on this article, Black Wall Street was similar to Las Vegas. It was built where there was nothing. And guess what? There was an oil boom going on, which attracted people.

More people, more customers, more business = more money.

The district’s major export was labour during the oil boom. People often worked outside of the community, earned their money, then spent it in their local community. More people kept coming, hence the demand for expansion of businesses/services/institutions.

¨Through 1910 to 1920, the population of the Greenwood district almost quadrupled to 72,000, spanning to 35 city blocks.¨

[tommor]

I am starting to see the point. But I still wonder if this metric is the most useful thing.

[dushimes]

I’m not sure either. That’s why I’m curious about it.

I mean, does that principle matter LESS today? Perhaps, what’s more important than how many times a dollar circulates, is how much money comes into a community vs how much goes out.

[SmallPaul]

@dushimes

So, for a dollar to circulate over 36 times (up to 100, as per the article), before leaving a particular district, that seems rather impressive. Hence, that district’s financial success. Right, or no?

Because that would mean each dollar (on average, I assume) would pass through 36-100 local businesses during the course of a year before leaving that district. As opposed to that dollar going straight to a business/supplier far away.

Wal-Mart and other chain stores killed that idea, it is very difficult to support a local business and keep the money within the district unless you live in an affluent or Upper middle-class neighborhood who have more locally run businesses

Now that I think about it, Black Wall Street would be considered an affluent or Upper middle-class neighborhood.

I guess you can say Wal-Mart and other chain stores were built for the Average Joe?

And for the supply chain, you be lucky to find a made-in-America product

[SmallPaul]

@dushimes

People often worked outside of the community, earned their money, then spent it in their local community. More people kept coming, hence the demand for expansion of businesses/services/institutions.

@dushimes

what’s more important than how many times a dollar circulates, is how much money comes into a community vs how much goes out.

I have seen this with Immigrant communities

[dushimes]

Yes, Black Wall Street was doing very well. There were millionaires (equivalent for that time) that came out that place. I don’t think the entire district was affluent, but there were people who got filthy rich.

To be honest, it would’ve been pretty cool if they actually had set up their own financial investment district. That could’ve changed the future of Oklahoma. Imagine the Oklahoma Stock Exchange. They could’ve rivaled Chicago’s market!

[dushimes]

@SmallPaul

I have seen this with Immigrant communities

Right. If we are Polish and live in a Polish community, then we might go to work 30 minutes away in non-Polish businesses. When we come home, we buy Polish food from our local Polish grocers, buy suits from Polish tailors, and drink at the local Polish pub where everyone speaks Polish and drinks imported Polish beer.

[SmallPaul]

@dushimes

Yes, Black Wall Street was doing very well. There were millionaires (equivalent for that time) that came out that place. I don’t think the entire district was affluent, but there were people who got filthy rich.

To be honest, it would’ve been pretty cool if they actually had set up their own financial investment district. That could’ve changed the future of Oklahoma. Imagine the Oklahoma Stock Exchange. They could’ve rivaled Chicago’s market!

unfortunately it was burned down.

[SovoS]

IMHO, näive as I am regarding economics, it is not so much a question of how frequently money circulates, rather, it depends on what the money is used for.

For example, if I spend $50 on a hair cut, car wash and a pizza, then the money still exists and has just changed ownership. But my hair, car and hunger are soon back as they were - no net gain overall.

On the other hand, if I spend $50 on some tools, then the money still exists albeit with someone else, but I now have tools worth $50 with which to create new things - a net gain across both parties.

A very simplified example, but the general principle is whether money is used to create new wealth, whether by related services or actual production, or just feeds consumption within a defined regional merry-go-round with little net gain in value.

Just a layman’s blinkered view…