Went Live And Broke Every Rule In The Book!

Hi Everybody,
I went live two weeks ago and was doing real well. I followed my system and mm rules and thought I couldn’t do any wrong. I had some winners and some losers. With my system and mm rules the losers didn’t matter. I have been doing well. Then the perfect setup came around. It looked juicy. Then it went against me. Instead of letting it go, I chuncked more money at it. It ended bad. Instead of learning my lesson, I thought “I need to make this back quick”. So I increased the trade sizes and started trading flutter charts. I think we all know the outcome.

I am writing my rules down now. They are no longer in my head but in black and white. They will be my trading bible. I will not sin again… I hope.

My account took a 15% blow because of this foolishnes.

For all fellow noobs out there. Techs and fundies are only half the story. Trade your system, rules, and mm. There are no alternatives to well disciplined psychological trading.

Good news is it should get better from here on out… good luck!

Here is my system and rules. It works when I follow it. Any feedback good or bad will be most gladly accepted.

Trading System And Rules…

– Only follow longer time frame trends on short time frames using 15 min charts.

– Only trade the direction of the trend.

– A valid entry will be when price is trading above/below the 5 and 10 moving averages
with a previous bullish/bearish cross and the ma’s are pointed in trend direction.

– An entry is not valid if the trend looks to be reversing by the rsi or macd showing
extreme readings.

– If a trend is up, RSI will have to be above 50. If the trend is down, RSI will have
to be below 50.

– If the charts looked fluttered, then no entries are valid.

– Entries caused by recent news are not valid.

– All entries will be stopped when 1% of account size is lost. The 1% can’t exceed 20 pips and entries
need 20 pips breathing room. So all stops will be 20 pips with lot sizes adjusted to meet the 1% requirement.

– All valid entries will be traded.

– Three consecutive bad trades will terminate the day. The market is not in favor of
the system that day.

– Profits will ride until a take profit point has been reached either by system reversal or
price has moved way past its range.

– The system will not be traded on the Asian session.

– No valid entries and sitting in cash while going to Babypips to goof off is a valid alternative entry.

sounds good to me! If you can prove it historically and you adhere to those rules (which appear to be VERY good rules) go for it!

Thanks daedalus.

I have demo traded the system for two months with great results (eur/usd) (usd/jpy) was like taking candy from a baby. Even though a monkey could have traded those two the past few months and made money. I have also manually backtested the system with all positive results.
I don’t use automated back testing because it will trade the system around news and Asian sessions. Now that I am live I have done real well increasing my account size 3%. That all ended when I got greedy, desperate, and bored. I’m glad my account is small anyway. I didn’t want to use a lot of money first going live. So I just consider my graduation to live as my second demo account. When I can be disciplined enough to be profitable with this one.
I will make the ultimate graduation to larger amounts of money.

Everybody has an off day here and there… today I got NAILED. Pure mismanagement and emotion took over. And I consider myself to follow rules very well and to be aware of the dangers of mismanagement. But regardless you WILL have one day that just falls apart and you do everything wrong - its part of trading.

Today I took a signal in the S&P before 10AM EST. Thats against my rules - and it lost. Thats why I don’t trade before a set time everyday in that market. Mistake 1.

I passed on the two valid signals I got because I got greedy on my entry price and ended up having both moves swing down a pass me by. I missed out on 600.00/contract haggling over a 12.50 difference in my fills. Mistake 2 & 3.

Took a signal in the afternoon now aching to make back my money and show the market what was what I bent my rules to get an entry. And it stopped out. Mistake 4.

And here is where I did something truly shameful. I was down 250/contract going into and I ended up buying the market. The TREND WAS DOWN. And I bought the market in a desperate attempt to revenge trade. Result? I’m now down 312/contract! I’m freaking pissed off at myself. Mistake 5.

Lesson is this: Pros all have “off” days. Adhering to rules is essential for reducing those off days and increasing your “on” days. You won’t be perfect but by following your rules you can rationalize every loss. Every loss (or lack of a win) today was MY FAULT. Not my system, not my rules. Its all on me. And there isn’t to much else in life that can make you feel worse than knowing that.

Tomorrow i’m gonna have my **** back together!

It looks like anyone with drive and a tiny bit of intelligence can learn to trade the techs and fundies. All succussful systems don’t seem to be very different than any other with a few tweeks and peeks. It looks like all of the training and research in the world will not amount to a hill of beans if rules are not followed. I hope I have learned my lesson for good today. I hope you have too.

Mistake #6

How so???

I think that was meant to be funny…to hard to resist :smiley: :smiley:

Did you have a better day?

I followed the rules today.
4 winners, 1 loser

No sweaty palms, panic, greed, or revenge.

I like that style of trading much better.

Yup. Followed them to a T and ended up +287/contract. Not quite all I lost yesterday, but today was a loaded, hard day to trade in the indicies.

I agree - this style of trading is MUCH better!

Glad to hear you did well too!

I didn’t recover my losses either. The only way I could recover them in one day is to trade stupid again like I did yesterday. So I will be happy to be in the red for now.


Great Rules … I added a couple to my plan. I really ‘screwed the pooch’ yesterday; I seem to be struggling with Rules #2 & #3; I seem to want to trade the (MA5/MA10) crossover candle, but I seem to be getting faked out. so I been trying to definitely WAIT for the next candle to valid – does this sound right?? Additionally, RSI & MacD change (somewhat) on the next candle … and it all went the ****?? I guess I soulb be glad I’m demo’ing only right now

Hi Jazz,
One thing I didn’t add to my rules posted here was the price action on the charts and candles. That is something that is hard to put in black and white because it is used for a case by case bases. If the price range is to tight, I won’t trade it. If I see the upside on a trade is only 10 - 15 pips by price range, why risk it. Also I use the price actions of candles. I don’t look for classic bullish, bearish, continue patterns. I just read the body’s and shadows to see the selling or buying pressure. If you use anything that I post, please demo it yourself and tweak it to your liking. What works for me may not work for someone else. Or it just might be what you are looking for.

I am far, far away from being a pro.


So are you saying 10-15 pips from a Time range - say from one MA crossover to the the next MA crossover? or just ‘each’ candle trading a Hi-Lo range of 10 pips? I have been trying to read candles i.e. Hammer, Star, Hanging man to ID tops, bottoms, reversals. Yeah, I liked your rule of, “3-consecutive bad trades …” and MM rule of “…1% can’t exceed 20pips…” Also, when do you trade the Yen and Euro? I know you have a rule for not trading during asia time frame.

Hey mytwo,

I just noticed GBP/USD trading in a tight price range and also now shows MA5 crossing above MA10 (see attached) I think this must be what you were telling me … I have ‘bite’ on this set up …and LOST … but it seems so tempting that a ‘breakout must be comong’…:eek: I’l use this rule too!

Hi Jazz,
I trade the yen and euro early and try to dodge news. If a trend will start early and hold, it will normally last until around 12 eastern. After 12 I look for a ranging market. In a ranging market I won’t use the system if I only see an upside before a reversal at only 15 pips or so. Why risk 20 pips if you think price might only move 15 your direction. So if the market will range I will trade using a ranging method not the trending one posted. Often what looks like a range will be a snake in the grass choppy market. That will eat your lunch. The dollar keeps trying to do a short term correction even though the fundamentals are still bad. The smart money is on the sidelines right now. That is causing low volume and choppy markets. I used the euro and yen in the example because for two months they only seemed to do one thing ( hate on the dollar ). That seems to be temporarily over for right now. Will it come back or is this a long term reversal? If I could only predict the future, I would be the forex king. Over confident but mostly wrong predictions are only for the talking heads on tv.

Hey mytwo,

You stated, “…if I only see an upside before a reversal at only 15 pips or so…” This setup seems to be part of my issues I need to learn to recognize and overcome, because I’ll set TP at 20-pip and the a reversal happens before my TP…Being a pip-NUB ([U]N[/U]ew [U]U[/U]ntrained [U]B[/U]ody) myself, these are the lessons I still need to learn… I’ve been demo’ing with the GBP/USD only, after London Opens. So do you think 8am-noon is better time to trade? Hey have a good holiday wkend…

Hi Jazz,
Around 8 - 9 watching out for news. I will normally spend about 30 mins to an hour before reviewing all fundamentals for the day.

Careful that most news is released around 8 - 8:30.
Some at 10 and when the Fed or the EU speak they can
mess up a perfectly good trading day.

After 12 I look for more ranges and not trends.

Today was boring but I am up. Better than down!

You get to trade the opening of the London session?
If so, have you tried trading the direction of the London breakouts for GPB/USD. I would like to try that but I have to sleep sometime.