I started trading forex about 4 years ago.
After burn out two time my account, I realized I was gambling.
now I started trading again 5 months ago and fund my account with small amount of money, (I have a day time job which giving me a lot of free time to keep an eye on my positions but not to manage it, like to rethink of the positions or redo the analysis on the market .) The first month I had a return of about 16% return of my account. Then the following months with no profit at all ( up and down about 3 time 10% profit to about 8% loss.) The last month ended with 17% loss ( I had take away the gained each month if there is any.so the loss does not included the first month gain, so that would make me back to the point where I started.).
I had doing my trading journal and found my mistakes, for that 5 months I’ve been making less trade less trade each month, I had gain my experiences to identify some bad trades and cut the losses and eliminate my revenge trades, and careless trades(with no proper analysis solely on feelings). but also keep fear money on my hands that miss a lot of good trade and take the profits too early. The main cause for my account ended with 17% loss is that risk too much for some bad trade and over sized of positions. Now I had halted my trading because I had too many things confused me.
Should I trade smaller time frame like 30min or smaller solely on technical basis ( I only had about 3 hours a day to seat there and manage my position. )
Should I focus on bigger time frame based on technical and fundamental combined. ( this would allow me sleep better and I don’t have to be in front of computer all the time. )
How can I fix and control my fear to make the proper productive trades. (not to miss or get out too early other than cutting losses on some bad positions) cause the market is really tricky sometimes.
I have set a goal that I have to generate 5% gain each month so I can gain my self confidence and to have no doubt that I am in the right business. if I choose option 2, I may not able to achieve my goal. But my time is very limited, (I was thinking to sacrifice 3 or 4 hours of my sleeping time to trade the smaller time frame so that I’ll be able to control my position by managing it. but I always fell asleep cause of tiredness. )
I am very passionate by trading, I have give in my last 15 ys to get close to this carrier not properly educated(until now thanks to the baby pips school I am now kind of an educated trader.) but I am basically thinking about it every day.
I am thinking of until I gain enough my self-confidence like 8 to 20 months continuing gained I’ll jump in to the full time. Then the question now is how much to start with if I go full time(I only need 4 thousands dollars that would cover my personal expenses monthly).
Some questions might seem stupid and the English might not be right but I’ve seen a lot of kind people here so I ask anyway haha!
any advice would be greatly appreciated
Use the 4 hour chart, hence be sure to know what is the pair trend by viewing daily and weekly charts
i have a similar senario to yours in losses, hence using enough stop loss, setting more resonable target based on pivot,moving averages or fibo can help you too
I did some thinking and came up some solutions for my own questions and problems, what I need to do just apply these solutions to my daily routine and diligently enforce them.(hopefully I'll get a better trading record out of them this time)
Obviously I’m not ready for full-time, both financially and my trading skills. Not until I have a kind of solid record to start with, at least I don’t see it next 3 yrs.
I had just resume my trading journey this week and currently testing one of my theory based trade (fundamental trade), so far going well, I will continue to hone my skills both in technical and fundamental,
Hopefully we all get through this learning process and do what we really wanted to do
If you are thinking of trading shorter time frames in order to be able to use tighter initial stops on the same position sizes so as to reduce the risk from entry to initial stop, then the answer is an easy NO. This will only decrease your ratio of wins to losses and grind you further into drawdown.
This sounds like the right direction for the reasons you gave but also because it will reduce costs.
Smaller position sizes are the best way to reduce fear. But this also sounds like you are not decided on a specific system. You must have a preordained set of exits. You must know the circumstances that will cause you to exit the trade no matter whether that exit is with a profit or a loss. If you find yourself unable to decide between more than one system then system diversification is an option (trade multiple systems simultaneously).
Many traders run into the problem of account granularity. They would love to put on a smaller position with a wider stop but they are already putting on the minimum lot size their dealer offers. If you are running into this, consider another dealer that offers smaller position sizes such as Oanda.
I think those monthly goals prompt traders to override their own system. The market gives you what it gives you and efforts to change your trading to fit conditions that don’t profit your initial implementation will largely burn you in the long term. Love your system and stick to it without concern for those kinds of goals. Traders that depart from system every time the one they are trading goes into a period of bad performance miss the periods wherein those systems perform well. Thus they go from system to system to system taking deeper and deeper drawdowns. Pick a couple of systems and trade them courageously with small enough position sizes to survive the worst that can happen.
Now I am just a lowly guy with a gatorade at a computer, so don’t take any of this as gospel. But hopefully this gives you some ideas you may have yet to fully consider.
Thank you for taking the time go through all my questions and the thoughtful advises.
The idea of smaller position to reduce the fear is really helped and feasible. And I’ll start doing that every time time I feel dazed.
Trading smaller time frame did cause the problems you mentioned here, and the very limited-time I have also causing some miss management of the open position (let a winner run into losing trade). So I better focus on bigger time frame.
And I understand I shouldn’t focus on the return I may generate( I’ll try not to do this and I will not) but the process of my trading journey and the survival.
I currently using manually to operate every trade though every trade I have set up a stop loss( I was thinking to adopt a auto trade system to operate not sure if it is a good idea yet)
Is ATS what a trader should have?
An ATS is great no doubt. But if you don’t have that you could trade on weekly data and make updates once a week. With that, even a large number of trades can be easily managed.