Wednesday, April 18, 2007

Update and favorite blogs

I'm busy on my other job so no trading this and next week for me. Break is good thing.

Funny thing is that while I haven't time for trading I need my daily fix of trading related blogs. The favorite ones are listed here. I really like their trading and blogging style. There are similarities and differences in them and they are just great and valuable resources.

Dinosaur Trader
An NYSE Scalper's Tale
Trader ZBS
Boogster's Blog
Evolution of a Trader
The Chart Strategist

Those seven are a must for me daily. On my blogroll there is much more of them, but no time to read lately.

Friday, April 13, 2007

Brief self talk therapy about stops, humiliation and shame

Making mistake is the worse thing.

Other traders also look ashamed and humiliated with their stops and loses. If you want to trade you can count on feelings of humiliation and shame because you are making mistakes. Every losing trade is mistake in your value system and because of them you feel a shame. Trading is shameful profession. Maybe you will be so ashamed and humiliated with losers bigger and numerous than your gains and you will just lose. If you want to trade just accept it all. Be ashamed, be humiliated, just feel it. Accept those feeling and trade, take stops and lose.

It's easier to accept feelings than to change value system that you are raised in that mistakes are bad. Yes they are bad, but the worse thing that can happen to you with making mistakes, losing are those two feelings. Just feel them, accept them and move on.

Averaging gone bad

First of all break through big number doesn't always mean that there will be fast reaction back, so first trade is mediocre. But action that followed was simply bad. Averaging and more averaging well this is how it looks. I had a chance to go out on b/e on that tail after third trade, but I was thinking it's reversing I will stick around. When you average it's hard to just get out of it all because you look ridiculous, why than you started averaging in the first place. As price goes up, everything looks like a top so you add. Fortunately audusd is slow mover so the risk was not as big as it could be in some other pair.
In the morning I was wiser and took -25 stop.
Trading can really expose debilitating tendencies in a person and it's not pretty to look at.
I'm glad that I share this in my blog because it's humiliating to do so, I think that is a good medicine for it.

Thursday, April 12, 2007

Disappointed in myself

I really wanted to stay in this trade +10 gain or -10 loss. But it was 20 minutes of nothing and I got out. I'm angry because I'm disappointing myself by not sticking with my beliefs, but fear of a pain of a loss is still bigger than negative emotion of disappointment. Until that is so results will remain the same.

Wednesday, April 11, 2007

Trendline break

Drawing a trendline and plan to short it on a break in this example is too fast for scalping. It could only be worth on 5min t/f as some kind of swing trade position.
No time for a reaction and good entry.


I made profit but in a wrong way today. I was fighting the trend, averaging down, over trading. I could lose much more than I made. It is usual way how I put myself down for a few months worth of profit. Every time it starts to happening I'm disappointed and confused. I'm thinking, isn't this over, I don't do that any more. But I do. Lucky circumstance was that I knew about real resistance at 820 in gbpusd so it wasn't so blind. I don't like any more to watch the price creep up and my loss getting bigger waiting for reversal.
How is that I'm not afraid to make such big positions and open myself for a big loss and yesterday I was afraid of holding position because I could loose on it 10 pips?

Good news is that I was near buying it at 770 but I didn't, it's improvement.
On this little short all was still ok, position didn't fall so I exited. +1All three next positions were in my regular size so it means I was loosing 3 times as big and I was adding to a loss. Maybe situation like this when I get reward for bad trading are reason why I do it next time. +6+12+24 = +42

If I know about a resistance at 820 better thing would be to wait for it not start shorting 20 pips lower, but fear of missing out kicks in. This fear based trading is harder and harder to do.

Around a top I put in this gbpjpy short because it's fast pair I was probably angry because at 8:50 I was near shorting it at 236 but I didn't. So I was watching 20 something pips move in 4 minutes. +18

Move down was fast and I didn't want to risk fast reaction back up that sometimes happen so I exited all.

+61 pip of bad trading.

Tuesday, April 10, 2007


I'm frustrated with second trade that I got out so early. I was scared by euro going down in same time so I run for exit. +8Worse thing is that I didn't recognize or used upside bias that was in play for few hours.

Friday, April 6, 2007

Gaining confidence with hard stops

I'm thinking about putting more importance on hard stops. If I have strictly defined stops I will gain one psychological advantage. I will gain confidence in myself in trading. It's like that for some people you know you can count on that they will do as they said, but for some you don't. They sometimes don't deliver as promised, so in advance you can't count on them. So I'm thinking if I have habit of hard, totally predefined stops I will gain indirectly thro time confidence in myself that I'm the person that go out on s stop no matter what.
Tactically it's good in some situations to give position some little more room, because you see that price will probably revert. But than I always do that. From situation to situation I judge subjectively what's the best price to get out on a stop while I'm in the trade. With that in the long run I lose psychological advantage of trusting myself in every situation.
If I don't have predefined stop maybe deep inside me I don't know will I ever get out of a loosing trade. Or I will stay in until got totally wiped out. Consciously you know you will get out, but unconsciously you are afraid of yourself and your reactions, or lack of them. That fear is not so illogical as I had experience of several situations where with moving stops and averaging down I made catastrophic damage to my accounts p&l. In that way I made damage to my confidence also. So now I got to rebuild it. It's not just decision. Confidence can only be rebuild by observing right actions. So this is a way in which I get to trust "trader me" that he won't get a sleep by the wheel and drive us both to financial abyss.

Maybe through time and trust in myself, which is totally unconscious category, I will be more open to trades that I'm now not comfortable enough to take. Maybe I will not need comfort, but just take the trade and know that I can only lose amount predefined by stop. Averaging down and changing stops could with that be eliminated.
Why I change stops or average? Mostly it's done in trades that are counting on some kind of imminent reversal. But those trades are not so great in the first place to take. They are the one in which bottom or top is picked and that is losers game. The problem is that they are for me the most comfortable. So if I develop my hard stop discipline. Than trust it by repetition through time, I will enter other "not comfortable" trades. Trades that I want to enter and see them but they definitely don't feel good to risk in them.

So intention is to get comfortable taking stops and with it get relaxed in my trading. You can't be good in anything if you are in convulsion and not relaxed. Main thing for being relaxed is being confident in the first place. With being more relaxed you get more success, with more success there is more confidence. So positive reaffirming circle is closed.

Wednesday, April 4, 2007

First week of April

I'm not in trading mood lately, but I had some trades mostly scalps just to satisfy my need to have a trade.

But first let me share little frustration about scalp trades that go away in positive direction. When I see that I got to ask myself wouldn't it be wise to devote some energy and try to capitalise on them sometimes, develop some strategy around them and get some 100+ pips profits.
This is some "false b/o" scalp try that didn't give immediate results. +1 pip.

I'm thinking that maybe regular size of 5X leverage is to big for some trades and that I hesitate much and skip a lot of trades because of it. So here I tried to go in with half of position but I add other half quickly.
Idea was that resistance from the day before will kick in at about 740. Fall stopped at 750 and on test I entered.
For long time there was no action, and for me to stay in is positive because I didn't get scared which I usually do. I was thinking this trade will have some closure and my intention is to see what will it be. So I didn't mind if trade is a loser because the goal for me in this trade was to see how will it end and not to have a gain versus a loss.
It popped up in the end and I gave it a room, but I had to go away from the screen and 5 minutes was enough for this trade to go up if it wanted. +5 pips.

This is a sweet spot trade for me shorting strong uptrend on it's exhaustion highs. I just came home and was in a mood to trade. Not a very good reason to trade, nor a trade to make. +2+2= +4 pips.