Thursday, July 12, 2007

Vacation time

I'm going on three week vacation this weekend. No work, no trading, no blogging, no internet, no nothing.

Tuesday, July 10, 2007


When I started trading few years ago I was fresh from reading many beginner level trading books. In all those books an lessons the main advice was take your stops. So I decided I will not be like majority and loose by not having stops. So I started trading, taking stops. Many stops. It was typically it looked like those stops will kill me. That market so many times just take out my stop and reverse in direction of my trade.
The problem also was that I took my profits too soon, so profits was not near covering all those loses.
So first I started with opening another trade in the same moment that I took stop loss. Beginning of revenge trading. I still took my stops like I promised to myself. But soon it looked stupid. I took stop than open another trade on that level and put another stop. So it was better to just move my stop, make it bigger.
It worked sometimes and I got hooked. It looked like I can go without stops. Just move them enough and market will reverse. If you open another position on new low level break even point will come half way down. It's seductive. So averaging was born.

Now it's how I trade. Averaging, moving stops, revenge trading.
It's not trading.

I think sooner or later full circle will be made. I will again use stops no matter what like in the beginning. Difference will be that I now have first hand experience why stops have to be used.
But leaving bad habits is like leaving some drug addiction. You are leaving behind all those saved situations, when averaging, moving stops saved position from loss.
With deep inside knowledge that my trading didn't evolved to profitable, and that using stops without exception will not give me guarantee that I won't just lose again like I lose now it's hard to change.

But I think, that only by doing that I have a chance to learn to become profitable. Without stops I have no chance.

The problem is to accept the fact that I don't have guarantee that I will learn to trade profitably. Start trading, use stops and accept all loses and slow downtrend in account funds because you are learning to trade profitably.
It's hard to accept that I'm not some good profitable trader that can make 10% a month when it looks so easy. It looks easy in hindsight but reality is far from it. So it's all in accepting the reality. As long as I fool myself with some nice picture in my mind about me as a profitable trader right now I'm disconnected from reality and I can't move.

Will I start trading with stops and accept all loses that stops will give me maybe even bigger than averaging down gives me now. Or I do it latter, or never. My belief is that it's my next step that I got to take in trading.

Losing big time

It started like naive long before breakout that never came. Than no stops but averaging. Relatively small 4 positions and not to big damage about -2 %.
But than revenge trading over leveraged and loss. Totally -5.5 % about 170 pips, more pips actually because usd/chf have smaller pip size (about 200).

Well it got to happen sooner or later. You can't go averaging and doing stupid risky trades without paying for it.

The most stupid thing was that revenge trading in big size that got my 2% loss 3 times bigger.

It happened before, it will happen again until sound trading becomes my way of trading.

When I now look at the chart it raise question what was I looking it's strong downtrend. But all other averaging trades that I made in days before were saved by doing this. So there is no thinking you just average.

I lost about 4 times more in this trade than I gained in all other averaging trades from few last weeks.

I don't feel bad now. Because I know all the time that way I trade is not good. Losses like this only can help me because they stop me and make me think.It's cold shower.
This is the way majority of losers loose. So I'm just average loosing trader. Every one of them would trade different if they could, like me.

All in all it started with recklessness, than no stops, after that being married to a position (losing one) and not acknowledging new trading reality, than bad trading by averaging. Good thing was that I finally put a stop to all of that by getting out.

Second set of trades was pure gambling like I was hitting black jack in casino. That usually came when you realise how much did you lose and you don't want to acknowledge that either. Than after some time you wake up and see that it's not working and that you lost even more. You wait some time, wait. It's going in your way so you wait again. But it's strong downtrend it resumes and finally you stop all of that.

Lucky for me it's more therapeutic now to write about that than to resume losers game by more trades.
It's always funny to me how when I lose and want to regain lost I never trade new trades in direction of established trend, always against.

Monday, July 9, 2007

Forex trading 07/09/07

I got out of the first eur/usd trade because gbp/usd was spiking up fast in that moment. +2

Second eur/usd trade was quite strange. All pairs were getting stronger against usd, but eur just staled. In another words eur was getting week against all currencies except usd. At 10.30 were scheduled gbp news so I didn't wont to stay in eur/usd through it. -2

Exit of the first gbp/usd trade was at the 5min's 20ma. +10

I'm proud of the entry on the second gbp/usd trade. I chose to risk just made profits and to reshort the pair because I thought that up reaction was because of buying at 20ma and that when it stale it will fall again. Exit was not so fortunate, usd started to fall all over the pairs and I got out. Intention was to hold that trade for bigger swing. But the bigger swing didn't realized, I could get another 10 pips if I waited. +6

Thursday, July 5, 2007

Forex trading 07/05/07

It's like I'm always wrong. Today lot of averaging but it wasn't in some mad emotional mode. I was pretty conscious about it all. For all my effort I was rewarded with 1 pip of profit. I don't know where will it go now I'm out. It looks like that I'm totally out of tune with ways that market moves lately. I don't read it well.

Today it started to go down, than up. I shorted it, I thought that highs of 635 will hold and that it will head lower like it started.

There were not much action so I hit the shower, when I got back position was 20 pips in the red. I reshorted. I trade with smaller position now calculating in my habit of averaging.

Yes it's trending up, but those moves don't look like nice regular trends that I'm used to see, It's funny movements now.

In the end when it broke barriers at 650 and stalled I got wise (or stupid) and doubled down with break even point at 643.

I planed to hold it if it went down really fast. But it didn't. Eur/usd was the slowest pair in that reaction. So I got out.

Another one of risk a lot break even trades.

My fault is that I don't trade technically oriented but intuitive or better to say reversal fight the trend style.
This look like ideal setup for long 6 candles after my first entry for my hindsight learning.

It's my fault that I don't look bigger picture.

It's pretty embarrassing to show all this, but it can just help me learn to trade better.

Tuesday, July 3, 2007

Forex trading 07/03/07

I felt pathetic after trading like this today.Sitting in usd/chf against trend, left some profit, than add to losing position several times to get out at break even because I had to go off line. It looks like I'm trading just to get break even. Put myself in some position, if it show small profit get out, if it show loss wait until break even and manage it how ever you can.

Monday, July 2, 2007

Forex trading 070207

Poor trading. Result + 12 pips of half size position LX3.

Good for me that I tried to short in the trend.

First trade really got me, I gave up the profits and didn't get out at break even.

Last exit as usually just before up reaction. It's funny how I can wait all that time and than get out when all is paying off.

Eur/usd in first didn't look like it will develop in trend. Second set of usd/chf trades was something like averaging down for eur/usd but in usd/chf, didn't go so well.

Sunday, July 1, 2007

Hindsight learning 4

Bottom reversal.
Strong downtrend from the day before resumed in the morning. Big reversal candle is clear indication of possible change of direction. Long side is probably safer now.

550 level is pivotal, up from it is long, down is short.

Nice low risk entry at breakout after 550 consolidation if there is no long entry before.

Maybe reversal on daily time frame.

Hindsight learning 3

Firm close above 480 represent channel breakout and nice signal to go long.

Morning intraday action is showing upside tendency. Candles are above ma consolidating. Break out above 460 have some resistance but it's just reaction. Bull side is confirmed on 15min time frame.
480 breakout is taking profits for some scalping oriented traders because resistance is here. But up potential is not vain so upper time frames take over and uptrend is prolonged through the day.