Wednesday, April 30, 2008

Too much energy in trading gains to sustain it

I have one interesting psychological thought on my mind lately. I watch my trading and I just realize sometimes that there is more to gain from the trade than I do. But somehow when I shot for more it's wrong move and when I don't go for it there is ten times more profit left on the table. I have theory about it all. I believe that I can't stand too much energy. Big profits are too big energy for me. I somehow can conduct certain amount of energy and more is bad for me. It's like electrical energy and carrying capacity of conductor.
If I'm in the trade that later on will go big in my way I always find the way to talk myself out of it and took smaller profit even when there is no strong reason. Maybe it's just the human nature, but maybe as my theory goes it's just too big energy to handle it out. I'm not talking about financial amount, it's just some kind of energy that is conducted or not.

I don't know much about this. Maybe it's just rambling. I think it's like the thing that many lottery winners in few years become bankrupt. Maybe it's lack of financial knowledge what to do with the winnings, maybe because it's just to much of some kind of energy for them to sustain it.
So I chose to trade small and take small winners and don't dwell about what's left on the table. If I go through my trading for last month and put t/p of let's say 100 pips on all my trades and keep the s/l level and bring it to b/e if trade worked in the beginning I would have few big runs that combined surpass my monthly winning in big way. I don't know maybe I'm just imagining things in hindsight. But I do have that feeling that too much of energy for me is just too much. So I got to work with my capacity with the knowledge that even trying to overshot it can be bad for me. So I rather add small gains one by one, day by day.

Does any one have some idea or similar experience or this is just gibberish?

April 2008. results

+232 pips


This is my best month in pips won ever. Also I got 232 full size pips and I traded most of my trades with half size so it's even bigger overall pip gain. For my trading until today this is monster pip gain in month. My size of trades is down also so it's not that much in percentage gain.

It all came with accepting scalping as my main theme of trading. Accepting that it's ok to scalp, to gain small and to leave many potential pips on the table by cutting gains early. Yes, I know that it's against all principles of let your winners ride and cut your losers quickly. I found out that bigger importance than universal principles on trading performance have individual psychological makeup of trader. So for me this works.
I'm trading too many years now the same way and getting the same results. I aim for big profits, ride the winners, load them up and win. I never do that. On the other hand I average down, load losers and when I'm lucky exit at b/e + single digit pip gain. When I'm unlucky I lose 10 times more than I expect to.
So now I just want small winners cut them fast and add them up one by one. I still have big picture in my head and I see the potential of big win. That helps me to enter the trade but in the end I exit in scalp mode.

Trading with half size helped me the most this month. I was relaxed and could clearly see what is happening. When to get out, when to ride out the bumps. It's psychological help. When I see open loss of about 8 pips it's nothing because it's just 4 full size pips. If on the other hand I have 8 full size pips in the red I'm all messed up I do crazy things and trade bad. When I have profit I wait more with half size and in the end I get decent profit. With full size I take out 5-8 pips and I'm happy and it's too low. So leverage is important thing. I will see how will things work out when I put up the leverage again. Maybe it's dollar based thing that I'm relaxed with this size, I don't know yet.

My basic premise this month was that it's enough to gain about 50 pips a week to have 200 pips month and it's 10%-20% based on leverage. For my style of trading it's absolutely enough in pip gain. I don't trade few hundred pips a month, I don't trade long term. My trades don't last even an hour they are few minutes trades. So than I can just take small gain in the day of 10-20 pips and it's all I need.
Trading wears me down, because I watch every tick. So for me it's better to do my thing as fast as I can and just quit for the day. I don't have concentration or mental energy to trade many trades with same clearness. So than it's better to just don't trade any more even if there are better opportunities later. Better opportunities can't help me if there isn't fresh trader to trade them. So I'm not scalper in full sense of the word because I can't trade dozens of round trips in a day.

Now it's to see how will I trade next month. I had good months before but consistency is more important.

End the month with profit

My first eur/usd trade was based on pure momentum, but it didn't follow thru at first and I was in full size trade. Full size, momentum that stop means trouble. I averaged with gbp/usd shortly after because gbp/usd was weak and now it started to fall slowly so there was a chance of further downtrend after bounce. Both trades were full size an it is big emotional pressure on me. If they were half size I would probably ride them out easily. Eur/usd just didn't want to fall and I exit at b/e both positions when gbp/usd gave me enough profit to cover eur/usd loss.

After my exit downtrend developed and I was watching and cursing.

Than I got idea that this is range day and that it's just testing of bottom of the range. I entered now with half size again in eur/usd and gbp/usd. I was relaxed because size was manageable and this is just give it a shot trade if it works great if not get out with small loss.
It started to go my way immediately. Now I was positive that this is the bottom and that we have long way up. I was watching this on higher time frames 15min not 10sec as usual. That doji candle in eur/usd was really promising. Pound just shot up, Euro didn't and I saw a problem that usd was gaining strength against jpy again, and this was dollar move so I got to watch em all. At that moment I had nice scalping size profit and I just get out.
Later things started to go divergent gbp more up and consolidating and eur had big drop. I have +15 full size pips of profit and that's it.

Tuesday, April 29, 2008

Gambling mode

I took full size trade without strong reason for big size or the trade, so I recognize gambling behavior. Truth is that I'm not much in trading today. Probably just wear down from yesterdays intensive trading. So better to quit early. +8 pips

Monday, April 28, 2008

Busy forex morning

I was pretty much concentrated and emotions were low in their impact on me. Trades were half size to keep me relaxed and it worked well.

There was sell off in the morning that I didn't participated but watched, it sure kick me in trading mode.

First trade was when I get a clue that retracement off sell off and current trend will develop further. Exit was based on price that was going up but too slow for 660 level resistance of the morning dip. +17

Second trade I thought that little pop up will be good for fade and when it started to fall I shorted. But it came back and on 10 sec it shouldn't do it if the trade is right. Small loss about -1.

Third trade gbp and eur started slowly to gain strength. There was clear feel on 1o sec chart that there is buying going on. Trend up developed. I exit prematurely, but I brush off that feeling and started to look for more opportunities. +16

Fourth trade gbp looked like it's topping off with attempts to take out 900 level, eur wasn't strong any more and it was hard for eur/usd to take out 690 level. When it came back after spike up I shorted. I thought that it will fall harder to the bottom of the morning range, but it wasn't so fast as it should be after failed 690 level. Another scalp +14

In the end +23 full size pips.
Those cutting sizes and counting full size helps me psychologically. If I trade all with my current full size I wouldn't stick for 46 pips of profits. I would get lot's of pressure from emotions and who knows how I would handle trades. So I like this way of trading with small leverage. My half size trades are now about leverage of only 2.1 because my full size is still reduced from leverage 6 before the last big loss. I think that in the future I would like to trade wit leverage of 10 for full size but I still want to recoup to account highs before pushing size up.

Friday, April 25, 2008


I updated my blogroll, added some nice blogs that I read daily and removed some old ones that I don't read any more. I gathered them from all around and some good I got from Lonely Trader's blog.
I recommend them all.

Macro Man

PRD-day trader

Just Jest

Sanglucci: "On The Come Up!"

Masteroftheuniverse’s Weblog


The Art of Trading

Nice little scalp

I had nice scalp at work at my day job so I'm glad that I made profit after one day brake. I will not push it and will try to skip more trading today. It's my usual trade when I notice on 10sec chart that something is cooking. I had really nice price action after entry and there is more probability that it will follow in that direction. As usual I'm happy to take initial size of the move and skip worrying about further development. Entry was with half size so +16 pips

Wednesday, April 23, 2008

Reckless trading

First I abandoned eur/usd trade that later made nice profit. Action in other pairs was poor so I figured to leave. It didn't even touch my b/e so it was poor choice.

Than I opened gbp/usd without much reason. It was fighting on which side it will go and than chose side against me. Bad thing was that important news time was approaching. I should just take loss. It's like that when you win much than losses doesn't come natural. So I was betting with that trade. Luckily I opened eur/usd short trade because up action wasn't that decisive approaching big figures. In the end I covered loss in gbp with gain in eur. I got out and had reality check that I would be toasted with my gbp/usd bet for nothing.

Maybe I need a break. I gathered nice string of wins and profits in last 3-4 weeks, maybe now I need to cool off like I need every day when I earn some pips that satisfy me.

All trades were with half size.
+3 pips


Later I did more trades and it was all bad, full size trades.
I expected rally up so I entered aud/usd, but I lost in it. Had one eur/usd for b/e. Than I wanted to cover loses in aud trading gbp/usd, but it was revenge trading. First I got good direction, get out, went in different direction and got out. Lost most in spread.

So finishing day down -21 pips. Gain from last two days erased.

Aud trade was ok try, but I was greedy so I entered full size. Last eur/usd was also ok try, but gbp/usd was just revenge trading good thing that I didn't lost more than -11 pips in it. Today I didn't have sure trades like usually I was trying and that don't work as much when I have edge and see with more probability what will happen. Coin toss trades are not good enough because I don't ride winners so it's hard to get ahead. I was in hope mode. I need brake to regroup like I did 3.5 weeks ago. I knew that after morning trades but I didn't follow it but have trades and lost.

Tuesday, April 22, 2008

30 min of work

Half size trades, +10 pips of full size

Monday, April 21, 2008

Half size trades

I use now most of the time half size trades. I don't want just to cut leverage and call this full size. It has psychological advantage. When I'm 8 pips down I say it's just -4 and so on. I stay longer because I want at least 5 pips so I got to wait for 10 to get that. Also I don't feel urge to average to fast because it's not so much a loss. Like today when I was -10 in eur/usd on first trade, it would be good decision this time to average but I didn't feel pressure so I didn't risk more which is usually good thing.

I was long too early, but at the time it looked like it's breaking up. I waited because it wasn't so inclined to go down. I was looking other pairs and wanted to add more positions when it's start going, but at the time break up was happening it wasn't so clear on other pairs that it will be strong big break.
I had also a little short because it was near resistance.
+12 pips in eur/usd

I lost -1 pip on gbp. Funny I was trading with full size in gbp/usd like it wasn't violent and fast. I was sure that it will push to round number and more at that time, but it didn't.

Friday, April 18, 2008

Three scalps in gbp/usd

There was continuation of profit taking in gbp crosses. Very violent and strong. So everything fall against the usd but gbp. I expected that there will come reaction in crosses and that other pair would pull gbp against the dollar also. But it didn't happen. I got three profitable scalps with half size positions for +16 full size pips

I could play trend in everything other, but you know me I'm not such trend trader and I have my ideas that are not clever all the time. At least I was managing scalps nicely.

Thursday, April 17, 2008

Sitting in profit is most exhausting experience

I had nice fade trade because market didn't look strong so I figured that there will be no enough force from buyers to go through 6000 resistance. I had gain and it was awful feeling. Thinking will it come back or it will fall further. Averaging and risking big losses is far more emotionally easier for me than sitting in gain. I feel attached to open profits so much, much more than amount that I risk in the first place when I open the trade. I got totally emotionally exhausted in area that I encircle on 10sec chart.
I was looking for 5900 as target. In the end when I made exit it looked to me that it's 50:50 probability of falling down and coming back up so I took 40 half size pips; +20 pips

Wednesday, April 16, 2008

I'm improving but long way to go

It started like it should be every time but it's rarely that way. I noticed in early stage that something is going on. I didn't act for few minutes but finally I did enter. It looked like we have buying going on. Price was strong on 10sec no going back just breaking levels one by one. Maybe I should add on because it was only half position in eur/usd but it was great that I'm doing the right thing. Off course I exit it in clumsy way for +13 full pips.

It broke all the levels and make 120 pips from my entry. It's all ok I didn't fight it that's great stuff and wasn't intimidated in early stage. So valid reasons for entry bad exit but learning.

Than the problem starts. I had idea for last few days. It's bad for me to have idea. That gbp will break out. So, on gbp/chf down trend line was broken and now it was tested. I wanted this thing to work. So I entered and when it went against me I averaged.
I think that it's confluence of all things good trade, bad exit, market running, me exited early. So I entered in my usual bad mental state: I want this thing to work and will not let go no matter what happens. I was in the end lucky. I made 3 times half size entry's and finally took exit around b/e for +6 pips.
Maybe that swing trade would work in the end, but I'm not ready for real swing trading with reasonable stops and waiting times. I'm good in what I am and that is spotting developments early on.

Again it's better for me just to avoid ideas and concepts, I suck at trading them. Today was good advance in how I should be trading with that euro trade. It needs refinement and that's it. I don't need swing trading ideas.

I'm such slow learner in this trading stuff. However I'm learning. Very small steps with falling back on my ass daily.

Tuesday, April 15, 2008

Pure scalp

There was bad news, I didn't even saw it until it was down. I waited for a bounce and shot for scalp even with 4 pips spread on. +11 pips

Half size trade, gbp/usd was looking weak. I leave those half size trades to go against me more and when it came back I was happy to get out at b/e.

Monday, April 14, 2008

I will never learn

From bad to worse.

In the morning I put a scalp with half size and didn't want to stop out but to manage trade with averaging. I was sitting in the trade for a long time. I took 6 pips and was happy. Than I decided to risk those 6 pips from that two position on again half size trade. I took also 6 pips and that was ok trade. Just a trade. Later market broke up but I didn't enter.

I was worn down from sitting in bad trade in the morning. So in the afternoon there is no way to make good decisions. It's especially sweet when market is irrational by my judgment and I try to put in some rationality with fighting the trend. Only good thing from eur/usd trades against the trend is that I didn't average more. I thought about it but I said no. This averaging so far is manageable and it's not big loss for a day because of previous gains so stick with it.
I did open shorts in gbp/usd, that could be considered averaging of eur/usd but it was some kind of top and not just blind averaging. So market fell in front of the news at 14:30 and I closed trades. Gbp/usd was the strongest of all pairs in that moment so I didn't get much. On those 4 half trades in eur & gbp I got again 6 pips.

So 3 X 6 = 18 pips on bad trading with a lot of risk and bad behavior.

And when I look at charts they look so nice for opposite side of my trades. When you start with bad mind frame it will not go to the good side.

Important thing today was big gap down over the weekend, but market steadily filled it up and there was no resistance.
I was trading today and I trade bad, not scalping. Maybe it was to slow for scalping but than why trade at all. I will probably never learn to trade well, so it's good to just scalp. When you don't want to take stop on first trade you ruin the day and expose account to risk for no reason.

Also I think that today I was in entertainment mood. I had all day for trading so I wanted to have fun. It's stupid but it's reality. Adrenalin fix, little of bad emotions, fear, hope and my day was filled. I got my entertainment from markets and my interaction with it. It's usually very bad for my account.