August 2008. results

Well as you know I had blow up day this month. I hope that I will learn from it and leave averaging behind me in my trading life. Size of positions were 50% bigger than it is now so recovery will need more pips than it's lost.

- 257 pips

- 15.6 %

Next step

I'm now telling myself: "I told you so". It's all easy in hindsight but sometimes swing trading understanding how things are developing are important and it's a shame not to use it. My problem is that with too many ideas sometimes it's hard to distinguish which one is worth pursuing. Also I'm so soft on scalping profits and immediate gratification that I hardly ever stay with the trade. I'm writing this post just to address that so some day I will stay with some good trades and ideas.
Today on my last trade I wanted to book a profit because until that trade I was only down or flat for the whole day. So idea of finally 13 pips was great. But after pretty much bad and random reversal looking entry I was looking for proof that that trade will work. I was close to being stopped out on that spike and was saved by 2 pips. After that it just looked to me that 4800 level is rejected and if there is no force for up market will fall. So i was with that conviction in that trade 20 more minutes but didn't want to risk my 13 pips when I had them. I always have some explanation why I exit prematurely. Today it's because I was down and flat after so many trades.
Now when I look a chart I can only regret. It's true that I'm scalper and that many times I got nothing when I try to stay but I think that is also a skill, staying. I need to develop that. I can't do it now.
I remember how it was for me impossible to trade in the direction of the trend. Some of you who are with me from the start of this blog and before can remember. I was just picking tops and bottoms, never trading in the main direction. So if I can now easily trade the trend and break out than one day staying power will also be one of my skills.

Overtrading today

In the morning I had my share of drama with trade closing slowly towards stop. I had close encounter with emotions. I moved my stop for 1 pip. Pressure was so high to avoid stop, avoid loss, avoid pain in the end. So I decide let's move it for one pip, and it made a difference in my ability to cope with emotions. In the end I lost on that trade and one pip didn't make the difference but it did psychologically. I don't feel bad about moving stop for that one pip, because it was conscious psychological exercise. From that point I was emotionally distorted and I did many more trades. I had -20 stop taken in gbp/usd also. I had slow reactions but I did reverse.
Well nothings much changed when I check my emotions now and before big loss. Only thing is that I'm trying to maintain -20 max s/l and avoid averaging even more important. Until I'm good with that I'm satisfied. I don't expect to mend all bad behavior at ones, no averaging is premium for me so let's work on that.

It was a choppy day and hard to read for me. Lately my trading is based on scalping in the direction of the trend. Without follow through I don't have good results, it's like I'm late in the move.

More and more I realise now with trading with stops that I got to milk as much as I can when there is real opportunity and big strong move. Just scalp isn't good enough, because -20 stops are big setbacks and small profits can't recover that easily. Also I got to pay attention to trade when I really see something because random trading is expensive.

+13 pips today

Slow reactions

I wasn't in the mood for trading in the morning. Later I was looking for some news scalp. I was kind of slow and late in my entries. Exits were good. Last trade I had to go just when it was at around b/e so I exit it.
-1 pip

News trading today

Bad news for eur, but spread didn't came down for a long time. I got stopped on first short but I tried my luck again and got very nice move. It could be more but as usual I got on first sign of slowing after nice move and gain.
Later there was eur/jpy commotion and not genuine eur/usd push down so I took little reversal trade and win again.

+ 37 pips

Feeling protected

Euro had problem to brake 800 and usd/jpy made higher low, so I thought that best chance for reversal would be in usd/jpy if it happens. Also if it is false break down on higher t/f it would come back up nicely. I exit first trade because it looked like it will break down fast, but it didn't. On a bounce usd/jpy was the weakest to recover so nothing came out of second trade.

London had holiday so it was slow and suitable only for 5min swing trading in the morning.






Later I was trading the news, as soon as spread came back to normal I shorted. Apparently there was some bad news also in the bundle, so it shot right back. I was in panic, what to do? Move stop, than in my head popped "You don't move stops any more, remember". I was waiting for -20 to hit me because I just didn't want out on a good news for usd. It stop before my stop and 800 level and I thought that maybe now the good news for dollar will slowly take eur/usd down. It was slow. I felt kind of protected with that stop while waiting. It was fundamentally o.k. to be short, protected with stop, great let's ride it on. It was fighting level by level down but not much. Gbp fell pretty hard before my exit, eur didn't so I felt that there will be reversal back. I could hold it but it's not for me, I gave it a chance.

Best thing today was that feeling of being protected by a stop. When you move stops than you never know to how big risk you will expose yourself until the end of day . So, you are nervous. With stop I felt kind of relaxed. Now I can see benefits of having and respecting stop levels.

+8 pips

Mortal enemy

Finally I did some trading today. I opened a platform to watch a little, things started to move and I instinctively started to push buttons. I didn't feel bad emotions but all my attention was on how will I react to stops and will old behavior start to kick in. Well it didn't. I was ready to take big stops of -20 as my last line.
Trading was kind of sloppy because I was all over the place. I didn't done any averaging.
In Euro I got out of first short because it bounced from bottom of the channel at 60 on higher t/f and I expect that it will brake it. I reversed because of that but got stopped, I reversed again and add to that trade. It stop moving, I exit and reversed again.

Later I had two trades in gbp/usd trying to pick the bottom.

Now I kind don't care about money and don't focus on that. I think that it's deeply integrated in myself so I don't have to spend energy on that. It will come naturally without my conscious help. I'm trading the way I know to trade and don't think much about that either.
Focus is now on how will I react in critical situation for me when I have to get out on a stop that is on when the trade start. Will I want to move it, will averaging urge kick in. I'm now focused not on preventing that but watching does it show up. If it does, I'm going to close the shop for that day, pure and simple shut down. I really thought a lot last days and now I don't have much material to continue. I need fresh trading to put things in motion, be it problems or not. I got to admit that on trade before last trade in gbp/usd averaging cross my mind and it was like bell rang in my head when I noticed that thought. It's like mortal enemy for me now and it's good that it is.
So we will see how things develop around my emotional handicaps.

+30 pips


Last but not least I want to thank all You trading friends on your comments and help when I was down with my spirit.

Gamblers state of mind

My latest thinking is that I'm totally wrong in my approach to trading. Now when I'm looking what is wrong, what need to be changed I see where is my attention. It's on the money and only on the money. I was watching some movie yesterday, one of the side characters was gambler that bet on horses. I just understand his motives. He's only thinking about a win and next win and all in terms of money. My biggest joy in trading shouldn't be how my account is now bigger for x amount of dollars than yesterday and than project it in to the future how long with current rate of return I will make millions or any other imaginary number. That's how gamblers think I believe. I never thought about myself as a gambler because I never bet in my private life, never go to casino. I'm too much risk averse and would never put 10$ on the table and spin the wheel. I just don't like probability of losing money and I'm also pretty much frugal in every aspect regarding money in my life. When I look at myself I think that gamblers aspect of me is that thinking about future big amount that I'm aiming to. I'm not in the now making whatever is my current size, but I'm thinking how would it be when it will all be ten times bigger. It's distraction and it's the force that direct my trading. When I'm approaching the stop loss level I got to move my stop because if I hit it I'm further away from my imaginary picture. I'm not thinking in that moment about what is right I just try to win on every trade. That fixation on future monetary level is so strong and integrated in myself that I don't even distinguish it. It's like my second nature. That is gamblers state of mind. He is not satisfied with himself and his situation in current moment but he thinks about how would it be. He is so strong glued to future projection in his mind that he can't live without it. His life doesn't have sense without it. All his actions are there to move him into that imaginary picture, it's so important that something banal as taking the stop or following the rules can't get in a way. Also he is so convinced that it will be achieved that no risk is too big. There is no risk in his mind because his projected picture for him is reality.

Odd thing is that in trading versus gambling with work you could change odds and put them in your favor so there is no need to gamble. Still it's so hard to trade as you would do any other job. Approach to trading should be of an painter that is painting the picture, he is not thinking when he start to paint about money, how much will he get for the picture. Problem with trading is when you tend to think about assets in your account and amounts that you win or lose as of your money. It's hard not to, but that is just inventory that you are moving around selling and buying. It fluctuate. It's not your income, it's not in your wallet. With money in your account it's ok to do things that you would not do with personal money like lose it on a stop. That is approach that people call treat it as a business, than you treat the money as inventory and not the money. I can't do it yet.

When we trade we talk about discipline and rules. It's funny that we don't think about what is that power that impel us to stray away. I believe that all action regarding changing the way how I should trade and what rules I should follow will fail in the end if I don't address that issue. I can practice taking losses, risk this amount or other, do whatever but day will come when things will just burst and damage will be done. So I'm not in the mood right now after that just happened to start again on a wrong way again. There is now sense in building a house if foundation is not in place. We all rush in our trading life and never look what approach is needed than after few years we face reality that things are not going well. Right now I got to work on foundation because I know that I will fail without it, I'm failing already. Can I transform my thinking and with it my approach to trading from get rich (quick or slow) to right one we will see.

Stress

I have more to say about today. Well, I had one week on vacation that I didn't trade at all, I liked that week. As much as I like trading and how much it's rewarding on many ways I have big negative issue in my trading. I feel big stress. I will fear and anxiety over every trade how ever small or big it may be. It's irrational and probably it's not how others feel when they trade. I didn't yet step over on that next level when you don't feel it like that.

I work in sales and know how there are many sales jobs with different levels of stress. I thought that it's normal to be stressed out on a job, that it's normal that something is hard. Now I don't think so. From my experience there can be rewarding sales jobs without stress that I felt before. So now I don't even consider jobs that I previous worked as an option. I don't need that in my life, it's like bad relationship with fighting and lot of anger. I can pass that.

So, my trading should change or there will be no trading. I just don't need to feel what I feel when I trade. I don't need that in my life. I don't want that in my life, one way or another. I can't tell you exactly why I feel like that. Am I so risk averse or can't stand losing. That is yet to be found or not. Today I fall so deep to be put out of commission, to stop trading, to stop being stressed out. Remember this is my second day after vacation and yesterday I was really close to do so big damage like today but market just reversed. It's like subconsciously I don't want to trade, i want to live without that stress.

I really don't know how can I accomplish that. Change the way I trade, time frame, position size or just the way how I think. This is definitely it. It's linked with my suppressing of losses, that's what is making all the stress.

Well, now I'm getting somewhere.

Blow up

Well dear friends I had another blow up today. I lost about -20% today. Yes it's possible, it happened. I was like in March in self destructive mode, averaged a loser and that's it. I didn't pull brakes and made lower low in my account. Like before I believe that it's good. Why? Well the way that I trade doesn't work. So if this is the only way to stop doing it than be it. By that I don't think on scalping and taking small profits, trading of 10sec chart. Trading without stops doesn't work. I can go through same process 10 times again, build slowly and than lose control and lose everything build in one averaging session. I could today go out with much smaller loss, even with usual averaging that I do, but I think that I didn't want to do that. It wouldn't have an impact. Now when I don't know what to do next there is impact.

I always tell myself in similar situations that all what is needed is take a stop of max 20 pips and that's it. But with all comments from Orion, learning, I never go that extra mile. I suppress taking stops wanting to have 100% winning trading. That's ridiculous, but in few short words you can tell just that about my trading. I probably don't believe that I would be net positive with taking stops and don't want to face it if that is reality. I don't want to change methods, I don't want to follow rules. Well in the end this is result. We all hear about how 90% traders fail, well this is how it is when it's happening. I can't lean on averaging if I want t4l, so why even try to win anything with averaging and not taking stops?

Now I don't feel bad, I feel light. All that suppressing was on my chest and now when I had so big loss after suppressing all small losses that is so good. I felt that way in March also and after that I had 10 positive weeks. Well now I know that it's not a goal to be positive but to trade on proper way.

I don't know what to do next regrading trading, how to setup things. It's too early for that. I'm not in that usual quiting mode that people have when they fail big way. I got to accept that trading may never work for me and that there is no guarantee of success. That's also the thing that I suppress. I don't treat trading like a business with acceptance of the fact that it may fail. That is probably because I count on trading in my life to accomplish some goals with it. That's wrong. You can try, but you can't count and believe in guarantee. It's all irrational I know but those are the facts. Knowing that all is probably helping a little because I don't feel that I'm in a dark. On the other hand it doesn't solve things just by knowing what are the problems.

I'm tired of doing bad things, fighting. It would be easier if I could come to that all without the day like today. I feel like I write obituary. Well let it be one of bad trader. Maybe good one came out.

When it's all finished I feel puzzled why I need that big loss, why didn't I pull a brake earlier. I don't know. I can just guess like I did with this post.
If I can't trade on a proper way, for example with taking stops than it's really better not to trade at all. Just waste of money and time.

Vacation is over

Vacation is over and today I had first time opportunity to trade again. It started o.k. but than I broke my rule of stop trading when you have nice gain. I was overconfident and got burn and than fall in emotional trading.

On my first two eur/usd trades I had great entry's but to early exits. It's a shame. I first wanted to have nice profit and didn't want to risk and let first trade to go some more. Second trade was partly based on me being angry on missed profits. Well in the end they fall in my category of scalps and I usually do exit prematurely, so nothing new with that. I did up my size also.

Than with confidence I didn't want to call it a day and I entered gbp/usd news trade while the spread was 20. It was flying up and news was good, but apparently some other news came bad and it was terrible for me. I lost all the gain from previous trades and around that much more.It was unexpected because a second before market was so strong, I wasn't prepared for anything like that.
I got in emotional mode, bought again and didn't want to exit. I averaged and closed those two positions in profit. I was at b/e for the day.
Now I was sad about my lost profit in eur/usd and traded more until I got all the profit back. It's so amateurish, I know. I can't hide from that, everything from to early exits to emotional trading. I was laughing to myself when I got out in that second to last gbp/usd short 10sec before big fall.

I'm where I am. I got rules that suite me. So what if I take 14 and not 40 out of the move. Better to stay with that than fall in emotional madness. Progress is slow, if I go too fast I jeopardize it all.

+23 pips

NFP

There wasn't downside pressure with bullish news for USD so I chose long side. It was unusual NFP without big swings. I waited enough in that trade cutting my beach time ; ))

+12 pips

July 2008. results

It was all in all quite nice month. I didn't put more size in positions as planed because I wanted to be relaxed on vacation. It was summer trading, there is not so many opportunities and when you get them they are small and short. Scalping was nice as always. Big deal is 1-click trading now on OANDA so things are little bit smoother.


+ 148 pips
+ 5.3 %


For the end one little motivational video with Hevad Khan :))