Tuesday, January 19, 2010

Changing directions

I had around 8 pips unrealized scalp profit which I didn't take. It wasn't enough.
From there to -40 in next few trades. Then after the news I cut the loss with positive scalp to -22.
Then market changed direction again and I didn't.
End of day loss of -116 pips.
Good thing that I finally gave up because after my exit pound lost more that 40 additional pips and with my near double size it would be....

From time to time I get reminded why I scalp and why is 8 pips or 4 pips enough of profit. Because if I lose that open profit and some more day like this is high probability. Classical blow up day.


Anonymous said...

I'm going to sound like a patronising pain-in-the-arse BUT you've identified what you do wrong yet keep on doing it.

There are only two possible scenarios.. stop doing it or run out of money.

FX said...

I have no problem with your comment, it's true. I'm dealing with it as I know. If I could do things differently I would do them. Blow ups are just fact of reality for me. I accept them and try to minimize them and they're damage. Also I try to prevent them buy preventing behavior that leads to them.

From time to time I get day like today. I'm just glad that I'm doing pretty much well between them and that they are more far between. At least I have that feeling.

Also, day like this doesn't happen in vacuum, I have context for it and know from psychological stand point why did it happen.

Now I sound like I'm defending myself, I just used your comment to clarify things for me further.

Mike K said...

At lest you are being honest with yourself. That's what matters. Exits are always tricky, probably best idea is to have objective for each and every trade. In a funny twist I wrote about my own trials with this issue today.

FX said...

Mike you wrote very good post on your blog, I like it very much. Trading is such mix of emotions and we need to find balance.

Anonymous said...

Glad you took my comment in the spirit it was intended.

However, I can't leave (I'm annoying like that) without pointing out that only death and taxes are a "..fact of reality..".

All this emotional stuff is great if you want to go on Oprah but otherwise it is just a great big cost to your business. Make some rules, stick to them, make some money.

FX said...

Hehe to your Oprah comment. Yeah, you are telling the truth in most simplest way. Having rules and sticking to them (if you don't stick then they can't be called rules) is final destination.

Anonymous said...

You closed your long trade at a top and then instead of reversing direction, you immediately went long again???

FX said...

How do you suppose someone can knew in that exact minute it is the top? Couldn't it go 30 more pips up for example. In hindsight it's all very obvious.
Problem that day is not taking stops on time.