Tuesday, May 18, 2010

Little things make a big difference

I want to talk about how I need to loosen up. Looking at my trading advice would be to constrain. On the contrary my trading is like this because I'm not at ease. It's too hard for me to close bad positions or to reenter, so I don't do any of two. I average. All because I don't like small realized losses. Having -5, -5, -5 +30 for me is emotional horror.

First eur/usd position didn't work from the start and I didn't close it quickly, which is bad because it was at point where it will move significantly up or down. To new high or decisively lower. I averaged and ride two positions in to the news. I can blame cold that I have for such irresponsible behavior. Ok, after the news price went my way and with green line is marked my break even point. I'm up 20 pips and it's failing up there to test old high and I let it slide all the way down. First it's stupid to act like I now have to trade with two positions and second would it kill me to take profit and reenter if it goes further up. I'm afraid that I wouldn't have courage to open again one position and no chance for two once I close. So I'm greedy and leave them open. When I have break even again at 11:20 there is no chance that I would take it out. Now I need big profit on it.
From that point little free fall and average into oblivion. Having open loss of 120+ pips on those four positions. That's how you risk it all. Having all margin used up every 15 pips additional 5% down. At that point you are at mercy of price movement. Risk is so big, close position is mission impossible psychologically. Usually if I ride it to b/e I will close it there because I'm all drained from emotional roller coaster.

All this because I don't have habit of closing position with small loss or reentering if price goes in my direction. Because I know that I will not do any of those things I do what I have done today. I really need to make myself learn those not so major things. If I do change in my trading (risk) can be major.

+30 pips

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