Good place to heckle and shame the newb (fx)
- Thread starter AyeYo
- Start date
I realize that's the wrong attitude, but did I not correctly call two decent size losers in a row? lol
My strategy is playing reversal swings and breakouts off simple support and resistance. I don't use indicators (unless you consider fibs an indicator. Although I do use a williams %r for additional confirmation on stocks, but I do NOT trade it). I just find S&R and trendlines, and play the bounce and/or breaks. Nearly everyone uses support and resistance to some extent or another, so it's a very reliable, often correct strategy (or more of a self-fulfilling prophecy in my opinion, but it works nonetheless). The problem is in how I manage it. I actually make plenty of money for my friends because they go with my calls while I sit and second guess myself.
The issue with this strategy is that it demands that you take the FIRST test of S/R to get the best results. Whatever medium you're trading nearly always bounces S/R on the FIRST test of it, if not, you cut losses quickly. My problem is that I'm too busy second guessing myself on that first test to take the trade, not to mention the fact that it's scary to take a counter-movement trade as price is flying towards you at full speed. So I usually get in on the second test, which is less reliable, or, in today's case on CHF, the third test. By the third test, S/R is usually broken. I knew this ahead of time, which is why I called the breakout, but took the trade anyway out of spite (poor management/plain stupidity again).
But to relate this to the roulette example (yes I know from experience
) and the main thing keeping me from being consistantly profitable, let me explain how my trading goes in the long term. It should be obvious from this thread that the strategy makes significantly more right calls than wrong calls. I can often go for streaks of 70-80% some weeks (I don't care if anyone doesn't believe that). As is also obvious from the thread, I usually fail to ride those right calls to their full potential (also due to second guessing). So what I end up with is a lot of small winners. After many winners, I begin to start the roulette cycle, "How many can I possibly have without a loser?" or "This is too good to be true." So the second guessing starts, and I start getting overly cautious with my trades. This causes two problems: #1 I miss many excellent trades (as can be seen lately in this journal) and #2 I wait for too much confirmation and end up taking trades that are outside my rules (as can be seen today with the CHF trade). The strategy simply doesn't work if you hesitate, because at that point you get confirmation you've already missed the low risk entry.
So the reason I say the strategy is solid is because, had I taken EVERY good setup I saw (all of which were winners) in the last three days and road them to even half of their potential short-term gain, I'd easily be up an extra 100+ pips. But because I second guess myself out of so many good trades I miss that gain and end up getting my P/L hammered on the bad trades, rather than just having a normal draw-down period on my gains.
Just last night alone - good, nearly no brainer call on USD/CAD. It was at resistance and a fib, struggling with resistance, bearish candles like no tomorrow, just had a big run, etc. This one I DID take right when I wantd it, but I second guessed myself into dumping it for break even because my P/L and the fact that "zomg I'm up I don't want to lose it!!!" is always in the back of my mind. Had I set even a piddly 3-4 pip stop and let it ride overnight with my 20pip target in place, it would have nailed it with ease while risking less than the spread. Then I would have started today up 69+ pips, could have confidently taken the CHF trade on the FIRST resistance text and banked another 10 pips, etc etc. It's all on me, not my strategy.
Help me out!!!
Anywho... cleared my head and going about this a little differently. Going to give the stop thing a try so I'm less stressed about my positions and also so I don't have to actively manage them. My actual postion should have been 3 pips higher, the price changed at the instant that I clicked sell.
Short - USD/CAD 1.09913 x1
Stop Loss - 1.10003
Take Profit - 1.09741
If I was feeling more aggressive/lucky my take profit would be about 20 pips lower. A retrace to there wouldn't surprise me. But we'll start with conservative baby steps.
My setup/strategy should be obvious from the chart screen shot:
Oh and in better news today, I'm up massively on SPNG (which I own at .1348). Buy 'em up, they're a good company.
Short - USD/CAD 1.09913 x1
Stop Loss - 1.10003
Take Profit - 1.09741
If I was feeling more aggressive/lucky my take profit would be about 20 pips lower. A retrace to there wouldn't surprise me. But we'll start with conservative baby steps.
My setup/strategy should be obvious from the chart screen shot:
Oh and in better news today, I'm up massively on SPNG (which I own at .1348). Buy 'em up, they're a good company.
Hi AyeYo,
I've been reading through a bit of your thread and I have to say that I think you're playing a pretty dangerous game.
You believe you have a good strategy that produces a high percentage of winners. So far, that's the only part of your total strategy that you have defined. And, yet, you don't have a great entry strategy because you complain that the trade is always going against you.
Also, you don't use stops because you can't figure out where to place them. I would suggest that if you can't find a good stop point, you don't take the trade.
At some point you are going to get caught in a difficult and costly emotional trap. You will have a position go against you and you will be "hoping" it comes back. Meanwhile, it will just continue to go against you until you have an enormous loss that wipes out a huge chunk of your capital. So many people have done this, so please think about this. It's a very difficult position to be in.
Also, you mention frequently that you are not taking many of your setups or you don't let the ones you do take run long enough. I would suggest thinking about taking smaller position sizes so that you can more safely let them run. Then, as you gain more confidence in your system you can slowly increase the position size.
There is so much written on money management and risk management that you should have no problem finding some information. It's utterly crucial. I have finally come around to the belief that it is one of the most important elements of success. You may want to listen to a presentation by Timothy Morge as one reference. But, there are many out there.
Right now you are trading very emotionally. That will hurt you in the long run. It's hard to understand now. You'll cruise along making and losing money, hopefully growing your capital. But, at some point you will have a huge loss that totally changes your game. Just read through the forums here or ask around. It's happened to many. Being overly emotional is risky. Try to be more formulaic. You may use gut feel for your trades but try to be more scientific in your risk management and money management.
I hope this helps and best of luck to you.
I've been reading through a bit of your thread and I have to say that I think you're playing a pretty dangerous game.
You believe you have a good strategy that produces a high percentage of winners. So far, that's the only part of your total strategy that you have defined. And, yet, you don't have a great entry strategy because you complain that the trade is always going against you.
Also, you don't use stops because you can't figure out where to place them. I would suggest that if you can't find a good stop point, you don't take the trade.
At some point you are going to get caught in a difficult and costly emotional trap. You will have a position go against you and you will be "hoping" it comes back. Meanwhile, it will just continue to go against you until you have an enormous loss that wipes out a huge chunk of your capital. So many people have done this, so please think about this. It's a very difficult position to be in.
Also, you mention frequently that you are not taking many of your setups or you don't let the ones you do take run long enough. I would suggest thinking about taking smaller position sizes so that you can more safely let them run. Then, as you gain more confidence in your system you can slowly increase the position size.
There is so much written on money management and risk management that you should have no problem finding some information. It's utterly crucial. I have finally come around to the belief that it is one of the most important elements of success. You may want to listen to a presentation by Timothy Morge as one reference. But, there are many out there.
Right now you are trading very emotionally. That will hurt you in the long run. It's hard to understand now. You'll cruise along making and losing money, hopefully growing your capital. But, at some point you will have a huge loss that totally changes your game. Just read through the forums here or ask around. It's happened to many. Being overly emotional is risky. Try to be more formulaic. You may use gut feel for your trades but try to be more scientific in your risk management and money management.
I hope this helps and best of luck to you.
I'm beginning to realize just how much that's costing me. The three best (and easiest) trades I've made in this journal are three I simply let ride with stops and take profits. I think I'll be doing more of that from now on. It takes much of the emotion out of it and lets the strategy play itself out. But also, this journal is half for me to vent. Everyone probably thinks I'm a raging psycho. Yes, I bitch and I whine a lot here, but I'm trying (hard, and unsuccessfully so far) to keep that out of my decision making. I struggle to balance the health emotion of being angry at myself for doing something stupid, with the unhealthy emotion of letting that effect future trades. On the one hand, I don't want to be emotionless and blow off the loss like it wasn't my fault. On the other hand, I don't want to be so pissed about it that I go take a poor trade for revenge (like the JPY this morning). Trading is easy, controling yourself is not. lol
Have no fear on the big loser, you did say you only read part of the thread, I have since started either using stop orders or have been much quicker to cut losses (as I did twice today, would have been crushed if I hadn't). As is also pointed out somewhere back there, I'm already trading as small as I'm allowed. I'm looking to switch to Oanda, which will let me go smaller. But I hesitate to go smaller because of the reduction in the emotional game. At $1/pip, I'm not losing anything I can't afford, but I'm losing/gaining enough to teach me a lesson. At $0.10/pip, I'm losing/gaining so little I might as well be paper trading, and I don't feel paper trading (aside from to test methods) really teaches what real money does. This is why people go from profitable paper trading to getting devastated with real money, they didn't learn the psychological game.
It's difficult to learn everything at once, a strategy, reading technicals, money management, the emotional game, the discretion game, etc, but I'm trying.
I appreciate the help though, and I will most definitely continue using stops.
At it again this morning. Trying ever so hard to NOT get angry. Trade was clockwork. No brainer. Setup couldn't have been more clear. Movement after couldn't have been more perfect. Take profit would have hit, plus the spread difference. If I can't take a trade like this, then I'm at a real loss as to what I can do.
Missed:
Missed:
Excellent advice.