My Goal for 2007: Break-Even

D

datamerc

As ambitious as it may not sound, it is my goal to simply break-even by the end of this year. I am starting this journal because I need more discipline. I want this journal to be the person I report to at the end of the day (rather than my wife - I don't need that stress) with my trades and limit the stupid mistakes that have cost me so much in the past.

A little background...
I began trading (forex) in September 2005 and love it for the opportunities and challenges. Since I began, I have been good about keeping records of my trades. There have been times at which I become very disappointed in myself, but I never blame the market or fool myself with excuses; and the many losing months are just a cost of my education. I have tried many different ways of trading forex, and have become comfortable with what I feel is my edge.

What I trade...
I have a full time job and a family, so I limit my trading hours to 4am-7am CST Monday through Friday, except on Wednesdays when I can watch all day. I trade spot EURUSD and USDJPY off the 3 & 9 minute charts using IB's TWS and Sierra Chart. The size of my positions and maximum daily loss is based on my account balance. My system usually only gives me a few trades everyday.

Where I have failed...
I prefer the short-term trades and that is how I have setup my system. I have had plenty of winning months, but the only thing that has really slaughtered my equity is opening foolish positions and not getting out. I sometimes have put on these "lotto ticket" trades and walk away. I end up adding to the loser because it has just gone way beyond my daily/weekly loss limit. It has been these trades that have taken massive amounts of capital away from my account. More often than not, I have been able to get out of these trades after a few days (with hoping and wishing). But getting out of them successfully is more of a curse than blessing. Because of my last huge loss, I have stopped trading for a while and decided to start this journal. I will begin again on May 1st.

I will become a consistently successful trader - I just need to get there before my account dries up.

Thank you for reading.
 
You got it. Keeping records is the key. That turned my trading around dramatically. I started noticing patterns and strategies that were costing me. Once I de-emphasised them and started focusing on what I do well, my results became profitable.
 
Just like the "first do no harm" principle a first principle for recovering traders could be "first stop making errors." So I like your "don't have to make any money" starting point.

For a long time I gave away too much of my daily winnings by taking retrospectively foolish trades. I spent a lot of time trying to fix my mind with various approaches but with little effect. In the end I gave up trying to fix my mind and cut out 90% of those trades by changing what was displayed on my screen - this removed the cues for those "automatic" trades.

This has made me a fan of fixing the system so that your mind doesn't have to be so good to be effective. Does your system have stop losses? Can you use a tool that places a stop loss at the same time?
 
I appreciate your support everyone.

Quote from kiwi_trader:

Does your system have stop losses? Can you use a tool that places a stop loss at the same time?
More...
Hi Kiwi - Under the rules of my system, there is a 5 pip stop on every position (but I actually have to get out of the position myself).
As for software, I get in/out at market using the "FX Trader" in TWS. I have considered using ButtonTrader because it allows a max position/daily loss to be set (this would be a nice feature to be built into TWS).

When I'm sitting at the trading screens, I do okay following the rules. And I try to avoid reading or watching all the market commentary because it tends to distort my view of what the prices are actually telling me. I trade between bollinger bands, so each position gets me 8-15 pips on average; but sometimes I will get an overwhelming urge to try and get 80 pips on a position by just opening it walking away (this is what I call a "lotto ticket" - get rich from luck, not skill). This doesn't happen as much as when I first started trading, before it was once every couple weeks. With the positive reinforcement of my system, I have reduced this foolishness to only every couple months.

David
 
5/1/2007
+$63.93, 3 trades (2W, 1S)
EURUSD: +3/16
USDJPY: +8/15

B - I was maybe a bit too cautious on the first day back after my forced hiatus. Was only able to trade two hours this morning. Total of 3 trades, 2 winners and 1 scratch. Got 3 pips out of EURUSD 16 point range (difference between high and low during the time I was watching). Got 8 pips out of USDJPY from 15.
 
5/2/2007
+$163.95, 5 trades (5W)
EURUSD: +7/37
USDJPY: +21/30

B - IB backfill wasn't working so my SC indicators weren't accurate - flying blind most part of the morning. Not feeling that great - so stopped early before screwing up too bad.
 
5/3/2007
+$66.60, 3 trades (3W)
EURUSD: +10/8

C - IB backfill still wasn't working today - just did some scalping. Probably shouldn't of even traded without my system indicators not working (reason for lower grade today) and the extremely tight range in EURUSD.
 
5/7/2007
+$46.01, 4 trades (3W, 1S)
EURUSD: +6/12
USDJPY: +4/8

C - There wasn't much movement this morning. Unable to use system rules since IB backfill still not seeming to work (sent in ticket this morning to see about getting this resolved).
 
5/8/2007
+$91.35, 4 trades (4W)
EURUSD: +7.5/26
USDJPY: +11/30

B - Held most positions to targets, although missed out on a couple good moves. IB backfill still not working.
 
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