Sydney Kris' Journal

[KrisL]

I've decided to start keeping a journal and would very much appreciate any and all feedback that the community can provide.

Below is the last trade I took, last Thursday on the Kiwi during the Asian session (I live in Australia and like to trade the Tokyo open). The trade turned out to be a full 1% rent, but I think the setup was valid. Was it? Was there anything in the chart that would have filtered this trade for others?

nzdusd 2013_11_14.png

After I stopped trading I went down to the beach and had a think about the trade. I am reading Douglas' 'Trading in the Zone' at the moment, and the emotions I felt while I thought about the trade were interesting in this context. While I have a strong belief in the system and a powerful vision of where I believe it will take me, the losing trade aroused doubt on an emotional level. This doubt would have likely influenced the next trade, had I taken one. Douglas talks a lot about the difference between winning and losing mind-sets, and one of the most significant differences is that winners think in terms of probabilities and have a staunch belief that, given a large enough number of trades, their system tilts the odds in their favour, much like the rules in a casino tilt the odds in favour of the house (Douglas doesn't say so explicitly, but I thought it interesting that the mind-set of the house, who always wins in the long run, is the opposite of the mind-set of the gambler, who always loses in the long run). Therefore, a losing trade doesn't affect the mind-set of the successful trader because he recognises that in the long run, his system results in a net winning position.

Given the emotions I felt after this losing trade, my mind-set certainly hasn't developed to the extent that I would call it 'winning', but I do think that recognition of the fact is the first step in the right direction.

What do others think?

[immy]

I've decided to start keeping a journal and would very much appreciate any and all feedback that the community can provide.

Below is the last trade I took, last Thursday on the Kiwi during the Asian session (I live in Australia and like to trade the Tokyo open). The trade turned out to be a full 1% rent, but I think the setup was valid. Was it? Was there anything in the chart that would have filtered this trade for others?

nzdusd 2013_11_14.png

After I stopped trading I went down to the beach and had a think about the trade. I am reading Douglas' 'Trading in the Zone' at the moment, and the emotions I felt while I thought about the trade were interesting in this context. While I have a strong belief in the system and a powerful vision of where I believe it will take me, the losing trade aroused doubt on an emotional level. This doubt would have likely influenced the next trade, had I taken one. Douglas talks a lot about the difference between winning and losing mind-sets, and one of the most significant differences is that winners think in terms of probabilities and have a staunch belief that, given a large enough number of trades, their system tilts the odds in their favour, much like the rules in a casino tilt the odds in favour of the house (Douglas doesn't say so explicitly, but I thought it interesting that the mind-set of the house, who always wins in the long run, is the opposite of the mind-set of the gambler, who always loses in the long run). Therefore, a losing trade doesn't affect the mind-set of the successful trader because he recognises that in the long run, his system results in a net winning position.

Given the emotions I felt after this losing trade, my mind-set certainly hasn't developed to the extent that I would call it 'winning', but I do think that recognition of the fact is the first step in the right direction.

What do others think?

Hi

Firstly I'd like to congratulate you on your decision of keeping a journal. A Journal is indeed a very useful thing if managed properly. Grant's, Dave's, and more recently frans journals prove to us how valuable a practice this can be.

Secondly, your first post contains very important information. If you continue posting such thoughts and observations time will prove to you the importance of it.

Fear is a useful thing. WE must know what fears we carry and fear of losing is one such factor that keeps us alive in the ordinary world but in the world of trading we need to know how to manage fear differently. Without fear you'll become reckless but un-managed fear will lead to missed opportunities and may even become detrimental to learning process and success. I would like to congratulate you again on choosing to read Trading in the Zone by Mark Douglas. I recommend it to all the AIMSters. This is a single BEST book on trading. Its all in the mind. A probabilistic mindset is a requirement for successful, sorry, "consistently successful" trading. I do not like losing a trade but personally I have learned through experience no one can tradse without losing and its an integral part of "technical trading". But fear of trading or losing trades will fade away with time. The more your belief that trading is a game of probabilities and that the trading is a "pattern recognition numbers game" strengthens it will gradually become easier to face losing as well as winning trades. The rule of 20 trades is an important one. Always analyse performance after 20 trades. All IMHO

All the best

[Grant]

What Immy has written is a great answer...

I would just like to add that i found the single best way of overcoming a fear of losing was seeing my account balance steadily going up.

Once you see that then "rents" are just a cost of trading...

Grant

[KrisL]

Immy, Grant, thanks for your comments. Your feedback is much appreciated!

This evening, trading around the London open, I got a couple of small wins on EURJPY, shown below.

eurjpy 2013_11_18.png

The first was exited quite soon after entering. I decided to respect the Fib levels as I was trading against the trend on the higher time frames, and it worked out OK. In hindsight, I shouldn't have taken this trade, as it wasn't a setup. Douglas would refer to this as an unjustified win.

I am happy with my decision to take the second trade, as I believe it was a valid setup. I was stopped out for a small profit after trailing AIMS levels.

I've noticed that quite often we get stopped out following AIMS levels, only to see that the break of the AIMS level that triggered the SL turns out to be a small retracement, and the trend continues. I wonder if there is any merit in trailing the second AIMS level in order to allow winning trades to run longer? Has anyone tried this?

[KrisL]

OK, I have been informed that I uploaded the wrong chart above (USDJPY instead of EURJPY). Below are the correct charts.

eurjpy 2013_11_18.png

Reviewing the correct charts, I think both setups were actually valid. However, I remain open to all feedback and suggestions!

Apologies for the confusion.

[KrisL]

An interesting trading day today! I caught part of a nice move on the Aussie late in the afternoon here in Australia. Unfortunately I missed a few pips, as I had to leave the charts and go to rowing training. Before I left, I tightened my stops and set a fairly arbitrary TP level, which price blasted through in the end. Prior to leaving the charts, I was happy with my trade management though. I closed half my position once it reached 1:1, and then managed to leave my SL alone for a long time (or what seemed like a long time!), and only moving it to the 50% Fib retracement level of the most recent high (I read about this in Immy's post about The Seed). This trade management strategy seems to work really well for me. The power of managing a trade on progressively higher time frames (possible by using the Fib levels as Immy describes in his post) is truly incredible.

au 2013_11_19.png

I feel like I turned a small corner with this trade, as previously I have been super keen to move my SLs to protect my profits, and had been stopped out prematurely several times. Even though I missed a few pips at the end of this trade, I feel very positive about closing half the trade at 1:1, establishing the care-free mindset, and then just letting the market do what it needs to do.

Hope some other AIMSters caught this move as well!

[KrisL]

Thanks Sam.

I had a couple of rents on GU last night. The first was taken late into the M5 wave, which had also just shown divergence. Not a good trade, and a mistake to be avoided in the future. The second trade was a news trade, taken after waiting for the initial spike to consolidate and then continue. It didn't work out.

2013_11_20 gu.png

I have just opened a small live trading account, and these rents were my first live trades. They brought me back to earth after having some decent success trading demo. I also experienced a stronger emotional response than I expected, and even during these short-lived trades I found myself playing with the mouse and wanting to adjust SLs continuously. I need to learn to recreate the mental state that I found while trading demo. As Douglas describes it, "care-free", or confident but not euphoric, and free of fear, hesitation and compulsion.

[KrisL]

Also a couple of trades on the Aussie last night that didn't go anywhere. Looking at the trades this morning in hindsight, I should have paid greater attention to the HTF AIMS wave. Hindsight is a wonderful thing.

2013_11_20 au.png

[KrisL]

A couple of trades on AU yesterday that made a few pips, but never really took off. I managed these trades by closing 50% at 1:1 and then moving my stop loss to the 50% Fib retracement level and monitoring the 23 and 61% levels each time price made a new low.

2013_11_21 au.png

[KrisL]

Some EJ trades from yesterday too. I paid a couple of rents here, and looking back I can see that I tried to trade into the purple on M5. Obviously something to be avoided.

2013_11_21 ej1.png

2013_11_21 ej2.png