David's journal

[immy]

David

First of all thanks for sharing your thoughts. I really appreciate and love it when people really take trading seriously. Analyse themselves and their trading and then set a goal for future however vague it may sound its still progress.

secondly I have a question. What is a mistake?

[azadar]

Thanks Immy. To me a mistake is not following my rules.

The most common mistakes I make are:
- Taking a trade when price moved less than 1 pips outside an aims box. I should be using pending orders set at 1 pips beyond the box to avoid these costly false breakouts.
- Not taking a trade when an opportunity occurs.
- Trading wave 2 and 4
- Trading when I know I am not in the right mindset to be trading.
- Trading when I know the markets are not active enough.

When I dream about making a living as a trader, I picture how I would like a typical day of trading to be. Today I made this day a reality. Got up late (not at 3 am to catch LO), spent some time with my wife and son before they went to work/daycare and when they left I had breakfast while relaxing and reading a magazine. Made coffee and went to the computer to start my trading day. I watched the markets for 15 minutes and had a feeling price would be going higher. Saw a fruit and took the trade (picture below). Within 23 minutes I had made 64 effortless pips. After that I tried a fruit that I thought would get me into wave 5 but I got another fruit signal in the opposite direction and closed at BE. After one hour of trading I decided to call it a day since I was happy with my 64 pips. I spent the rest of the day doing other stuff (working out, cooking, watching tv series, reading Trading in the Zone).

I had a lot of time to think about this during the day and I came to realize that I was trying too hard to be profitable. I would spend too much time in front of my screen trying to make pips. I put so much pressure on myself that I was no longer having fun trading. The reason I decided to ditch my old job and trade for a living was to improve my quality of life and to have more free time to do other things I love doing. The only way I can do that is by trading less but by trading less I will enjoy the time I spend trading and be more focused during the few hours I am trading therefore increasing my chances of being successful. With the free time I will be able to do things I love which will make me happier and with a happier state of mind I will get better results trading.

Anyway just wanted to write down my thoughts, it helps me evolve into a better trader.

2014-11-03_2049.png

[azadar]

I am happy with the way I am trading this week. I made a few mistakes but I still traded well every day. This is a big improvement for me as I had a lot of problems trading well consistently. I feel like I am making huge progress. Nothing changed in my technical abilities, the only changes happening are in my head.

I will keep focusing on the psychological aspect of trading as Im already seeing positive results.

Here is a trade I took when I woke up this morning. It was effortless and pure fun watching price drop like that

2014-11-06_1446.png

[immy]

lovely trade... keep it up buddy! keep trading em. and don't forget to add on atleast once. thatis important.

[azadar]

Made some nice pips to end the week. Missed the move down but at least I got the move back up.

This has been my most consistent week of trading. There is still plenty of room for improvement but im still really happy about it.

Immy: yeah I usually add-on as in the picture below. It was a mistake not to add-on in my previous screenshot. As I said, plenty of room for improvement

2014-11-07_1207.png

[azadar]

I am still afraid.

I am afraid of failure, of having to go back to my other career instead of trading for a living.

This week has been tough mentally and on my equity curve. Lost most of the profits I had made in the last month. I was completely blinded by fear and could not see the setups.

The good news is its just a demo account. It gives me an opportunity to learn how to avoid and recover from those mental breakdowns when they happen. I also need to learn how to limit the damage I can do to my account if I ever go back into that state of mind.

I will focus on the teachings of Mark Douglas and do everything I can to eliminate fear from my trading.

[Dave]

One of the most important factors in trading successfully (in my opinion of course) is the appropriate management of losers. I've read somewhere before that your first loser is your best loser, and I interpret that as meaning that when it's time to admit the trade hasn't gone as intended, and the market is generating valid exit signals, then it's time to get out promptly and accept the small damage.
I agree with this statement for two reasons:
1. Hanging onto a losing position means we are hoping that, despite market generated information, that on this occasion we will get lucky. That the market will resume the direction we were hoping for. That just this time it'll come back and I'll get out at BE or with some profit. This thinking and trade management is not part of any successful professional traders approach or mindset.
2. Hanging onto a losing position blinds us to the market generated entry signal that occurs while we're hoping our losing position turns around. We miss the obvious entry and then watch the losing position go even further against us on what would have been a valid entry signal in the opposite direction. Holding a losing position clouds our view of the market and gives us an insurmountable bias.
If holding onto losers is part of your fear, then the simple action of always setting a stop loss and never ever allowing yourself to widen it will free your mind. You'll accept your losers, mentally say "next" and be open and prepared for the next valid entry.
My time at the charts has taught me that I have three main weaknesses that hold my trading back. I am reluctant to take the first loser - so I correct this by always having a stop loss and never widening it, only tightening it on market generated information. And after a loser I am too quick in wanting to jump back in to make back my loss - so I correct this by getting up after a loser and making a cup of tea. I walk to the kitchen and while the kettle is boiling I remind myself that losers are part of the business I am in. And when I'm short on time due to work or a social occasion I force an entry wanting to quickly get the job done - so I correct this by not even turning on the charts when I can't fully commit myself to the cause. I hope I don't have to battle these urges to trade against my plan forever, but if I have to I'll be well hydrated and have the antioxidants of a thousand tea bags!
Identify the specific moments/factors that cause you to trade with fear and find ways to manage and eliminate them.
Good luck!

[azadar]

Thanks Dave for the great feedback.

I like your approach of breaking down the main weaknesses and figuring out a way to compensate. I will think about this during the weekend and post back the main weaknesses and then try to find a way to fix them.

I share at least one of your weakness (trying to get a quick trade in when I know I wont have time to manage it). I came to the same conclusion and no longer look at the charts when I dont have enough time.

more to come...

[azadar]

Was away most of the day but managed a nice fruit trade with add-ons. +39 pips

2014-11-19_2140.png

[azadar]

Got an hour or so of trading in this morning. Missed out on a huge opportunity. Doesnt matter, there will be many more.

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