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The title is a quote from "James16", the creator of the james 16 chart thread on forexfactory.com. I won't talk too much about that thread because I've already mentioned it in this post . Words won't even do justice to how valuable the info in that thread is so I won't even try, but I'll just say if you're a new trader or even a trader that's been trading for a while but struggling, read it. Read the first post at least, and then see how you feel.
Back to the quote, it's from a post James made, when he talks about the nightmare he experienced in his trading career. Took him 8 years and a lot of blown accounts to be successful but what he's saying is it doesn't have to be that way. You can be like most people and spend crazy money on systems, robots, seminars and keep losing. James talks about how he cried himself to sleep on his desk because of huge losses. You don't have to go through hell like he did. Read the thread and your journey will be a lot easier. A lot of people that visit the thread ask for a quick summary. There is no shortcut. 8327 pages long (and counting). It's free. It's golden information, but it's a job to go through it all. I'm on page 130. I spent a few hours on it today but I intend to complete it. If that's what it takes to be succesful, that's what I'll do.
Here's the thread.
http://www.forexfactory.com/showthread.php?t=2331
Monday 22 April 2013
Sunday 21 April 2013
19/04/2013 AUD/JPY long (Break even)
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Here is my entry chart for this trade which explains everything (click to enlarge). Risk was 0.5% of my account.
and here's the exit chart. I just got out at break even since that's where price was hovering towards the close and since it was a friday I didn't wanna hold the trade over the weekend.
Here is my entry chart for this trade which explains everything (click to enlarge). Risk was 0.5% of my account.
and here's the exit chart. I just got out at break even since that's where price was hovering towards the close and since it was a friday I didn't wanna hold the trade over the weekend.
19/04/2013 GBP/CAD long (win)
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This trade pissed me off. Here's my entry chart (click to enlarge). Risk on this was 1% of my account.
and here's the exit chart.
This trade pissed me off. Here's my entry chart (click to enlarge). Risk on this was 1% of my account.
and here's the exit chart.
So what did I learn from this trade? If you see a signal that the trade may not work out, take action! Don't just hope for this best like I did. People don't like to take a loss and because I didn't want to take a smaller loss I held on and in the end took a full loss. 1% of my account.
Tuesday 16 April 2013
15/04/2013 AUD/NZD Short (Break even)
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This is another trade based on the 3 time frame strategy (explained here). Here is my entry chart (click to enlarge). Risk was 0.5% off account, aiming for 3:1 RR (1.5% gain).
Now the plan on these type of trades is to move stop to break even once you hit 1:1 RR. In this case price didn't quite hit 1:1 but was close to reaching it so I decided to move my stop to break even anyway. Now the spread on this pair has been acting like an asshole. One second it's 4.5pips, the next it's 10 pips. Price went up and I was taken out. Spreads must've widened because looking at the chart I should still be in.
In any case it's not a surprise because most trades based on this strategy end up break even. According to my back testing the win rate is around 35-40%.
This is another trade based on the 3 time frame strategy (explained here). Here is my entry chart (click to enlarge). Risk was 0.5% off account, aiming for 3:1 RR (1.5% gain).
Now the plan on these type of trades is to move stop to break even once you hit 1:1 RR. In this case price didn't quite hit 1:1 but was close to reaching it so I decided to move my stop to break even anyway. Now the spread on this pair has been acting like an asshole. One second it's 4.5pips, the next it's 10 pips. Price went up and I was taken out. Spreads must've widened because looking at the chart I should still be in.
In any case it's not a surprise because most trades based on this strategy end up break even. According to my back testing the win rate is around 35-40%.
09/04/2013 GBP/USD long (loss)
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This was a long trade off the weely chart. I actually opened 3 different positions on this, which the chart doesn't show you. Anyway, my entry prices were 1.5260, 1.5368 and 1.5371. Here is the entry chart (click to enlarge). Each position was 0.25% of my account so total risk was 0.75%. Note: I forgot to mark my stop losses on the chart so the chart won't show them.
and here is my exit chart. The first position I closed at 1.5348 for a small profit, and the other two I closed at 1.5288 for small losses. Overall, I made a loss of 0.15%.
Note: My stop losses were NOT hit. I closed the trades manually because I was hoping for a fast push upwards off the BUOB and we didn't get it. We also had a close below the RN of 1.5300 at the close of the NY session on 15/04/2013. Maybe I should have held on, but the thing is I'm very inexperienced at playing weekly time frames. I'll get better at these with experience. It was a bit of a joke trade in the end but not much harm done to account at least.
This was a long trade off the weely chart. I actually opened 3 different positions on this, which the chart doesn't show you. Anyway, my entry prices were 1.5260, 1.5368 and 1.5371. Here is the entry chart (click to enlarge). Each position was 0.25% of my account so total risk was 0.75%. Note: I forgot to mark my stop losses on the chart so the chart won't show them.
and here is my exit chart. The first position I closed at 1.5348 for a small profit, and the other two I closed at 1.5288 for small losses. Overall, I made a loss of 0.15%.
Note: My stop losses were NOT hit. I closed the trades manually because I was hoping for a fast push upwards off the BUOB and we didn't get it. We also had a close below the RN of 1.5300 at the close of the NY session on 15/04/2013. Maybe I should have held on, but the thing is I'm very inexperienced at playing weekly time frames. I'll get better at these with experience. It was a bit of a joke trade in the end but not much harm done to account at least.
Wednesday 10 April 2013
09/04/2013 NZD/CHF long (win)
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Here's a trade I entered yesterday and closed today for a profit. Here is my entry chart explaining reasons for trade (click chart to enlarge). Risk was 0.5%, no fixed profit target.
Here is the exit chart. I made 0.31% or 65 pips on this trade. Entry was 0.7931 and exit was 0.7996.
Here's a trade I entered yesterday and closed today for a profit. Here is my entry chart explaining reasons for trade (click chart to enlarge). Risk was 0.5%, no fixed profit target.
Here is the exit chart. I made 0.31% or 65 pips on this trade. Entry was 0.7931 and exit was 0.7996.
Monday 8 April 2013
08/04/2013 EUR/CAD long (win)
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Here is a long trade off the H4 chart. Risk was 0.5% off account, no fixed profit target. Here is the entry chart explaining entry reasons (click to enlarge).
and here is the exit chart. I took full profit after the close of the bearish pin. Just under 1:1 RR. Not a bad result.
Here is a long trade off the H4 chart. Risk was 0.5% off account, no fixed profit target. Here is the entry chart explaining entry reasons (click to enlarge).
and here is the exit chart. I took full profit after the close of the bearish pin. Just under 1:1 RR. Not a bad result.
Sunday 7 April 2013
04/04/2013 USD/CAD Short (break even)
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Another trade based on the 3 time frame strategy (explained here). Risk was 0.5%, aiming for 3:1 RR. Here is the entry chart (click to enlarge).
and here is the exit chart. As you can see, price went down and hit 1:1 RR. At this point my stop loss was moved to break even and price went back up and stopped me out. Most trades using this strategy will end up at break even.
Another trade based on the 3 time frame strategy (explained here). Risk was 0.5%, aiming for 3:1 RR. Here is the entry chart (click to enlarge).
and here is the exit chart. As you can see, price went down and hit 1:1 RR. At this point my stop loss was moved to break even and price went back up and stopped me out. Most trades using this strategy will end up at break even.
04/04/2013 NZD/CHF Long (loss)
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This trade was based on the 3 time frame strategy (explained here ). Risk was 0.5%, aiming for 3:1 RR. Here is the entry chart (click to enlarge)
and here is the exit chart. As you can see, price went down and stopped me out.
Wednesday 3 April 2013
Trading in the Zone by Mark Douglas review
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Last month I was reading a thread on forex factory. An aspiring trader who had just started demo trading was talking about some trades that he'd made. Even though he was only demo trading he was getting very emotional about them. When he lost a couple of trades it bothered him a lot. Some of the more experienced traders told him he had no chance if he was going to get so emotional about demo trading. What would he be like if he was trading with real money? He'd be an emotional wreck. He was told to read a book called "trading in the zone" by Mark Douglas to learn more about trading psychology.
I decided to check it out too. Anyway, I read this book and it's by far the best book on trading I've ever read. In fact I'd say it's a must read for any aspiring trader. You won't find any trading systems or anything like that, as it's purely to do with trading psychology. 143 pages. It goes into great detail on the type of mindset most traders will have, and how this mindset comes about. It then goes on to explain why this type of thinking will sabotage your trading. Finally, it explains exactly how a winning trader thinks, and how to acquire this type of mindset.
It changed my perspective on trading in a major way. See, when you go on a losing run, sometimes it's easy to think that the market is against you personally. Like every position you take, the market will do the opposite just to screw you. In the past, whenever I've talked about trading, written about it, tweeted about it etc I've spoken about trying to beat the market. Defeat it. Break it down. Conquer it. Like it's an enemy. Like it's against me. It's not. The market is neutral, although I'll still continue to use speak of the market as an enemy for dramatic effect and entertainment. There are millions of traders all over the world and each trader will have his own opinion of the market. The market can't possibly know the opinion of each and every trader, and even if it did, it couldn't please everyone. All it does is provide opportunities, and it's up to each individual trader to be open to these opportunities. If the trader is thinking in the right way, he'll see the market objectively as it is. Otherwise, he'll be thinking emotionally. The only thing to "defeat" or "conquer" is my own mind, not the market. The other thing to accept is that there are so many things that affect the market that you don't have to be correct. You don't have to be right, or be a great analyst to make money.
Anyway, read the book, you won't regret it. The only criticism I have is that it waffles on a little bit too much at times (I know a bit like this post), but it's only a minor annoyance. There's one very good casino analogy in this book which for me was like a Eureka moment. I'm sure you've heard many people say "trading is gambling". Here's the thing. Blackjack is gambling. So is poker. So is roulette. When the casino plays these games against the customers, the casino is gambling. The casino is not guaranteed that it will beat me in a game of blackjack. However, the casino always makes a profit in the end. Year after year, without fail, the casino will make a profit. Why? Because the casino has an edge. That's the contradiction here. Each game of blackjack is a risk, because you don't know if you'll win or lose, but in the end, profit is pretty much a certainty for the casino because of the edge. Trading is no different. You need an edge. Once you have that edge you need the right mindset to follow that edge through objectively. Then you become a consistent winner. You don't know if a single trade will win or lose, but you must be supremely confident that in the end, you will end up with profit.
That makes it sound pretty simple, but it's not as easy as I make it sound there. Still, the way I see it is that if you want it badly enough, you can make it work. Anyway, enough about the book, let me give you an update about my trading.
So as you know, January was a profitable month for me, while Feb and March were not. Been following the same systems I've back tested. Back testing produced great results (although there were periods of drawdown). The same results have not been replicated in real trading. One of my systems has worked great in real trading, but the other one not so much, With back testing I had a win rate of around 40% at 2:1 RR with this particular system. Now in real time I must have made around 50 trades since, with probably around 15 winners and the rest losing. Maybe it's not a large enough sample size. Maybe I just need to stick it out. The thing is though, I'm not 100% confident, and therefore it's best to go back to demo trading that system. I've only been risking 0.5% per trade. Had I risked the 2%? I'd have probably been driven to heavy drinking
by now. The drawdown is a bitch. Again, this doesn't mean there's anything wrong with the system, it just means that at this point in time, I can't be doing with heavy drawdown. It's just stress that I don't need.
So that system will be demo traded for now, while for live trading I'll go back to the J16 method of trading. J16 is is a thread on forex factory, started by a user called James16.
http://www.forexfactory.com/showthread.php?t=2331
The thread is all about price action trading using discretion. It encourages being very picky about trades, thus having a high win rate. I've used it in the past with some success, but now it's time to get serious. The thing is, because it encourages traders to be picky, the win rate will be higher. This breeds confidence, which is just what I need at this point in my trading career. Ton of info in that thread, and very good advice from experienced, consistently profitable traders. Trading "systems" will never be fool proof. There is no holy grail. Mechanical systems sound appealing but if you know price action and learn to use discretion, you can use it under any market conditions, and it'll serve you well for the rest of your trading career. Can't say that about systems.
Anyway, this post has been too long as it is. Here's the link to "trading in the zone" by Mark Douglas
http://www.amazon.com/Trading-Zone-Confidence-Discipline-Attitude/dp/0735201447/ref=sr_1_1?ie=UTF8&qid=1365021191&sr=8-1&keywords=trading+in+the+zone
Last month I was reading a thread on forex factory. An aspiring trader who had just started demo trading was talking about some trades that he'd made. Even though he was only demo trading he was getting very emotional about them. When he lost a couple of trades it bothered him a lot. Some of the more experienced traders told him he had no chance if he was going to get so emotional about demo trading. What would he be like if he was trading with real money? He'd be an emotional wreck. He was told to read a book called "trading in the zone" by Mark Douglas to learn more about trading psychology.
I decided to check it out too. Anyway, I read this book and it's by far the best book on trading I've ever read. In fact I'd say it's a must read for any aspiring trader. You won't find any trading systems or anything like that, as it's purely to do with trading psychology. 143 pages. It goes into great detail on the type of mindset most traders will have, and how this mindset comes about. It then goes on to explain why this type of thinking will sabotage your trading. Finally, it explains exactly how a winning trader thinks, and how to acquire this type of mindset.
It changed my perspective on trading in a major way. See, when you go on a losing run, sometimes it's easy to think that the market is against you personally. Like every position you take, the market will do the opposite just to screw you. In the past, whenever I've talked about trading, written about it, tweeted about it etc I've spoken about trying to beat the market. Defeat it. Break it down. Conquer it. Like it's an enemy. Like it's against me. It's not. The market is neutral, although I'll still continue to use speak of the market as an enemy for dramatic effect and entertainment. There are millions of traders all over the world and each trader will have his own opinion of the market. The market can't possibly know the opinion of each and every trader, and even if it did, it couldn't please everyone. All it does is provide opportunities, and it's up to each individual trader to be open to these opportunities. If the trader is thinking in the right way, he'll see the market objectively as it is. Otherwise, he'll be thinking emotionally. The only thing to "defeat" or "conquer" is my own mind, not the market. The other thing to accept is that there are so many things that affect the market that you don't have to be correct. You don't have to be right, or be a great analyst to make money.
Anyway, read the book, you won't regret it. The only criticism I have is that it waffles on a little bit too much at times (I know a bit like this post), but it's only a minor annoyance. There's one very good casino analogy in this book which for me was like a Eureka moment. I'm sure you've heard many people say "trading is gambling". Here's the thing. Blackjack is gambling. So is poker. So is roulette. When the casino plays these games against the customers, the casino is gambling. The casino is not guaranteed that it will beat me in a game of blackjack. However, the casino always makes a profit in the end. Year after year, without fail, the casino will make a profit. Why? Because the casino has an edge. That's the contradiction here. Each game of blackjack is a risk, because you don't know if you'll win or lose, but in the end, profit is pretty much a certainty for the casino because of the edge. Trading is no different. You need an edge. Once you have that edge you need the right mindset to follow that edge through objectively. Then you become a consistent winner. You don't know if a single trade will win or lose, but you must be supremely confident that in the end, you will end up with profit.
That makes it sound pretty simple, but it's not as easy as I make it sound there. Still, the way I see it is that if you want it badly enough, you can make it work. Anyway, enough about the book, let me give you an update about my trading.
So as you know, January was a profitable month for me, while Feb and March were not. Been following the same systems I've back tested. Back testing produced great results (although there were periods of drawdown). The same results have not been replicated in real trading. One of my systems has worked great in real trading, but the other one not so much, With back testing I had a win rate of around 40% at 2:1 RR with this particular system. Now in real time I must have made around 50 trades since, with probably around 15 winners and the rest losing. Maybe it's not a large enough sample size. Maybe I just need to stick it out. The thing is though, I'm not 100% confident, and therefore it's best to go back to demo trading that system. I've only been risking 0.5% per trade. Had I risked the 2%? I'd have probably been driven to heavy drinking
by now. The drawdown is a bitch. Again, this doesn't mean there's anything wrong with the system, it just means that at this point in time, I can't be doing with heavy drawdown. It's just stress that I don't need.
So that system will be demo traded for now, while for live trading I'll go back to the J16 method of trading. J16 is is a thread on forex factory, started by a user called James16.
http://www.forexfactory.com/showthread.php?t=2331
The thread is all about price action trading using discretion. It encourages being very picky about trades, thus having a high win rate. I've used it in the past with some success, but now it's time to get serious. The thing is, because it encourages traders to be picky, the win rate will be higher. This breeds confidence, which is just what I need at this point in my trading career. Ton of info in that thread, and very good advice from experienced, consistently profitable traders. Trading "systems" will never be fool proof. There is no holy grail. Mechanical systems sound appealing but if you know price action and learn to use discretion, you can use it under any market conditions, and it'll serve you well for the rest of your trading career. Can't say that about systems.
Anyway, this post has been too long as it is. Here's the link to "trading in the zone" by Mark Douglas
http://www.amazon.com/Trading-Zone-Confidence-Discipline-Attitude/dp/0735201447/ref=sr_1_1?ie=UTF8&qid=1365021191&sr=8-1&keywords=trading+in+the+zone
03/03/2013-USD/JPY log (win)
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Another trade using the J16 method. This was off the H4 chart. A BEOB off a horizontal level, trendline and 61 fib level (not shown on chart). Risk was again 0.5% off the account, with no fixed profit target.
Very quick trade this one, I was in and out quickly. Didn't even last an hour. I took my profit at the area shown. Just under 1:1 RR.
Another trade using the J16 method. This was off the H4 chart. A BEOB off a horizontal level, trendline and 61 fib level (not shown on chart). Risk was again 0.5% off the account, with no fixed profit target.
Very quick trade this one, I was in and out quickly. Didn't even last an hour. I took my profit at the area shown. Just under 1:1 RR.
It may still continue down, but I didn't want to get too greedy. Just happy to take some profit on this one.
01-03-2013-GBP/AUD long Loss.
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I've decided to go back to the J16 style of trading (more on that in a later blog post). Here's a long trade I took off the weekly chart. There was a minor fakey off a decent weekly horizontal level. Risk was 0.5%, with no fixed profit target, although I have marked the FTA (first trouble area) on the chart.
and here is the exit chart. As you can see, the fakey failed and took me out for a loss.
The J16 method calls for an evaluation of your trades. Now I don't think this was a bad trade to take. Sure, a minor fakey is not as good as a major one, but it was still off a good level, so it wasn't the worst one to take. I took the loss on the chin and moved onto the next one.
Monday 1 April 2013
RE: Quitting trading...
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So last night I told you I'd quit trading and I had one last post to make. Well guess what?...
April fools fuckers!
"I just read your post mate. I'll be in town at 12 if there's any changing your mind"...
Quit trading? I'll quit when I'm done tired of winning is when I'll quit.
There's just no way that could happen. As for that thing I was gonna mention about hedge funds. The only thing I gotta say about hedge funds is: Anton, kiss my ass. I hope you reading. And you know you a bitch don't you? quit protecting lexy or lex, I mean Lexina "asshole" van damme.
By the way, I just put in a long order on GBP/AUD. Have a great trading month.
So last night I told you I'd quit trading and I had one last post to make. Well guess what?...
April fools fuckers!
"I just read your post mate. I'll be in town at 12 if there's any changing your mind"...
Quit trading? I'll quit when I'm done tired of winning is when I'll quit.
There's just no way that could happen. As for that thing I was gonna mention about hedge funds. The only thing I gotta say about hedge funds is: Anton, kiss my ass. I hope you reading. And you know you a bitch don't you? quit protecting lexy or lex, I mean Lexina "asshole" van damme.
By the way, I just put in a long order on GBP/AUD. Have a great trading month.
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