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Forex Junction

Look like US$ and Yen to rally way pass into 2009..

 

i'm quite consistent in my strategy and approach 

 

 

If a loss is bigger than a gain, then what's the strategy involved?

It doesn't make sense at all to play then.

Perhaps you have your reason to let the loss be bigger than a gain in this example which you gave?... . 

 

not much action this week .... i didn't like the charts and the patterns were not clear cut ... was doing sideways ... and with  'Historic' USA presidential elections, decided lie low and stayed on sidelines ...in between,  did 3 demo-trades when the patterns seemed clear and this week chalked net -23 pips .

0311    -95pips

0311    +46pips

0711    +26pips

 

 

article which i found useful on www.babypips.com

 

4 Psychological Pitfalls

1. The Desire to be Rich

The desire to be rich manifests itself in many ways. The main ways are fear and greed and they inevitably lead to other problems. If you think about it the majority of the issues newbie's have stem from the desire to be rich. Things such as:

1. Over trading


2. Poor money management by risking too much

Forex will not make you rich in the short term. It will likely take years before you're trading well enough to leave your day job. Forex is a career and in the long run, if you're successful, it can give you a very relaxed life. However, if you started trading last week and you plan to quit your job in six months, because you anticipate being rich enough to buy a Ferrari, you are delusional.

This is a career, not a get rich quick scheme. If you want to be rich quick hit the casinos. You have a better chance of winning there.

2. Fear of Losing

From a young age, we are taught that money is important. That without money you have no real value. We are conditioned into believing, that to be successful when we grow up, we must have lots of money. This in turn causes people to be afraid of losing money. This is because the reverse is also true. If you lost money then you are a failure as it is the opposite of making money. This in turn leads to some newbie traders being afraid to pull the trigger and actually taking a trade.
Some newbie's trade demo accounts for two years, never summoning the courage to open a live account. Some newbie traders with live accounts panic whenever they enter a trade and, in turn, make rash decisions.

Take a look at people like Richard Branson, Donald Trump, Alan Sugar and Warren Buffet. These guys are all billionaires (or close enough to it) and each of them has failed many times. Richard Branson has spearheaded many failed ventures. Did those failures set him back though? Hell no! The man is going to start flying people to space at $200k per head, next year, with Virgin Galactic.

I think losing some money to the markets is actually beneficial. It teaches you some very important lessons. What is damaging is the fear of losing money. The fact that you think about it puts you at much greater risk of it actually happening. You have to trade with a positive attitude. So get rid of those fears and worries, they will not do you any good.

The truth is you are going to lose money to the markets, it's unavoidable. Every professional trader has lost money. Not every trade will be profitable. The market simply doesn't always work in your favour, and there are times, especially as a newbie, that you will be stung. If you end up blowing your first live account... so be it. As long as you pick yourself up and try again, you will be a better trader for it. I blew two accounts before I started trading profitably.

3. The Need to be Right

This is a good one. Tom opens his platform and enters a dumb, baseless, long trade. He targets 100 pips and has a 50 pip stop loss. The trade goes against him immediately.

It goes down, first ten pips, then twenty pips, and then thirty pips. When it reaches fourty pips, Tom decides he doesn't want to lose another trade and moves his stoploss down.

The price keeps falling and Tom continues to move his stop.

100
120
150......

Eventually Tom closes out his trade and he has lost a huge portion of his account.

Tom was not able to accept that he has taken a losing trade. He kept pushing the stop down in the hope that it would eventually turn around. The need to be right is an account killer.

4. Being Undisciplined

I saved this one for last because, even though it is one of the most common and dangerous pitfalls, it is rarely discussed. A trader who lacks discipline can never make it in this business. Many traders are guilty of lacking discipline for many different reasons.

The main culprits are what I like to call 'System Jumpers'. These are traders that are constantly tweaking and changing their trading methods. These traders do not realize that learning to trade a system efficiently takes time.

System Jumpers are traders who lack the discipline to stick to, and learn how to trade, a system. They try it for a week and when it doesn't work they jump to the next system or method.

Another common action of an undisciplined trader is abandoning a perfectly good trading method. Every trading method has periods in which it performs below average. My trading method averages 80% winning trades however some months it drops down to 60%. This is because market conditions change. No matter how versatile a method is it cannot perform, at peak efficiency in all market conditions. A true trader has the discipline to stick it out through the hard times.

 

iPunter  : )

wise words indeed . thank you : )

 

One cannot go on indefinitely doing 'demo trading' , especially when one's results are good...


But it is important to trade the same amounts when one is 'graduating' to live trading not more, nor less...

If this is not done, live trading will 'go haywire', since our whole mental system will be affected when
a different psychological perspective takes over...  
 

 

CWQuah :

Thank you very much for ur kind words and encouragement  : ) 

You are right and that's precisely the strategy I would like to adopt in following with Master Techsys' strategy.

The 4 lots is to do the first 2lots at 20 pips and the next 2 lots at 40 pips or more ( 2x20 +2x40 = 120pips ). But most of the time , I cut off at the original 4 lots after hitting the 20pips (4x20=80pips) due to dragging of time or when I have to attend to my regular chores or when feel my original view might be wrong .

Actually, for practise ,the 4 is just an arbitary number , could might as well do 2 lots and break up as 1+1 instead of 2+2 ..... besides it gives a nice number of $1000 for 4x20 pips ... hahaha !


Definitely , I must work real hard on the stop-loss. This seems to be my weakness !

Once again, thank you !




 

 

Baseerahmed,

It's abt time to turn to real trading :-) Nice trading record, keep it up.

Just gotta keep stops real tight; preferably stops should be 15-20 pips max from entry while limit orders around 30-40 pips away from entry; the other way is to take 2 std lots profit first when you hit the 20pip level, take profit at another std lot each at 30pip & 40 pip level or where you anticipate strong support/resistance (I observe your demo lot size is always 4 lots).

It keeps the mathematical odds of getting a profitable trade on your side, and I suppose less stress/risk after you secure the first 2 X 20 = 40 pips.

 

 

 

and finally , month end summary :

 

 

caveat emptor -- demo-trade by novice -- past performance is no indication of future performance

 

Demo Trade on UJ by novice

Fri3110 : buy : in 97.84 out 98.04 = 20 x 4 =  80pips


caveat emptor

 

edit : 

Demo Trade on UJ by novice

Thu3010 : buy : in 98.67 out 98.11 = -56 x 4 =  - 224pips
Thu3010 : sell : in 97.82 out 9793 = -11 x 4 =    - 44 pips   total : -268pips

caveat emptor

--------------------------

trade 1 : anticipated an ascending triangle on the 1hr chart .... laxed on stop loss
trade 2 : anticipated break of support at 23.6 fibo ... triggered stop loss

 

Demo Trade on UJ by novice

Thu3010 : buy : in 98.67 out 98.11 = -56 x 4 =  - 224pips
Wed2910 : sell : in 97.82 out 9793 = -11 x 4 =    - 44 pips   total : -268pips

caveat emptor

--------------------------

trade 1 : anticipated an ascending triangle on the 1hr chart .... laxed on stop loss


trade 2 : break support at 23.6 fibo ... triggered stop loss

 

CWQuah :  good job !

 

It was fun playing the support break at 97.00 and buyback at 96.70 (see the 15min chart at/around 2am-2.30am) during the FOMC announcement. 3 trades in like, 5-10 mins. Managed to catch a total of 80+ pips.

 

Demo Trade on UJ by novice

Wed3010 : sell : in 96.80 out 96.70 = 10 x 4 = 40 pips

caveat emptor

------------------------

think i need to cool-off  after this hallowen ride ... hahaha !

 

phew ! a lucky break ! the limit order did get through .... what began as a routine turned into an almost a nightmare ... was getting scary and panicky as my view did not come true ..was thinking of sideways between the fibos .... at 2.15pm est , fomc was coming around .... was willing to cut-off this week's gain manually ...the ticket was still showing the current prices then ....  but didn't know that the system will be down .... wish they made alerts just before the 'cut' ... like interbankfx does on important matters ... in fact got anxious when ibfx alerted of the fomc ....

well .... another lucky break this week ...... selamat .... hope i get such lucky breaks in real trading too .... : )

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