Bad Assed Trader: It's been an instructive two weeks, she said positively. As I've been saying for a little while to anyone who's cared to ask, I'm learning rather than earning.
I sneaked back onto my broker's trading platform a week ahead of plan and had a few interesting experiences. I had an instructive one with a short trade on sterling (GBP USD) when I moved my stop loss too quickly and got stopped out for a profit of £22 when if I'd left it where it was I'd have hit my profit target of 1% (about £110) but if I'd managed the trade differently I could have made twice that.
A week later I put a short trade on the Euro (EUR USD) which I closed prematurely for a profit of £9.74 when price wasn't going anywhere only to see price tank to my 1% target and beyond.
Oh these are the classic errors of trading! I've read all about them and yet have I learnt? Well, it's still early days, I'm still considered "fresh meat" so I guess it's inevitable. But I am tapping my head and telling myself that I have to mend the error of my ways, I don't want to keep making the same mistakes over and over again, it's just not profitable and that is, after all, the point of me doing this stuff.
The following day (we're up to 12 Jan now) I caught the beginning of a massive move on sterling. This time I was flawless and took my 1% profit. It's been difficult accepting this was a good move though because I watched price continue to rise, without dropping below technical levels (the 50 day moving average line) at which I would have taken the trade out if I was managing it. The little sod went all the way up about 6% - that would have netted me over £650 if I'd stayed in it.
It's a tricky game to be sure.
The long and short of it all is that my wins to losses are 1:2 which is not good. So I'm doing serious reflection. The failing is with me, without doubt, and I have to raise my game.
So I had a coaching session with a senior trader who is helping me onto the straight and narrow. He has given me clear instructions which I am now following to the letter. We have agreed that I am sticking to one trading strategy. I have very clear rules which I must stick to for entering, managing and exiting the trade. If I see these criteria met then I take the trade.
I have to do 30 perfect trades following this plan. If I fail to follow the rules precisely then I must start again, that is the punishment.
I have been following this agreed plan for a week and a day. I thought I might be able to do it on the second go, chances were I would mess up on at least one trade before I hit 30. I'm on my fourth try - I did 8 trades and then realised I'd broken a rule on trade 6, start again. I did one trade and then realised I hadn't strictly followed the rules. Third time lucky. Three trades later and I've clicked "buy" 2 minutes ahead of plan. Start again. I've now taken 12 trades without error, I believe. I will be reviewing them tomorrow, scrutinising them for any errors and I will be hard on myself.
It sounds awful doesn't it? But I'm loving it! I left that coach feeling liberated and sure of what to do which has been wonderful after tarting myself around with every currency pair and strategy in the book. Now I know what to do and I'm just doing it.
At the same time I reduced by over a third the amount I am risking each time and I won't increase it until I'm consistently winning more than I'm losing. So far I'm improved my performance to 1:1 wins to losses and they're the same value so I'm exactly where I've started. BUT I've realised that as I'm continuing with the same strategy I'm starting to spot what works and what doesn't better and that's helping me to filter out some of the less likely trades.
And I've also finally discovered my trading personality, something I'll share a bit more about in my next blog.
Oh and the news on the impending redundancy.
Isn't life exciting....?!
I sneaked back onto my broker's trading platform a week ahead of plan and had a few interesting experiences. I had an instructive one with a short trade on sterling (GBP USD) when I moved my stop loss too quickly and got stopped out for a profit of £22 when if I'd left it where it was I'd have hit my profit target of 1% (about £110) but if I'd managed the trade differently I could have made twice that.
A week later I put a short trade on the Euro (EUR USD) which I closed prematurely for a profit of £9.74 when price wasn't going anywhere only to see price tank to my 1% target and beyond.
Oh these are the classic errors of trading! I've read all about them and yet have I learnt? Well, it's still early days, I'm still considered "fresh meat" so I guess it's inevitable. But I am tapping my head and telling myself that I have to mend the error of my ways, I don't want to keep making the same mistakes over and over again, it's just not profitable and that is, after all, the point of me doing this stuff.
The following day (we're up to 12 Jan now) I caught the beginning of a massive move on sterling. This time I was flawless and took my 1% profit. It's been difficult accepting this was a good move though because I watched price continue to rise, without dropping below technical levels (the 50 day moving average line) at which I would have taken the trade out if I was managing it. The little sod went all the way up about 6% - that would have netted me over £650 if I'd stayed in it.
It's a tricky game to be sure.
The long and short of it all is that my wins to losses are 1:2 which is not good. So I'm doing serious reflection. The failing is with me, without doubt, and I have to raise my game.
So I had a coaching session with a senior trader who is helping me onto the straight and narrow. He has given me clear instructions which I am now following to the letter. We have agreed that I am sticking to one trading strategy. I have very clear rules which I must stick to for entering, managing and exiting the trade. If I see these criteria met then I take the trade.
I have to do 30 perfect trades following this plan. If I fail to follow the rules precisely then I must start again, that is the punishment.
I have been following this agreed plan for a week and a day. I thought I might be able to do it on the second go, chances were I would mess up on at least one trade before I hit 30. I'm on my fourth try - I did 8 trades and then realised I'd broken a rule on trade 6, start again. I did one trade and then realised I hadn't strictly followed the rules. Third time lucky. Three trades later and I've clicked "buy" 2 minutes ahead of plan. Start again. I've now taken 12 trades without error, I believe. I will be reviewing them tomorrow, scrutinising them for any errors and I will be hard on myself.
It sounds awful doesn't it? But I'm loving it! I left that coach feeling liberated and sure of what to do which has been wonderful after tarting myself around with every currency pair and strategy in the book. Now I know what to do and I'm just doing it.
At the same time I reduced by over a third the amount I am risking each time and I won't increase it until I'm consistently winning more than I'm losing. So far I'm improved my performance to 1:1 wins to losses and they're the same value so I'm exactly where I've started. BUT I've realised that as I'm continuing with the same strategy I'm starting to spot what works and what doesn't better and that's helping me to filter out some of the less likely trades.
And I've also finally discovered my trading personality, something I'll share a bit more about in my next blog.
Oh and the news on the impending redundancy.
Isn't life exciting....?!
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