Bad Assed Trader: It feels trite to be blogging about trading when across the other side of the world people are struggling to survive in the aftermath of two disasters and experiencing a third. The rim of fire has suffered enormously with the quake in New Zealand, the floods in Australia and now hell unleashed in Japan.
And all the while people in many other countries continue to suffer appalling living conditions, oppression by their states or other sections of their community, violence, poverty and disease. It is a mad world and although I may be facing redundancy due to public sector cuts and my trading may be a long hard struggle for success these are trifles compared to what others are soldiering through, I have no illusion on that.
But I am here to blog and blog I must, if only to make my own small trials and tribulations public for those who are interested and to make myself act on the commitments I know I need to make. Getting the hang of this level of discipline is not easy for someone of my rather rebellious and wayward nature and I need all the help I can get.
It's been a tricky week to trade. I clocked on last Friday morning at about 6.15am to see some violent movement on everything related to the Japanese yen which sent alarm bells ringing. I went straight to forexfactory.com to check for expected news from Japan, there was nothing. I checked on my trading platform for live news and spotted some feeds about a quake. So on went the TV - it was amazing how little there was on the mainstream channels and it wasn't until my husband came down an hour later with his superior ability to wrestle additional channels from our TV set that I really got the measure of what was unfolding. Pure horror.
I don't trade news so I was off to work then to earn my increasingly stale crust. I sat out Monday to give things time to settle and Tuesday I was back at my trading desk ready to take set ups that didn't involve the yen. Like many novice traders I had assumed that the yen would drop in value due to the uncertain economic health of a country under so much stress. It did, initially, but then of course the Japanese started liquidating their assets (ie selling their investments in shares and other currencies) around the world to free up cash to start rebuilding the disaster zones.
Cashing in their investments led to the Nikkei (Tokyo's stock index) dropping like a stone, wiping away value accumulated over 8 months over the course of just 3 days. But the extent of Japanese investment across the world also becomes apparent when they start to cash it in over the period of a few days. Buying the yen meant selling the other currencies and the drop in value of the Aussie dollar, Euro and US dollar compared to the yen was spectacular. For example, the picture below shows starkly how 10% was wiped off the value of the Aussie dollar compared to the yen from Friday morning to Wednesday evening.
As I write it has recovered about a third of that drop.
Perhaps I should have stayed out of trading until today, but I like to stay "in the zone" and up to speed with the movements as much as possible, if only to train my brain to start to understand the way price acts and to spot repetitions and patterns. So although I stayed away on Monday I was back in on Tuesday looking for my usual set ups.
As a result, I've had choppy performance as currencies have behaved somewhat oddly. Three trades on Tuesday left me with a net loss of 1% (still a tenner). Wednesday was the same with two losers and one winner. I was on my Q run (my 17th attempt to spot and manage 30 perfect trades) on Tuesday and Wednesday but unfortunately I broke my rules on Wednesday afternoon when I took a Euro trade that did not have "sharp shoulders" on its W shape and so I've had to move onto R. That rule breaker took my performance on Wednesday from break even to 1% down.
This morning I've been trading too much I suspect. My first trade was great, I caught a fast moving sniper short on Euro Swissy (EUR CHF) that hit my target 20 pips in 4 minutes.
But as is often the way with trading, in my excitement I then spotted a short trade on Aussie against the US dollar (AUD USD) and accidentally clicked into the trade before checking whether it had properly retraced on the hourly chart to be bouncing off the 50 moving average as per my rules. Oooops. Why am I not surprised that 40 minutes later I was out of that trade 1% down. Keep those itchy fingers under control girl!
This was then followed by a long sniper on Euro pound (EUR GBP) which technically followed my rules but which failed when the pound changed its mind about its direction of travel and started to head right back up again after what seemed to be an emerging down trend. I remind myself that cable, as we call it, is an erratic, choppy currency which can be unpredictable and is not my currency of first choice.
Which brings me neatly to my final trade of today - my trading currency of choice, the good old Euro against the dollar. When it moves it really moves and today I caught a lovely move. But if I hadn't been greedy I would have done much better out of the trade.
I took the trade as a long sniper at 07:12am and initially set a good target which was 94 pips away from my entry (nearly 5%) but justifiable based on price action. There was then a good move up and price pushed through an earlier possible line of resistance with no difficulty and started to move even more quickly. At that point I got excited - yes, the alarm bells should have started ringing right then - and thought that as price was moving so fast I could move my target to an even higher technical point, 124 pips away from my entry (over 6%).
Confession time. That was greed kicking in. And they say you should plan your trade and then trade your plan. If I had stuck to my plan those 94 pips would now be mine - £47. Instead, I set the new target and moved my stop loss up. To be fair, I moved it up to a reasonable technical point but after a couple of hours of fuffling around price dropped to my stop loss and took me out. I netted 50 pips (2.5%) which was not bad and wiped out almost all my losses for the week. I'm now just 0.5% down, or a fiver in layman's terms.
I confess to this greed publicly as a way of punishing myself for moving my target when it was a good target anyway. I am still learning. About myself as well as this dark art. Next time, I tell myself, I will stick to my plan.
My coach Emmanuel tells me it's a Fine Line between profit and loss in trading.
That Fine Line between me being 0.5% down or 1.7% up on the week was purely down to greed today...
And all the while people in many other countries continue to suffer appalling living conditions, oppression by their states or other sections of their community, violence, poverty and disease. It is a mad world and although I may be facing redundancy due to public sector cuts and my trading may be a long hard struggle for success these are trifles compared to what others are soldiering through, I have no illusion on that.
But I am here to blog and blog I must, if only to make my own small trials and tribulations public for those who are interested and to make myself act on the commitments I know I need to make. Getting the hang of this level of discipline is not easy for someone of my rather rebellious and wayward nature and I need all the help I can get.
It's been a tricky week to trade. I clocked on last Friday morning at about 6.15am to see some violent movement on everything related to the Japanese yen which sent alarm bells ringing. I went straight to forexfactory.com to check for expected news from Japan, there was nothing. I checked on my trading platform for live news and spotted some feeds about a quake. So on went the TV - it was amazing how little there was on the mainstream channels and it wasn't until my husband came down an hour later with his superior ability to wrestle additional channels from our TV set that I really got the measure of what was unfolding. Pure horror.
I don't trade news so I was off to work then to earn my increasingly stale crust. I sat out Monday to give things time to settle and Tuesday I was back at my trading desk ready to take set ups that didn't involve the yen. Like many novice traders I had assumed that the yen would drop in value due to the uncertain economic health of a country under so much stress. It did, initially, but then of course the Japanese started liquidating their assets (ie selling their investments in shares and other currencies) around the world to free up cash to start rebuilding the disaster zones.
Cashing in their investments led to the Nikkei (Tokyo's stock index) dropping like a stone, wiping away value accumulated over 8 months over the course of just 3 days. But the extent of Japanese investment across the world also becomes apparent when they start to cash it in over the period of a few days. Buying the yen meant selling the other currencies and the drop in value of the Aussie dollar, Euro and US dollar compared to the yen was spectacular. For example, the picture below shows starkly how 10% was wiped off the value of the Aussie dollar compared to the yen from Friday morning to Wednesday evening.
As I write it has recovered about a third of that drop.
Perhaps I should have stayed out of trading until today, but I like to stay "in the zone" and up to speed with the movements as much as possible, if only to train my brain to start to understand the way price acts and to spot repetitions and patterns. So although I stayed away on Monday I was back in on Tuesday looking for my usual set ups.
As a result, I've had choppy performance as currencies have behaved somewhat oddly. Three trades on Tuesday left me with a net loss of 1% (still a tenner). Wednesday was the same with two losers and one winner. I was on my Q run (my 17th attempt to spot and manage 30 perfect trades) on Tuesday and Wednesday but unfortunately I broke my rules on Wednesday afternoon when I took a Euro trade that did not have "sharp shoulders" on its W shape and so I've had to move onto R. That rule breaker took my performance on Wednesday from break even to 1% down.
This morning I've been trading too much I suspect. My first trade was great, I caught a fast moving sniper short on Euro Swissy (EUR CHF) that hit my target 20 pips in 4 minutes.
But as is often the way with trading, in my excitement I then spotted a short trade on Aussie against the US dollar (AUD USD) and accidentally clicked into the trade before checking whether it had properly retraced on the hourly chart to be bouncing off the 50 moving average as per my rules. Oooops. Why am I not surprised that 40 minutes later I was out of that trade 1% down. Keep those itchy fingers under control girl!
This was then followed by a long sniper on Euro pound (EUR GBP) which technically followed my rules but which failed when the pound changed its mind about its direction of travel and started to head right back up again after what seemed to be an emerging down trend. I remind myself that cable, as we call it, is an erratic, choppy currency which can be unpredictable and is not my currency of first choice.
Which brings me neatly to my final trade of today - my trading currency of choice, the good old Euro against the dollar. When it moves it really moves and today I caught a lovely move. But if I hadn't been greedy I would have done much better out of the trade.
I took the trade as a long sniper at 07:12am and initially set a good target which was 94 pips away from my entry (nearly 5%) but justifiable based on price action. There was then a good move up and price pushed through an earlier possible line of resistance with no difficulty and started to move even more quickly. At that point I got excited - yes, the alarm bells should have started ringing right then - and thought that as price was moving so fast I could move my target to an even higher technical point, 124 pips away from my entry (over 6%).
Confession time. That was greed kicking in. And they say you should plan your trade and then trade your plan. If I had stuck to my plan those 94 pips would now be mine - £47. Instead, I set the new target and moved my stop loss up. To be fair, I moved it up to a reasonable technical point but after a couple of hours of fuffling around price dropped to my stop loss and took me out. I netted 50 pips (2.5%) which was not bad and wiped out almost all my losses for the week. I'm now just 0.5% down, or a fiver in layman's terms.
I confess to this greed publicly as a way of punishing myself for moving my target when it was a good target anyway. I am still learning. About myself as well as this dark art. Next time, I tell myself, I will stick to my plan.
My coach Emmanuel tells me it's a Fine Line between profit and loss in trading.
That Fine Line between me being 0.5% down or 1.7% up on the week was purely down to greed today...
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