Not much going on today for far. Just got entered in a trade on the AUDUSD but other than that, the market isn't doing anything. I titled today's post Step Away From Your Charts because this market can truly drive you crazy if you get obsessed over it. When entered in a trade most people (including myself) want to see instant movement or success. This is never the case in this market. Rarely do you see price action move straight up or straight down, and when you do it's usually the times when your not in it. Therefore hen I'm entered in a trade (especially if the target is far away) i try to get my mind off of it and do other things. I am still human so I often sneak back to my computer to check where it's at, but I've been getting better at not watching it second over second. Also if you stress over it you will never get any sleep. Trust me when I first started I would literally wake up every couple of hours just to check on the trade. This was cool for about a month, then the lack of a good nights rest started to catch up to me. Not just because I was waking up so often, but also because I could fall asleep due to my mind wondering. Now that I've been doing this for a little while longer, I've realized and learned that my waking up has absolutely no effect on the direction that the market moves. So now if I'm in a trade overnight I just tell myself this "when I wake up one of three things can happen. I could have lost money, i could have gained money, or I could still be in the trade."
In a week or so my small business will be 6 months old. It seems like it was just yesterday when I started so it'll be a good time for an evaluation. I'll probably post that under the "from A Young Entrepreneur" blog but it should be good. I'm not really sure where I stand as of being happy or sad with the first 6 months but I have about 10 days to decide so stay tuned.
I know that I've mentioned this a lot but during my trading training , my coach Jason Stapleton always preached following your rules and not your feelings. Before I took my trading course with Jason I would always look at a trade and say "I think it's going up, maybe I should buy", or "I don't think I'm going to enter because I have a feeling it will go down." Silly stuff like that. Jason thought me a checklist type of system where you could mark off yes or no for each condition when looking at the market. For this checklist you can add whatever you feel is relevant. The important part was to stay consistent on evaluating the market the same way each time. That way you never have to make an emotional decision, you're either getting involved or your not based on your checklist. This proved to help yesterday (not that I believed it wouldn't) but I had identified a trade earlier in the morning and put it through my checklist on my white-board as I usually do. In the morning the entry looked good but I needed a few more things to happen before I would allow myself to enter. When I came home to check the markets later in the day, I actually forgot that it was a pair I was tracking. So when looking at the chart I said to myself,"hmm this looks good" but something about it felt off. I was looking at going long on the EURCHF (buying the Euro and selling the CHF) and throughout the day the CHF had just been rolling over and destroying everything so of course I was a little skeptical of selling a pair that was being bought up. For a split second I was stuck in that emotional box, then I realized that it didn't matter what I thought. What mattered was that I go through my checklist and if I get the score that I require then I make the move. I did so, and it met all of my requirements so i jumped in. Currently the trade is in profit (which means nothing until it hits my target, but Its a better sign than being stopped out for a loss.
Yesterday I was entered in 2 trades. As the title depicts one trade was a winner and the other was a loser but I still came out with profit in hand. During all of my training one of the major concepts stressed to me was always having a proper risk reward ratio. Meaning that whenever you set up a trade the amount that you can possibly win should always be more then the amount that you can possible lose. This was you can lose more than you win and still come out on top. Other than that not much is going on. I've been working very hard on my predictive analysis by putting my notes directly on my chart instead of just trying to remember them. Yes, it makes my charts a little busy but it also puts me in the situation where I can predict a set up a few days in advance then simply wait for price action to reach that "Kill Zone" (Buy or Sell area). For anybody that it interested in becoming a trader here is a great quote from my mentor.
"I spent years and 10's of thousands on education. I am the exception, not the rule. I wanted to be a full time trader more than anything in the world and I was willing to do whatever I had to do to achieve that."
Not much action in the market for me the past few days. There are some good patterns on higher time frames that I am looking at but it will take a while for price action to reach that level. On the stock side of things I had a good sell with Apple. We stuck to our guns and held tight through a bumpy resistance level and were able to get out at a good price only to see the stock plunge today. I still think it has room to go but I'd rather be cautious than greedy.
I apologize for not posting an update yesterday but I was filled with negative energy and din't want that to overflow onto the site. This week has been bad on my emotions as a trader. Every trade this week has been a loss so far. I don't really mind the fact that the trades lost but it's how they lost and the fact that I feel that I have not improved. If you've been following this blog then you know that my motto is "Kaizen" and that I try to improve a little bit each day. What hurt about the trades this week were the fact that I believed they were very good setups, with very good risk reward ratio's and they just didn't win. I understand that losing is part of the game but it still hurts when it happens multiple times off of setups that you thought were very good. Like I said it's not really the fact that they lost that bothers me, it's more so the fact that I feel like I haven't improved. It's kind of like taking the SAT's over and over again and not improving your score. With that being said I'm still focused on the task at hand and I'm still hungry for success. The one thing that keeps me hungry is the fact that THIS IS IT. I don't have a backup plan so I HAVE TO SUCCEED. I'm a college graduate with a Master's Degree that was not able to get a job after graduation so I decided to hire myself. If I go broke then its back to doing stuff that I don't necessarily like doing. SO THIS IS IT.
Before I go off the deep end with this rant, I did have a positive week with the stocks I'm trading. That doesn't mean much a far as my business goes, but it's something to help the confidence. Talk to you tomorrow! -I Am Business
Not much to talk about today. I entered 2 trades that are bouncing around from red to black, so we'll see how they end up. One thing I did notice was that I exited a trade way to early last week. I know that hind sight is 20/20 but I made an impulsive move by exiting in the first place. I was in a bullish trade on the USD/CHF a week ago and the trade had been going great. I was in the profit area and even if price reversed and hit my trail stops I would still have a good profit. At a point where price action started to slow a friend brought to my attention a sell opportunity. After looking at it for a short period of time I decided to take profits and reverse my position. Then of course the price keeps shooting up and up and up. Another lesson well learned. Because of this I have made it my number 1 rule to stop making impulsive decisions. I feel like a baseball player swinging at every pitch instead of waiting for the perfect one to hit. I remember an old coach of mine telling me that "not every pitch that will be called a strike is a pitch you want to swing at". Wait for the opportunity that fits you the best and take advantage of that opportunity the best you can. Quality over quantity.
Hear others but listen to yourself. The idea from this quote came from an experience I had trading today. In this profession you would think that multiple sets of eyes and opinions are better than one, but this is often not the case. As a trader than uses technical analysis I like to think of the the market as a piece of art. I say this because when looking at art, what you see is undebatable. However what you interpret will vary from person to person. Today I saw an excellent pattern forming on a trade. I went through all my necessary steps to evaluate the setup and make sure it was in confluence with all of my rules. I was pretty excited because I analysed this trade a good hour or so before it would have been triggered. However, when talking to another source (with more trading experience than my self) they informed me that they were already in the trade going the opposite direction of what I would have been going. Because of this I decided to hang tight and not get involved. A few hours later while evaluating my different charts I noticed that the trade would have been a winner. In fact the trade had moved up to my profit position, then reversed and came back down to put the other trader in the black as well.
I look at this instance and realize that it is a confidence issue. When people are in a position with more experience than you, it is good to use them as role models and hear what they have to say. However, if you don't make your own decisions then you are simple putting yourself in the "Rat Race" (from Rich Dad, Poor Dad). The funny thing is that if I were to tell the other trader what I did today he would have yelled at me for giving up on what I thought was right to follow him. Taking advice is fine, but at the end of the day you must make your own choices and decisions.
One of the most important parts of being a successful trader is being able to forget. Whether it be good or bad, it is important to not get emotionally attached to any winning or losing trade. This is something I'm struggling with right now. I recently had 2 really good wining trades that brought me back into the black for the month, but today I entered 2 more that lost. Well 1 lost and the other is looking like it will do the same. As soon as I looked at the charts I felt depressed. Only for about 5 minutes but depressed none the less. I said to my self "I just came off of 2 great trades that struggled their way into profit, making this month positive, and now I'm back to even. If I would have just sat back and not entered the trades then I would still have good monthly number." However, I soon realized that this isn't the right way to think about things. If I don't enter a trade then, I have no chance of making money and running a business is about making profit not about being worried about what I lose. So yes I would have preferred a wining trade but I must remember that every time I enter a trade there are 2 possible outcomes. That I make money or I lose money. If I am scared to lose money then I will never be able to make money.
This week was a week that proved how good technical analysis really is. By the time Friday approached the two trades that I were in were already in the positive. To protect myself I also moved my stop/loss beneath the most recent structure so i was locked into profit no matter what the market decided to do. The reason Friday was such a big day was because it was the first Friday of the month which of course means the announcement of the non-farm payrolls. I was not home on Friday so I didn't get to watch the madness happen live, but I was tracking the news announcement on my phone. When the numbers were released, they were nowhere close to what was predicted. I think the prediction was roughly 150,000 and the number came out at 36,000. OUCH. So when I saw this announcement I instantly assumed that both of my trades were stopped out. When I arrived at my hotel later that evening and loaded up my charts I was surprised to see the aftermath of the results. Even though the number came out horrible (which is bad for the USD) the USD continued to rise. If this doesn't tell you that technicals rule the world I don't know what does.
Now on the bad note, I few post ago I mentioned that I made a mistake by closing out a trade that was in profit and then got sucked all they way back to break even. Well, if I would have suck to my guns and not punked out, I would have still been in the trade and in the black. Lesson learned. I hope that was a mistake that I don't make again.
Lastly to update you on the trades I',m in, well they are still in the black and as the market rises and falls, I'm continuing to trail my stops at the most recent structure points.
Today was a good day in the market. A lot of the trades I were in had some pretty good moves. However it was a real test of my self discipline and the ability to stick to my plan. Overall i would give myself a C grade. I followed my rules on a few trades, but on the other hand I got scare of a few as well. Yes I got scared out with profit, but it wasn't a part of my plan and I know that if I continue behavior as such, I will join the 99$ of pro traders that fail. One of the trades that I punked out of was a heart breaker because it shot up about 80 pips or so in the early NY session, only to be sucked right back down on the very next 4 hour bar. When I saw this I was so devastated that I moved my stop/loss to break even and closed the trade. Of course when I came home later in the day I saw that the trade was back on the positive side. Not to the point of where it was at this morning but it was still on the right path.
Even though I'm getting much better as a trader, there are still a few bad habits that I must iron out to become a good trader. Lesson learned. I don't mind making mistakes, but I do mind making the same mistake twice. So hopefully this was a one time thing and next time I start feeling scared I'll force myself to turn off or simply walk away from my computer. Sometimes its best to just get away and let the market do what it's going to do, instead of having your eyes glued to it.