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What I learned after losing $300,000 trading forex

  • #341
  • Aug 5, 2020 1:48pm Aug 5, 2020 1:48pm
Cognitive bias

Description
A cognitive bias is a systematic pattern of deviation from norm or rationality in judgment. Individuals create their own "subjective reality" from their perception of the input. An individual's construction of reality, not the objective input, may dictate their behavior in the world.
  • #342
  • Aug 5, 2020 1:49pm Aug 5, 2020 1:49pm
Quoting CeeSo
The problem was I did not have anyone to relearn from that I trusted. That is why I am telling you do not trust me! Just sit and watch for yourselves for a month or even two months.
We can easily test if what someone told is true or not by doing the testing work. But the real problem is those who know won't tell. Those who don't know tells nonsense.
Know what you trade
  • #343
  • Aug 5, 2020 1:53pm Aug 5, 2020 1:53pm
Quoting BWilliam
{quote} We can easily test if what someone told is true or not by doing the testing work. But the real problem is those who know won't tell. Those who don't know tells nonsense.

Hahaha yes, you are so right about that. I do not even know why I started this thread. I guess I was bored and thought it might be emotionally cathartic but it is already turning into a distraction and highly doubtful I will continue it. I was really hoping to stay on the topic of psychology but clearly we have strayed far from that.

  • #344
  • Aug 5, 2020 2:12pm Aug 5, 2020 2:12pm
Quoting Vincelev
It's a nice thread. What CeeSo is showing is really important. We need to work with statistics, probability, expectancy, not only gambling on some chart patterns. It is possible to do the same work with any line in the sand in fact. I personnaly use pivot point and I compile my own stats. I found this picture some years ago, and this is what gave me the idea to do it. The stats showed here are near the actual reality. {image}
What does it mean "closing inside pivot point"?
  • #345
  • Aug 5, 2020 2:32pm Aug 5, 2020 2:32pm
Quoting Lest
{quote} I don't trust anyone, especially you. You can show historical results to children. Show one trade in real time. It can be DEMO 0.01L so you don't get hurt.
i mean, you dont have to trust him/her. all he/she is saying is to take probabilistic approach
  • #346
  • Aug 5, 2020 2:38pm Aug 5, 2020 2:38pm
Hi CeeSo Thank you for sharing your experiences, I believe that what I have learned so far will help me in my future trading and I can understand should you decide to stop this thread, my hope is that you will carry on!
  • #347
  • Aug 5, 2020 2:44pm Aug 5, 2020 2:44pm
Quoting birdland
{quote} thats it what you want to say? 0.5% of the euro is about 60 pips on average every day. nothing new here so far. its like i say many birds fly, but some cannot fly and walk on their legs. true, but whats the point?;-) by the way, 60pips per day is enough to get out many pips...
i suppose you could use it as a part of mean reverting strategy to get an edge but i might be wrong that this is something that thread started is trying to convey
  • #348
  • Aug 5, 2020 3:03pm Aug 5, 2020 3:03pm
Mastering your own emotions/self-control really is the key. Not being perfect or too hard on yourself. I added a few pictures of the live account from the beginning of 2019. I'll explain the story.

So I opened up my own firm in 2017 in China. I had about 9 people on the sales floor, getting clients, doing cold calls, marketing, things like that. I had this one employee, lets just call him Mike. When Mike first started trading he had that beginners luck. He took a few hundred dollars and turned it into 130k USD in 2 weeks. He withdrew like 10k uSD of it. Went partying with 2 or 3 friends over the weekend in Shanghai. Went back to trading the next week, thought he was invincible and lost the entire 120k USD in 3 days. But he already had a taste of having money. He just continuously made poor decisions after that because he was always rushing to get back to that feeling.

Anyway, by the time he got to my firm he needed a stable job so he did sales. He finally met a high net worth client who wanted to START with 300k USD. He wanted like a whole new level of commissions, profit split, etc. So we couldn't agree and he left my office. Anyone remember the big JPY strength at the beginning of 2019? Well that was when he started trading for that client and got hit bad just in the first few days of trading the account. He calls me up asking for help but it was too late. He was desperate to make back over 50% before the first profit split and I was done with that type of trading mindset.

I NEVER saw someones psychology be like his as losses piled up. Once the psychology goes, risk management and all the other key things go out the window with it.

Thanks Ceeso for sharing your story, but you are not alone.

https://www.screencast.com/t/k7JsoZztU
https://www.screencast.com/t/9cYMLC8YFs
https://www.screencast.com/t/femedSvz6o
https://www.screencast.com/t/y5gCq0R9Y
https://www.screencast.com/t/PpJbSLOKu3u
The best strategy is a profitable one.
  • #349
  • Aug 5, 2020 3:51pm Aug 5, 2020 3:51pm
Quoting birdland
{quote} thats it what you want to say? 0.5% of the euro is about 60 pips on average every day. nothing new here so far ;-) by the way, 60pips per day is enough to get out many pips...
You can make a living with earning 20 pips a day constantly. I don't trade EURUSD because of the low ATR. The Dow 30 is much better
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  • #350
  • Aug 5, 2020 4:27pm Aug 5, 2020 4:27pm
Quoting pro-trading
The bottom line for me so far is: Fact 1 Addiction is a real problem, you can only overcome it by sticking to your rules and undertrade. Fact 2 The percentage levels work and price is behaving at those levens similar to pivot levels. However, the percentage levels have to be set differently regards to the various markets. Questions: If daytrading is more risky compared to swingtrading, why not only swing trade? Is it possible that daytrading is a function of boredom combined with hybris and the addiction to dopamin/arousal? Why not only swingtrade...

I could not agree more Day Trading is much harder than swing trading especially in a random rotational market that barely move .5%

I also agree with you that the dopamine rush we get from day trading is a big influence on why so many people continue to do it.
  • #351
  • Aug 5, 2020 4:37pm Aug 5, 2020 4:37pm
Quoting AnRan
Mastering your own emotions/self-control really is the key. Not being perfect or too hard on yourself. I added a few pictures of the live account from the beginning of 2019. I'll explain the story. So I opened up my own firm in 2017 in China. I had about 9 people on the sales floor, getting clients, doing cold calls, marketing, things like that. I had this one employee, lets just call him Mike. When Mike first started trading he had that beginners luck. He took a few hundred dollars and turned it into 130k USD in 2 weeks. He withdrew like 10k uSD...
Nice to see you in this thread. We seem to be of the same mindset and thanks for your continued input on the FTMO thread.

Dopamine is extremely powerful. Most people really do not understand just how addictive it is and especially as men we are not willing to accept our weakness and deal with it. As a man, we are taught to be tough and strong and disciplined but this is bull crap.

Dopamine is a powerful chemical and once you are under its control you might as well be on crack cocaine because it is just that powerful!

Have you heard of the Butterfly Effect?

If you can stop the Dopamine before it floods your system it can be controlled this is what I "try" and do each day.

I try and avoid situations that have extreme highs or lows. Sizing trades so that if I take a loss it will not start that flood of chemicals because the loss was small in relationship to my account size was a huge game-changer for me.
  • #352
  • Aug 5, 2020 4:53pm Aug 5, 2020 4:53pm
Quoting CeeSo
{quote} I try and avoid situations that have extreme highs or lows. Sizing trades so that if I take a loss it will not start that flood of chemicals because the loss was small in relationship to my account size was a huge game-changer for me.
Yeah, thats rough It's one of those things I learned from my mentor early on. If you are nervous about taking a trade, the problem usually isn't the trade, its the position size/risk associated with it. I don't know how you calculate risk but I know that was the turning point in my trading. The strategy wasn't the issue, it was "what if this trade doesn't work out, though". It fixed the rest of the psychological issues that I was experiencing and paved the rest of the way for me. Seems you are feeling that same thing now, too.

And that butterfly effect was exactly what I saw with him. I'd call and try to talk to em, just stop, call the investor, etc. But nope. Dude didn't even sleep. It all happened in the span of 1 month, too.
The best strategy is a profitable one.
  • #353
  • Aug 5, 2020 5:13pm Aug 5, 2020 5:13pm
Hello CeeSo,

Can you clarify, what you are using for you range? ATR? Yesterdays Range?

I've scanned though the Daily bars for the last 365 days and can't get the same results.

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Asw
  • #354
  • Aug 5, 2020 6:25pm Aug 5, 2020 6:25pm
Quoting CeeSo
I try and avoid situations that have extreme highs or lows.
Out of a 100 traders 99 of them trade reverse the extreme highs and lows.

The traders mindset is to wait patiently for the cheapest and the most expensive price of the day to buy and sell, they call that waiting for day highs and lows trading opportunity as Discipline.
Know what you trade
  • #355
  • Aug 5, 2020 6:42pm Aug 5, 2020 6:42pm
Quoting CeeSo
I could not agree more Day Trading is much harder than swing trading especially in a random rotational market that barely move .5% I also agree with you that the dopamine rush we get from day trading is a big influence on why so many people continue to do it.
Scalping has the shortest cycle time. That's why almost every trader scalp for a few pips throughout the day.

The reason offered for why so many traders chose scalping is they are least exposed to risk exposure due to the short window in and out the market gathering easy pips.
Know what you trade
  • #356
  • Aug 5, 2020 6:44pm Aug 5, 2020 6:44pm
Quoting AnRan
{quote} Yeah, thats rough It's one of those things I learned from my mentor early on. If you are nervous about taking a trade, the problem usually isn't the trade, its the position size/risk associated with it. I don't know how you calculate risk but I know that was the turning point in my trading. The strategy wasn't the issue, it was "what if this trade doesn't work out, though". It fixed the rest of the psychological issues that I was experiencing and paved the rest of the way for me. Seems you are feeling that same thing now, too. And that butterfly...

Yikes it is so hard to stop the effects of Dopamine and Adrenaline and it can last for weeks and months even
  • #357
  • Aug 5, 2020 6:45pm Aug 5, 2020 6:45pm
Quoting Asw
Hello CeeSo, Can you clarify, what you are using for you range? ATR? Yesterdays Range? I've scanned though the Daily bars for the last 365 days and can't get the same results. {image} Asw

No ATR you are just using the Open Price and adding the % changes higher and lower. Hope that helps
  • #358
  • Aug 5, 2020 6:47pm Aug 5, 2020 6:47pm
Quoting BWilliam
{quote} Out of a 100 traders 99 of them trade reverse the extreme highs and lows. The traders mindset is to wait patiently for the cheapest and the most expensive price of the day to buy and sell, they call that waiting for day highs and lows trading opportunity as Discipline.
I completely agree this is why you will almost never see me picking tops and bottoms. The AUD worked beautifully today at the 1% reversal but I do not care. Trades like that trigger the butterfly effect for me.
  • #359
  • Aug 5, 2020 6:52pm Aug 5, 2020 6:52pm
Quoting BWilliam
{quote} Scalping has the shortest cycle time. That's why almost every trader scalp for a few pips throughout the day. The reason offered for why so many traders chose scalping is they are least exposed to risk exposure due to the short window in and out the market gathering easy pips.

Let me tell you my theory why scalping does not work (at least for me).

1. The fluctuating spreads are almost eventually going to take back all the profits.

2. Think about who is in the Forex markets? BIG players and big players do not use precision entries and exits. If you are doing a 100 million dollar (no margin trade) for whatever reason. Do you really care if you get 1.2000 or 1.2020 ? 20 or 30 pips is nothing to a big institutional trade.

So for those reasons I had terrible success scalping.

My average trade is 20 to 30 pips with a 20 or 30 pip stop.

Some days I can squeeze 60 pips out of the range but that is not a common event.
  • #360
  • Aug 5, 2020 7:09pm Aug 5, 2020 7:09pm
Quoting CeeSo
Let me tell you my theory why scalping does not work (at least for me). 1. The fluctuating spreads are almost eventually going to take back all the profits. 2. Think about who is in the Forex markets? BIG players and big players do not use precision entries and exits. If you are doing a 100 million dollar (no margin trade) for whatever reason. Do you really care if you get 1.2000 or 1.2020 ? 20 or 30 pips is nothing to a big institutional trade. So for those reasons I had terrible success scalping. My average trade is 20 to 30 pips with...
Reverse day high low extremes, scalping and dollar cost averaging as basket trading are the most popular strategy among traders.
Know what you trade
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