Omkar's Trading Journal

So, my primary intention behind starting this thread is to keep record of my trading progress. But this will not be just a trading journal.

Procrastination has been my biggest enemy so far. Every night, I tell myself, tomorrow will be a new day. At least 12 hours of deep work, proper sleep schedule, exercise, no smoking, no junk food, no procrastination, no anxiety, trading with proper risk management and the list goes on. But every morning I wake up, it's the same cycle again. This is messing with my sense of self-awareness and self respect. Obviously, some negativity has crept in and it is affecting my trading. It's a vicious cycle!!

I think a little public declaration of my goals will help me against these things. If I don't do the things I decide here today, that would be a real shame. Of course I might have to find another way because it can't just go on like this, but that will be a serious blow. More on that later, let me chalk out the plan first.

Duration: 30 days, starting today.
Capital: 1000 USD

A. Trading:

Yes, first things first. I scalp forex pairs and I am comfortable with it. In the last 2 years since I started trading, my biggest problem has been this: I cannot hold a winning trade for long because of the fear of it going back against me. But I hold losing trades hoping they will eventually turn back and break even. (unfortunately, many times they don't!!). So I have a good win ratio overall but that 1 losing trade takes away everything I have earned. This has happened to me at least 5 times till date. So, riding the winners and cutting losers is the first target.

Daily expected return: 2%. This means, in the next 20 working days, final account balance should be at least 1400 USD (2% of 1000 for 20 days), or 1485 if compounded. I am not worrying about this much, even a scratch is a win. But I have to have some numerical target and I think 2% suits with my trading style.

Money Management: No strict stop loss but will not rebuy or resell (no or minimum averaging). Will let go e

Will not bet more than 2% of the capital on a single trade. (i.e. each trade will be of 0.2 lots initially).

Maximum deep work (Will keep track and record experiences)

B. Other things

I will keep track of these things daily and update here at EOD. There is a possibility that you might find this a little too much or totally unrelated to trading but trust me, these are the things that keep nagging me and I have to deal with them urgently. I won't mind if I don't reach 1400 USD but these, I must follow.

1. No smoking, drinking
2. 10 km jogging everyday
3. 1 hour upper body exercise
4. Only healthy food
5. No unnecessary expenses
6. No negativity (No Facebook, Instagram or political news, no negative thoughts, no jealousy)
7. Self-awareness all the time

You guys are welcome to share your thoughts but no trolling or unnecessary arguments etc please. If anyone wants to join this journey and have similar goals, you are welcome too.

No Procrastination?

But what else are you gonna do, in between flicking through multiple charts, sitting waiting on trade configurations that you can actually take.

Trading properly, is lonely and boring as hell. Sure, live healthy, and definitely get a good nights sleep (or don't trade), but no point in beating yourself with a stick. It won't be sustainable.

Trading isn't like other endeavours. Whilst you need to put in the hours, and be constantly watching, observing, and learning, too much 'exertion' will be counter productive. When a good trade signal comes in, you need to be relaxed and have a clear mind, and not be breathing out your ass from that 10kn run you just had.

Valid point!! Let's see what happens!!

I have been reading extensively about flow state (https://en.wikipedia.org/wiki/Flow_(psychology) these days and one of the things that lets me access it is music. I will be sharing the soundtracks I listen to in green color. In my experience, instrumentals are better for this purpose. I pick the soundtracks I immediately connect to, like these:

From harry potter and prisoner of Azkaban album:

Double trouble, Buckbeak's flight, A window to the past.

Those who use technical analysis for trading have tried at least one indicator,if not many. So have I, but I am still unable to find the edge from any of them. Now after almost 2 years (!!), I have come to this conclusion: indicators won't work or just indicators won't work. We need something extra and/or different. Then comes price action. Now we know this, all breakouts will not work, all support resistances will not hold.Same case as indicators. So I was thinking, what next?
Of course we can say nothing will ever work 100% of the times but it doesn't matter. I need to find something I am very comfortable with. Whenever I have that big loss, I wonder how come I am always against the trend? So there is some problem with the way I recognize a trend. Of course, I sometimes don't take action even if I recognize the trend, but that is a different issue.

Now I have decided to work and research along these 4 branches:
1. Measuring trend in streaks of consecutive red/green candles.
2. Are candles creating information overload? A line graph will help in that case.
3. Breakouts and strength of price coming into that breakout.
4. Do wave come and go in cycles of 3?

I will explain as I go forward.

Another point I would like to mention is, if there are only 2 outputs available to any trade, if something is not true, it's opposite must be true. For example, if breakout fails, that means support resistance have been able to hold the price. So studying one side will expose the other side of that setup as well.

This is simply not true.

When it comes to drawing arbitrary lines on a price chart, probably giving yourself 2:1 or 3:1 rr, it isn't merely a coinflip, or a binary choice. It is more like a Dice Roll, where you are betting on a 6, and nothing other than a 6 will do.

Novices don't realise how heavily the odds are stacked against them. With that said, there are features in price action, which are also reflected in indicators which themselves are based on price, that offer up probable outcomes.

After paying good money to learn all the usual n00b bullshit, like candlestick patterns and/or blindly trading 61.8% retraces, I learned after much frustration, to focus on identifying key price zones where based on previous price action, price is likely to react, and also on identifying clean and consistent trending price action, where simple things like 'buy the dip' is most likely to pay dividends.

There is no special magic to this. you don't need to do 50 press ups on broken glass, whilst your hair is on fire to achieve the 'discipline' required. What it boils down to, is that you either know your sh1t, and you are comfortable executing it, or you don't, or aren't. Takes most people a lot of time to get the grasp of it.

I understand. In my opinion, when u enter a trade, you only exit in profit or loss. Only 2 possible outcomes. Break evens are not worth consideration here at least.

So, if I am trading in the direction of breakout and you are selling for a resistance bounce, only 1 of us is going to be right. At least in prediction, if not in result. We both might score a profit on that trade, but one of us will have to wait longer and that is not what he predicted.

Today's tasks

Analyse EJ today, what entries I could have taken and how they would go.

Only 1 pair because I have always felt that I should trade only pair but havnt done so because of lack of patience. Maybe if this feels good enough, will trade only 1 pair this week. Lets see.

Will analyse things from these POVs

1. Trend strength (consecutive red green streaks, moving average crosses)
2. Trend continuation trades vs mean reversion (bounces from SR/BB)
3. Only 1 entry or multiple entries pssible?

Also, will use only 1 timeframe of 1 min.

Also, only EJ because gold and GJ are too fast for my style and higher spreads, rest are a bit too slow. UJ is also good enough, but if time permits, I will rather analyse EU because of lowest spreads among all. Also, EU is not heavily correlated with EJ like UJ.

And to be honest, 2 pairs should be good enough for scalping a 2% daily target.

Multiple entries idea is something I have though about before. More on that is on Fagin's corner thread. When I average by adding more positions, I guess I was doing that only. But positions sizing was clearly wrong. Entering multiple times with smaller sizes is what I need to try I guess.

This from my post from another thread

This is usually what happens when I take a trade:

I have a very heavy mean reversion bias and more on the sell side. So, most of the times I take entries against the trend. Whenever I see a trend developing, I think to myself, ok the price has gone away enough distance from the mean and it will now snap back. Or, the price is now touching the BB upper band, it will bounce back. So I take a short entry. Now 2 things can happen.

1. If I am lucky (or right or whatever!), price will go down and i am in profit. Immediately, I start think about exiting because now the price is in pullback. mean reversion bias kicks in and tells me that pullback has come down enough and now price will go up. So I exit or add a trailing SL and exit. normally on 5 pips. So less pips on my winner. I DO check the nearest support etc. but fear overcomes logic.

2.If price goes up after that short entry, hope overcomes logic and then I normally look to take another short entry at maybe after 10 pips or nearest support of higher time-frame MA (Because price has already crossed MA of my entry time frame but I am not able to leave that trade!). I will exit on break even now if price comes down by 5 pips.

Now if the price still keeps going up, I have to give up maybe after 10 pips. So my total loss is 20 pips on first trade and 10 pips on second i.e. 30 pips. So, if each position is of 1%, 3% is gone!!

I have lost my entire account 2-3 times because of this going on for 3 entries, 4 entries. I remember losing an account where 3 trades of 3 subsequent averaging entries of 2% each! Each position was taken after I guess 30 to 40 pips. That was just horrible and too painful. But, lessons have been learnt and this will never happen again. Because what happens is, this strategy gives you good returns but takes away everything you make in a day. And many times, price will come back after that. To rub salt on the wound.

Its about comfort and what suits me right. What I need right now IMO is a good combination of position sizing and SL. I am taking multiple entries anyway, but maybe do that without pressure of direction prediction.

That is a very lengthy post but I only read everything because of the first few sentences.

I too have a very strong reversion biasness and I tend to trade against the market's direction. In the past, this has worked wonders when I scalp the market for pull backs and open multiple trades to catch the pullback.

The reality? I have also destroyed my account multiple times and lost way too much money than I can afford to the market through this means of trading.

Question now is, you can identify the problem, so what are you going to do to fix it?

I am already working on trying to fix that biasness by finding ways to trade with the trend and at the same time catch any pull backs that are available. Because we have this biasness going for us, it becomes somewhat easier to find pull backs when they start to happen. This doesn't necessarily mean we can catch the entire move, well obviously because if trading pull backs was so profitable and easy we wouldn't have blown up our trading accounts multiple times.

But what it brings to the table is simply to ensure stop losses are in place when the pull back trade doesn't happen. It also means that we will have to find ways to identify when the trade is in the midst of a reversal and not just a simple pull back. By ensuring we can identify these and also mixing price action and price structure into the strategy, you will eventually find that you will be able to ride the market as it moves.

Of course, you won't be able to catch every single pip and you shouldn't have to blame yourself for it. No one will be able to catch the very top of a trade to the very bottom, vice versa. Whoever in this forum that claims they can do that are simply lying or have an ego way too big to admit that they're losing way more money than they should.

I am in the midst of making my change after identifying the issue and I am working on ensuring I follow the next trends that come. I believe if I can do it, so can you. You know the problem, now get out of your comfort zone and make the change.

Looks like we r in the same boat.

Lets do what we need to do. Please share your experiences here so that we can learn from each other's mistakes.

I believe I have already explained and listed what is required good sir.

Wish you well in your trading endeavors!

yes, I mean future experiences and trades! All the best to you too!

I provided a more comprehensive reply, which didn't make it past the moderation stage, perhaps because I included a commercial link to a black box system that fades over extended trends....

....but as a rule, what you are doing is nuts and it is something that you should just never do.

As has already been mentioned, instead of fading the trend back to the mean, start trying to figure out ways of following the trend and fading the reversions to the mean....Easier said than done of course, but there are methods that can help you frame a trade with a high probability outcome. And on that note, trade location is everything in trading.

That is to say, all the b.s. candlestick patterns n shapes, indicator buy signals and divergences and MA crossovers only work if you are adept at picking a trade location where the market is highly likely to react (and even then these things can still very often be setup to trap traders and run their stops, before whizzing off in desired direction). I provided a screenshot of a trade I took the other day in one of your markets USDJPY. Perhaps you will be to see why something which when zoomed in up close, looked like a very aggressive entry, which in of itself would be destined to fail 9/10 times, was transformed into a high probability winning trade, due to the trade location in relation to previous price action and the overarching market state:

https://photos.google.com/share/AF1Q...ZHdTRQdzhlV1J3

The signal chart is the 20 minute chart, where you will see a very clean example of MACD Line potential divergence, firing on a Doji candle, the tail of which flushed out a bunch of previous lows, that were all sitting along an area of previous support. These areas of price equilibrium, where demand has been shown to equal supply in past price action are called Supply and Demand Zones. And these are the locations that you want to be focusing on when hunting for trade entries, whether in ranging market environments, or in trending environments.

Is there any distinct advantage to MT5 over MT4?

Need to check that.

So Sunday is gone.

Will focus on only 1 pair tmrw at least. This week's theme will be Avoiding a headshot even if I bleed slowly to death. No account destroying losses I mean . Small losses are okay.

Both suck.

If you can find a broker that uses CTrader, then that is a big step up.

Oh okay.. dont know anything about CTrader, will check. Thanks.

I wonder if anyone thinks of trading setups as chess puzzles. I am sure there are some, if not many, common points there. And they will be interesting no doubt.

Personally, I think chess can stimulate our brain. It requires strategy, planning, preparation and patience. Trading isn't very different. Playing a match before u start trading has always helped me because it puts me in a flow and helps me focus.

What do u guys think about this? Any other such activity you do or know?