3psilon's journal

Week 1

(Adding 1 week later.)
Decided to just jump in back to forex. I've been playing with this thought since 2019 when I bought my first investment book. Only that I haven't had anything to invest back then. And for the years to come.

I've been dreaming about this to come, but actually the greatest hindrance was myself: a young dude with no money, little discipline, frequently anxious, sometimes depressed. It took a decade for this to change.

Get a degree, start a career, start another. Earn almost no money, then some money, then quite a lot of money. (Why spend energy on investing well, if you only have a few months worth of emergency savings?) Manage to save most of it by not spending too much on worldly stuff. Getting to know myself through various challenges: getting married, keeping friends, volunteering.

Then, I read A Wealth of Common Sense by Ben Carlson. Awesome book! Started index ETF investing, exactly a month before the market crashed last year. Kept on investing during the bear market since then. It's hard, but I think, a lot less harder than live trading individual assets. I don't want to trade individual stocks, bitcoin, whatever because I think I'd suck at asset selection for investment purposes. Also I'm learning a lot about economics - it's easier to learn during a bear market because you get to see all these things happen.

Then why do I want to trade forex at all?! It's not the money, but some kind of other interest. I have money and a good source of income. My goal is to pick this up as a hobby and then kind of a "side gig" in the following years.

The first week's plan was:

1. Start reading babypips again - fortunately I have read like 70% of it and have notes at hand. Time for a refresher.
2. Set up a demo account @ Pepperstone with MT5
3. Find a good trade journal app with a proper free tier, settled with Forexbook
4. Find a good, simple strategy to follow. Decided on Trading Made Simpler (TMSr). Add charts, set up 8 pairs in a profile.

Experience

It went well. Placed some nice trades, mostly around LO time. Actually I don't care about the results yet. No position sizing or money management whatsoever. I'm not there yet. Let's just feel the market a bit.
I care about how I feel. I got excited, checking the charts every hour. Now I know how hard it is to be in the market. Prices jumping all over. I'm making quick, hasty decisions which is suboptimal. But it doesn't matter, this is demo. I have all the time in the world to experiment.

Next week's plan

1. Don't add any more indicators or try different strategies. Stick with TMSr. H4 charts fit my daily routine well.
2. Try some trade management as described by Robinhood, with scaling out from the position.
3. Analyze each trade during the weekend. What went well? Did I miss something? Etc.
4. Set a stop and just let myself get stopped out instead of worrying about the trades. This is harder than expected.
5. Make a trading plan during the weekend a bit. At least record the main trend direction for each pair and know whether I'm trading against the main trend.

Week 2

Well, what a week. I decided to take on as many trades as possible and analyze them during the weekend. I just randomly fire up MT5, take some trades based on what I see and just move on. I don't have to be right or wrong, just trade what I see, as much according to the TMSr strategy as possible.

Basically, this would have been a nice, I dare say profitable week... if I hadn't been stopped out of all my positions on Tuesdays after the USA CPI release. Lesson learned. Better to close positions before such high impact news releases. It felt bad to make a mistake. But it was also important to be able and move on afterwards.

My head hurts after all the analysis now. I'm absolutely sure that I had absolutely no clue about what I was doing during the week. Didn't even pay attention that much. It's OK to be totally careless at this stage as long as I try to learn from it.

It all looks so nice in the rearview mirror. Nice trends, crossover and continuation signals everywhere. But I have to enter and exit somewhere in real time, while having reasonable SL and TP levels.

All in all, I took many trades, good and bad (probably overtrading a bit) during these 2 weeks. I'm barely over breakeven. I think that's a good thing if I can keep it up!
Trading consistently at or around breakeven is the first step towards trading consistently with a small profit. Etc.

Next week's plan

1. Keep on trading what I see and not what I think. Added a "round numbers" horizontal grid instead of the useless default grid.
2. Try not to enter after a crossover/continuation signal when the market has moved "too much" already. I put on an ATR indicator, and looks like if the market has already moved more than 1.5-2 ATR, then it's too late to enter.
3. Try some automatic trading manager EA that moves SL and takes profit at some predetermined levels. After analyzing, I found that I could easily take double profit as well.
4. Figure out how HMA redraws. Looks like the last bit of it can redraw during a H4 candle.
5. Keep on reading Babypips. I don't care about Fibonacci, Elliot et al, but wanna get to the later parts about market sentiment and strategy execution.
6. Challenge: don't close any positions manually. Only stops.

Week 3

Haven't done much trading time. Made a routine to find setups at 8 in the morning (LO) and about 8 in the evening. Besides day job, I don't have time (and really, the interest) for day trading, scalping or whatever. I'm still trading every day... at breakeven. Mostly just not having much of a clue. Okay, that's not entirely true.

I can see when good setups are coming. The hardest part for me at least is to see when the market has gone out of choppiness and into trending mode. That's when TMSr (or I guess trend following strategies in general) work best. E.g. EURUSD was pretty much ranging from the 14th to the 20th. Also, I got stopped out several times after news releases, and due to the high volatility mid-week.

Otherwise, I haven't made much of an effort... just took it easy. Better to try & fail at this stage. Just experiment. Feel the market's breathing. Feel the price action, the reactions to news releases, the volatility, the choppiness, whatever. As I see the best way of experiencing is to just be there, have some active trade going on. I'm getting kind of desensitized, not too excited, but still can digest the 'feedback' that the market gives.

Haven't messed yet with trade management. Not there yet. Just set SL 2 bars behind and a TP equally as much. This works, if I manage to catch a 'move' (trend movement) early enough.

Next week's plan

1. Try increasing W/L ratio.
2. Try to trade with the trend only. This is much, much harder than expected.
3. Read more babypips, and read in the TMSr topic as well.