Transition from Losing to Winning

Hey blueruby,

First of all, well done for gettin to a break even stage.

Secondly, regarding confidence and trading in the "zone". Let me tell you one thing, confidence is definately very important. But you can't force yourself to have confidence in something that does not work. I went over months and month of data in a manual back to front test, looking at the price action, trying to predict what is going to happen, seting s/l and managing my "in the head" positions. At one point, i've realised that i've found something that works - trend. i was able to spot it visually, and "trade" profitably. Second step was to take that "virutal" confidence and make it real. That's when i started sitting in front of my screen, watching the market in real time and placing trade. first on a demo, and then on a real account with small lots (100k) Now i'm at the stage where i:

1) have a strategy with positive expectancy
2) have confidence in my strategy and my trading skills
3) have a growing knowlege base of trading opportunities and "plays"

I feel that all i have to do is just keep practicing, the prize is not far.

Best of luck,

Vlad Zapletin

Vlad, Tom and Alcastro, thank you for the kind words and encouragement.

I talked to my mentor and we came up with the proper solution. I need to tighten the money management on swing trades.

Take 1/4 position so that the 50 pip S/L doesn't blow my day - it would really be 12.5 pips equivalent. Simple enough. Then, every 50 pips of gain, add another 1/4 lot. On a big move, it will add up nicely. And I won't be glued to the screen, my morale tied to every tick because I have too big a position and am giving back too much.

Vlad -- very, very good point! Manual backtesting can help build that confidence faster; live trading only happens so fast, so you can only gain so much experience in a certain time.

Another tip from my mentor:

In Metatrader, take the chart off autoadvance, move it back a few months, then you can use the F12 key to advance one bar at a time. Then you can test a system, test your reflexes, your decisions, etc.

I haven't figured out how to use this for a multiple timeframe system. Maybe have two charts done that way, one in each timeframe would work.

These are the kinds of charts that make me feel stupid. This is less than 1 week of time on the 30 minute chart, the one I look at day in, day out.

Maybe I have been fighting the market a little too much. I'm using a 5/13/62 method, the whole basis of which is, the 62 acts as a moving support/resistance on the 30 minute chart.

Look how many times price has consolodated along the 62 (blue line) in the past week. Any of those would be a buy opportunity, according to the method.

At the left edge of the chart, price shot through the 62 at 237.01. Price is now at 239.55 and rising. 1 week. 1 trade. 254 pips.

Maybe trading with the trend isn't so much of a mystery sometimes.

Yeah, I've been reading Jacko's thread. MIGHTY GOOD STUFF!

Hey Blueruby, glad to hear you've set out to improve!
Sounds familiar

Well, if you're going to trade price patterns, I highly recommend the james16 public thread
http://forexfactory.com/showthread.php?t=2331


Basically, if there's anything you need to understand in order to have a simple and elegant way of making money, it's the pin bar...

http://forexfactory.com/showthread.php?t=6721

If this looks like me spamming PA, please forgive me. I just read that you learned that waiting for a candlestick setup and candle close is important, and that is one of the main requisites for PA...so if you already are halfway there, I thought this might help.

Pin Bar + Money Management = yay!

If I'm intruding, just say so, I'll erase the post.

BTW that emailed test was wiggy

Take care,

SeekingLight

I use the same money management principles as blueruby outline in the calculator. This is critical. However, that is just 50% of the game in my opinion.

In order to make my account increase, I have to ensure my winning trades are bigger than losing ones. THat means I either have higher win%, or/and larger winner size (either in pips or trading size). I choose larger winner trading size...my win% is low at about 30% to 40%.

SeekingLight, thanks, no, don't erase your post. I'm going to follow that link right now to see what a "pin bar" is. I've heard it mentioned a few times, but have never seen it in training materials.

If that's spamming, then spam all you want!

I'm sure you're right on all counts.

Everyone gets to their own system in time. I have to wonder why your win rate is where it is; I would have to assume that when you get a win with your system it's a really big one?

That might not work for me, I don't think I'd handle the repeated losses well. I would need a mentor leading me through a method like that so I could keep the faith until the win came!

I didn't really address this clearly before.

I totally agree with you. I just wanted to make clear the difference between the two.

When you don't understand what's being said, it gives you the same confused sort of feeling as when you understand what was said, but you see that it doesn't really apply and that it is not the solution to your problem.

It's two different types of "not understanding" it.

If it is something that does apply, then when you understand fully what is being said, that will give you an "aha!".

When someone tells you "here's what you're doing wrong" and you understand them, but it doesn't help, then it wasn't the right thing.

A trading buddy sent me a word.doc of a trading plan a month or so ago. Very detailed, it is an offshoot of the one by Tim Wilcox. I didn't finish it, there were too many hard questions and I didn't see the relevance of many of them.

Why set goals when you're not profitable? The first thing is to get consistent, then worry about future goals.

Well, there is a reason for setting profit/income targets. You have to set the target, or you aren't going to hit it. Once you have the goal up, it gives you a different mindset. I have completed that section, and am much more focused now. I see a few things, clearly, that I didn't see before. I can't really explain it, it just seems different. I feel more like a professional. And that's the way it's supposed to be, after all, the plan is really a business plan.

But the really remarkable thing was, in the section where I wrote my main weaknesses a month ago, there before my eyes was the list of things I had fixed. None of them is a problem now. So, I not only get to see my progress, but the fact is, writing it down caused my thoughts to exist in the real world, then they became reality. As long as you keep them in your mind, they're just thoughts.

That makes it a lot more fun, once you see how it works.

I don't know how to share this plan without copyright infringement.

Here it is! Someone else already posted it. MM is the first vital step. This is the second.

http://www.forexfactory.com/showthread.php?t=4073

Well, my exercise in discipline is coming to a close.

I have taken only good setups according to my system. I have followed my trading plan, other than taking a few afternoon trades which is against my rules.

I know all systems have losing days, weeks, even months. A system should not be abandoned because of a string of losses, and should not be changed often. That is discipline. But how long do you stay with it?

Doing what you should have done on yesterday's trade is a good way to chase your tail and turn every trade into a loser. Obviously you need to stick with your rules. But at some point it comes under "learning from your mistakes". If you don't change, you're not growing.

I've lost every trade but one for the last two weeks. At this point money management is only prolonging the pain!

So, the key is a deep understanding, rather than a superficial one, of how a system works. If you know what "edge" the system gives you, then you'll know when it won't work, IF you can also correctly assess market conditions.

New addition to trading plan:

If I have less than 50% profitable trades in any given week, I will re-assess market conditions as pertains to my strategy / system and decide whether to modify the system or change to a different system that is more suited to the current market.

I've been lazy.

I had a system that worked well the first few days, so I programmed indicators to sound an alert whenever a setup occurred. That got me by for the last month or so, and I haven't been working too hard at trading. Sleep, play, go off and do other things, trade when an alert sounds. Pretty handy!

I've studied some, and worked pretty hard, but a lot of time I should have been working, I've been playing.

Now I need a method for ranging markets, and I'm behind the curve. I should have anticipated, and been ready for, changes.

It's human nature to think that things will keep going the way they are. That's what causes "bubbles". Things are going good, everyone thinks it can only continue up. It goes down, people start to panic and drive the bottom lower.

I haven't been doing what I said, and have not been trading well.

Journals are good. It's good to go back and read them. I wish I had done so back on 5/16 when I said I wasn't doing well.

Write down your AHA moments in the journal, take notes when you're trading well, then when you aren't trading well, go back and read.

I talked to my mentor and we came up with the proper solution. I need to tighten the money management on swing trades.


Also haven't been following this. Funny how you fall into the patterns your mind feeds you if you aren't disciplined.

Also haven't revised my trading plan lately.

WHAT THE HELL HAVE I BEEN DOING?????

Since I wrote the above, trading has become profitable again. I'd had the talk with my mentor on the evening of 6/4. He told me to get in the habit of taking a profit. Start with 5 pips a day as a goal.

Since then, my daily pips have been: +22, +11, +20, -25, and this week, +34, -21, +20, +10.

I have a couple swing trades still open, and at the negative now, and the positions are small enough that I don't sweat the swings. As much as I'd like to trade like Jacko, I don't know if I can make it work.

This will be the first profitable week in a couple months. Now, if my swing trades both go to the stop during the news today, it will wipe out my week's gains and then a little more. I need to change the plan for these trades and protect my gains.

Well, that's turned out to be a good move. My swing trades were 1/2 position, I took them both to 1/4 position and put my stop farther away to avoid the whipsaw.

The news has taken both farther negative. Must have been bad news for the dollar.

I didn't want to take the losses, and reduce possible profits on the trades, but as it turns out, I managed the trades correctly. I should have had 1/4 positions in the first place.

Or, take the profits when they were there; both positions have been in the money since opened.

The greater the number of conflicting theories among experienced traders about a particular aspect of trading, the higher the probability that there is no best way.

If any one method were clearly better, everyone would be using it, and there would be no discussion and no disagreement.

Or one could assume that not everyone thinks and acts the same way and that personality and trading styles need to match and therefore are differentiated.

Well, I'm still doing it.

Shifting timeframes.

10 pips a day will make a person rich. Some days I take the 10 or 15, quit for the day and can handle that.

Then I read Jacko saying how he "just made an obscene amount of money", and my head goes wrong. And basically didn't do much trading to get it. He just puts on a position and goes off to Europe or somewhere and looks in it from time to time.... gawd I wish I could trade like that. (Actually that's what I do with my "big" money, it's in funds and I beat the markets year after year.... I will retire a millionaire. But I can't touch that, and right now I'm broke! Need to learn to make a living!)

Or, I sleep through huge move after huge move during the asian or eur sessions, and in the morning what I've missed, and my head goes wrong. I start trading like a total beginner. Buying tops and selling bottoms, time after time, sometimes picking turning points so perfectly it's totally uncanny.

It's just like those big moves they show you on the example charts in all the courses. You're a beginner, you learn the methods, you expect it to work like the guru's demonstrations, you want the big move, and you go out and trade like a beginner.

Like I did last week. My head wasn't right.

The solution was to use different money management on the swing trades. But, why put 1/4 position on and go for 100 pips, rather than put on a full position and take 12 pips and 13 pips? Same result on the bottom line.

Rob Booker says get the 10 and quit for the day. If you don't make it today, start clean tomorrow. Good advice. Many times I get the 10, but, gosh I lost 20 yesterday. I should make 30 today. Like I did last Thursday, I can do it again.....

I need to get out the trading plan, nail it down, follow it, and really get some discipline on board.

I just don't know what kind of trader I am yet. It varies from hour to hour, day to day.