The clarity thread

-- eurusd trade update --

The accumulation process (sells) is completed on our side, no more entries for this trade.
The trade plan remain unchanged.

to be continued

**Edit:
Image added

-- eurusd looking ugly --

Yesterday high has been just taken out, at this point the original plan has to be updated to the new dynamics.
Our new level to watch to secure our trades or even take profits is friday's low.
So this is what happen when taking not safe trades (against the trend), things can get ugly in a matter of little time.
As an additional note, if the market don't stop rallying soon enough, taking the loss would be my solution.
This was a riskious trade from the beginning.

-- eurusd update --

Ok, considering this trade have no reason to be covered in this thread (as it is essentially riskious), this is the pre-final update (the next one will come at trade closed, whatever in profit or in loss).

Here we are, the market euphoria has been temporarily cut off by the sellers above yesterday high resistance.
Our short-term support/target to watch remain friday's low, with an eye opened on wednesday and september lows (though we are probably going to take profits before such levels are reached).

The upside risk has been lowered in the recent hours, however considering the longterm uptrend, such risk is still there.

As a constant note, i want to point out that this trade represent exactly what you should avoid in order to make a safe and long-term profitable trading.
And as you can see, me too am not perfect and i break my own main rules (don't trade against the trend) from time to time.

Said this, the trade plan continue to make sense, let's see how it will end up!

Next update will come after the trade will be closed.

Cheers

**Edit:
You may probably notice the difference of how a trend-direction and a counter-trend direction trade is handled, emotionally.
On a trend-trading trade, we don't really care about a temporarily drawdown, can it be of 10 or 50pips or whatever, no problems.
On a countertrend-trading trade instead, a 20-30 pips drawdown is already emotionally painful.
That is an interesting thing to be observed.

You may probably notice the difference of how a trend-direction and a counter-trend direction trade is handled, emotionally.
On a trend-trading trade, we don't really care about a temporarily drawdown, can it be of 10 or 50pips or whatever, no problems.
On a countertrend-trading trade instead, a 20-30 pips drawdown is already emotionally painful.
That is an interesting thing to be observed.


Nice to see you teaching how to deal with such situations, (and you are doing it LIVE) when market don´t do what is expected great lesson here Spaceduck...

Do you mind explaining how do you build your exposure in the market, for example yesterday you acumulated sells while the market was below the intraday resistance, but then today market breaked that resistance and you entered a few more sells aiming for the test of support, so my question is: Do you have any kind of rule for your risk let say 2% 5% ? DO YOU BUILD YOUR EXPOSURE UNTIL THAT LIMIT IS REACHED ? AND IF THE MARKET KEEP GOING AGAINST ?

MM is still a stone on my foot with this kind of trading, can you expand on this please...

Regards

Yes, if market don't do what is expected but you have a trend that "protect" you, that usually mean a better price to buy/sell, but when the trend is against you, you never know how bad things can become. Scary.

As for the exposure, most of my exposure was built yesterday and today (below yesterday highs), the trades i've opened above yesterday high was very littles in volume, just for the sake of sell high, not impactful positions at all (useless in terms of profit/loss).
So yes the rule i follow in terms of stop the losses is just about a maximum % of the account i risk on each trade, and before write here how much it's such percentage, i need to write a little disclamer.

Disclamer:
I can think about myself as a "succesfull" trader with 10 years of experiences, and overall as arrogant it may sound, averagely 80% of my trades are profitable ones.
So, my personal risk aversion on each trade is extremely high and i really advice any reader to not care about it. It is dangerous, it is emotionally crazy, it can make your life way difficult.

My personal rule in terms of maximum risk of each trade is around 40% of my account (sometime even 60%).
It's clear that when a trade go horribly wrong and i am forced to take the loss, i burn a good part of my account, and it is emotionally crazy.
During the years you learn how to deal with it, it still appen from time to time to loose control and destroy my trading station, only to buy new and more powerful ones soon after.
Usually when i have a wrong/bad trade i take a holiday from trading of one or more weeks to calm my mind.

On the other side, a good trade literally double my account, and an average trade make a 50% return, so i still use a good risk-reward ratio after all.
An additional note to explain more, personally i can risk just 1-2% on each trade, and still make enough profits to make a perfect living, or just make a few trades a year and yet make enough profit to make a perfect living, it is not about make profits for a living.
I like to think that i'm not the only "weird" trader in the market, i know in this business again and again the word "greed" is a well known one, at some point you want to push your limits, to see how far you can go, i've tried and continue to try many things in life that normally bring emotional well being and satisfaction, but high leveraged trading is still the number one for me.
Yet even if i would lose 90% of my capital on one trade, i would still be in the "confortable" zone in terms of personal savings, so i'm not totally crazy.

All this words just to explain that risking half of the account on each trade is not a normal thing, and is not surely part of the long-term profitable long-run trading at all.
If you have not a solid understanding of the market (and even then, we know that everything can happen in this market, there is no "sure" trade), taking extreme risks in terms of leveraging is the best way to end up broke in a very short time.

I'm here just trying to teach/show something about the markets, the job of the reader is to assimilate the good things and discard the bad ones, on my side i do write clear disclamers on each "bad" thing, so that would be easy for the readers to spot them.

Thanks!

-- More about trading --

About the learning process of trading, it is clear that the assimilation and the focus of the brain/mind in trading is closely related to how much you invest in terms of emotions.
Let me explain, this is my personal theory, a result from my experiences.

For example, you can trade a demo account for many years, and yet learn little or nothing.
You can then trade a live account and risk very little, and learn a little bit from time to time.
You can then trade a live account and risk big, it will be painful, it will be an alternation between heaven and hell, but you will learn much, and fast.

The more you invest (emotionally), the more you can learn.

This is the basic principle behind my risk aversion.
I know to many people can sound meaningless, but i have my ideas, and i follow them.
**Edit: And i thank you for give me the opportunity to express them!

-- About MM and stoplosses --

Apart from my personal risk aversion, where to put the stoplosses or take the losses.

As for my trading, the stoploss stand usually around 100-200 pips from the entry price, it depend on the trade, on the particular market/instrument volatility, on the foundamental week (NFP, FOCM, CentralBanks interest rate decisions, Wars, whatever), however the average range of the extreme stoploss is about 100-200 pips from average entry price.
Then i may use a stoploss order or close trades manually, the average distance is in the range of one or a few hundred pips.

Then of course if we are talking about commodities markets like gold or oil, the average "stoploss" can be around 400-500 pips (about equities/indexes i don't use to trade such markets, currently keeping an eye on s&p500 for a long-term short-selling in the eventuality of a major selloff/financial-crisis to happen, but i am very cautious on the idea of trade such markets, they looks yet too much volatile and manipulated, riskious).

respect to you you Spaceduck, as for trading live i do agree that it´s the only and fastest way to improve emotionally but i also
find useful to trade demo at least to understand some aspects about the market.

There is not long ago that i discover the beauty of trading naked and following the flow of the market given by HTF (H4 AND HIGHER)
i have traded live already and i still do when i have time to be in front of my screens ( hopefully next year will become full time ) but demo
is still my teacher in terms of price action reading.

40 % i take my hat to you

ahah, yeah don't get me wrong when i say i've 10 years experience half of my experience is about demo trading, 25% is of mini-accounts trading, and only the last 25% experience (the last 2-3 years) is about "big" live experience, or we can say trading for a living.

Yes it is a long journal, but it always go forward, it's a life-time experience.
When i say demo trading you learn "little or nothing" is an observation made from my point of view, years ago my point of view would be of "demo trading, it's a perfect way to learn soo many things".
You know it's like a "bubble" (in its financial meanings), a big step (learning) now in demo will be seen later as a little step, and what is big now will probably be seen as little in the future, the learning curve always go up, with an increasingly speed.

And if i should say the truth, the technical knowledge i have now about the markets is not really more sophisticated than it was 5 years ago, the markets are still unpredictable as they was years ago.

Maybe it is something about an unconsciously understanding, something that is not concrete enough to be clearly identified, but yet trade after trade you start to get it.

What can i say, demo, live, any kind of trading, trading is something that like anything in life if you do it long enough you will start to grasp it's essence, and of course you (you or anybody) would need to sacrifice something in your life in the process (time!!!).

But ok i personally think it's worth it, there are people who "sacrifice" years in the pursuing a graduate degree, and then still have a low income.
From that point of view retail trading is a good business, you may not attend an university with papers attesting your status, but you can still buy a degree with fx profits if you like

I agree but may add that everyone will have is own path is this journey, but earing someone share their experiences is always helpful (and inspiring)...
i have friends that used to studied while listening music as for me i like to focus with absolute silence, no one is equal, the same applys to trading.

What i do hope is, even thought i can´t copy paste you i migth get something that may shorten my leanirng curve thru your live experience

Thank you again SD. You've done a great job expressing your views on trading and life. I applaud you and hope you will continue.

exactly how i trade.. its not about making money
its amazing, the emotional ride, crazy and totally worth it

-- eurusd final update --

Ok, we've taken our tiny profits on this pair, prematurely.
As for the reason, eurusd remain a good trade with good potentials, however right now the market offer better opportunities with less risk and a higher potential reward, so we've just moved our margin from one instrument (eurusd) to another (will cover in the next post).
All for all this eurusd still gave us a decent profit, so nothing to complain about.

Thank you for nice words, really appreciated!

-- audusd --

The image speak by itself.
The pair may be ready for a dip and eventually a downtrend resumption (or at least a sort of doublebottom), we keep focused on the short-medium term, targeting just below the lows of the current month, keeping an eye on moonday (this week) lows, as new buyers may be found there (yet chances are low).

to be continued

Oh well.. nothing to see here

I see a ton of humbleness in you mate.
But i have a few 'thoughts' if you will...:

- When you 'double' your account, do you extract your excess gains from your trading account or do you compound and repeat? Because if your risking huge portions then compounding repeatedly may not be the smartest way (just asking..).

- You say predicting direction is not the way to go (and i totally agree with you) yet you use stops at 100/200pts away. Stops in a sense are predicting aswell. However, your stops, are they arbitrary or are they based on anything specific?

Keep going, its nice to read into peoples real experiences.

Regards

Hello, i used to keep my account on a predetermined balance level (withdrawing profits every week, no compounding) during the last few years, it was fine.
Now i'm going for the compounding way just from 3-4 months, it's something new also for me, in term of risk it's surely more riskious, but i think like anything in life if you want to move to a higher level you have to take higher risks, at the end i guess it is a matter of personal choices.

By the way, the exposure i take on any particular trade (lotsize, leverage, volume) depend strictly about the confidence in each and every particular trade, the involved risk, the expected profitable % in terms of chances, the volatility, the recent foundamental news and the coming ones, the technical situation, etc. etc..
It's not like take huge risks on every trade just for the sake of trade big, and the same for the rewards, they do come with time but i am not really obsessed with that, all i care is learn something new everyday.

About my stops, i usually keep them far enough to not be reached by intraday noise, 100-200 pips are usually enough (on pairs like eurusd), therefore most of the time if the trade plan is correct the stops should not be reached.
Yes in a sense is a way of predicting, if you look every trade in the market is a prediction, there is a level of unpredictability in the market but if we are here it means there is also a level of predictability, we just need to trade when predictability is stronger than unpredictability (this last sentence is just weird).

Thanks!

Looks like it will travel quiet a long way to downside, but have to wait & see. I am flat on pretty much everything this 2-3 days....no real trading here, missed some triggers when I was sleeping, UsdChf was good buy yesterday.... you did good on you EurUsd..

Yes did good with eurusd, but moved my exposure to audusd just before the selloff.

This kind of situations let me feel teased by the market, time to get off for a while.

Cheers