Lose small, win BIG

Decrease risk and increase your exposure. It is the way how to make money

I feel temptation to close all my positions and take a very nice profit... I have to be strong. Oh, being it big profit is more difficult than being in small loss.

All my built position start dying in small loss or BE. Yesterday I increased positions so it affects me in very negative way. It is really frustrating to see my work blown in to the air. This is trading and I need to accept it and build new positions from beginning.

This is one of those moments when I struggle and question if it makes sense. I have experienced it before but is still very painful and disappointing for me. I need again to find my inner peace and energy to trade. I hope some positions will survive and my equity will be in positive numbers I will stay in profit. Let's hope.

Regards,
Adam

I was backtesting again yesterday and found very interesting results. If I kept low risk (but leaving some space for position to breathe) and I took profit when it was reasonable big I couldn't lose money using any mechanical entry method. Patience and trend paid off in long-term.

For this reason I thought if it made sense to improve my entry skills or learn how wide SL should I use using different entry methods?

My discovery no. 1 is that it doesn't make much difference in long-term if I use 20 or 100 pips SL (bear in mind I trade S/R). Using wider SL can be even better than using tight SL because many positions survive and taking couple of 100pip SL won't kill your account. And if they do so, you don't manage your risk properly.

The biggest mistake is not being in position. That means that you should open position always when you feel it is a good time and doesn't care much about future. You won't be able to know if market will go up or down. And it is your job neither.

I'm really glad I made this test because I was afraid that I lost enough money (actually it was only around 100-200$ of equity as I did calculations after market close). I realized that my balance is still 20% up since New Year which is amazing result but very short-term to be happy about it.

Other question I didn't answered is whether to take partial profits or not. If I do, my account grow faster but my balance is decreasing and I don't feel good about it. On the other way if trend comes and I stay with bigger positions I will make double or triple which is a lot when taking 1.000+ pips profit with many positions.

There are still questions I need to answer and probably I need to learn how to lose in order to make much more money in long-term.

When less than 5 pips is enough

Attached Image (click to enlarge)

I decided to take a challenge. As I was increase my positions and still risk less than before I decided to learn to take ultra low-risk entry. I'll enter with SL 5-10pip and fix position and move SL to BE when positions moves enough in my favour. BE is a target.

I took my first trade. And was closed on BE.

My opinion has changed and I entered with 4 pip SL. I'm surprised how long my position can survive with so hilarious SL size. I'll aim for long-term movements of hundreds of pips.

Cross your fingers guys.

EURJPY attacking very important level. Don't forget to send a scout out

First attempt died on BE. I opened a new one. When markets open this one will be moved to BE too.

I want to have some short-term goals in order to see my progress and getting feedback often. I'll focus on pip gain and won't follow my USD P/L. I'll check my results on weekly and monthly basis. I'm curious how it affects my psychological state.

Let's start this week...

Good read. Keep writing.

Thank you for kind words, mate.

None of my positions survived. I feel little bit disappointed but fortunately there are others things in my life that makes me happy.

Started to build a new potential position on EURJPY



I placed SL around 200 pip away and I'll check it tomorrow after asian session.

Do you use price action to determine trade entry?

Basically I use only S/R levels. I don't trade price action as it is widely known. I mean I don't trade kind of candle patterns or something similar. I open a trade when it is on a good level. I'm waiting for level to pop up in my eyes. I try hard not to look for those levels, they have to pop up.

But yeah, we can consider it kind of price action.

Hope it helped.

I locked trade at BE after 100 pip run. I opened couple of other pairs as well today...

Aussie starting to grow

Improve your mental strength

All of you (traders) know that sometimes trading can be very difficult, mostly emotionally. Those hurdles may be avoid simply by avoiding some mistake from our side. Bear in mind, this article is aimed for trend traders. Situation may vary in different style.

Let's face some diffuculties in that kind of trading first.

One of the most difficult part for me is to see my position dying on BE after being in a big profit (more than 200 pips). To take a loss is not as difficult as give profit back to the market.

What used to happen to me quite often was that my SL was hit too often taking many small losers. Those losers could destroy me in any way. But those losers didn't allow position to grow because I was out and market has been going my direction but without my participation. Auchh. This might not happen to us. Trend trading pays off only in couple of trades a year. Those trades must be huge winners. If you don't catch it you won't cover your losers hit along the way.

Let's say we open 0.01lot positions each time. When we lose we want to lose only with that 0.01lot, but when we win we want to win at least with 0.15 lot. Those kind of trades will make hundreds time more than you lose on a single losing trade. I like to win really big.

In resumen, we want to have big position going in our direction which brings many green pips to our account. We must allow time to work for us and build our positions responsibly.

We make couple of mistakes when establishing our positions and those are expensive.

We don't give our positions enough space for breathing and we get wiped out by noise. Have you ever tried to place SL 200pip away from entry price in strong trend? Try it next time. You'll see how many of your positions will survive noise during day and you'll find them in nice profit. Can you imagine to get wiped out on USDCAD in these conditions? If you leave enough space for SL so many positions will go in your favour. Remember that SL shoud be hit only in case your idea is wrong. You can always close positions before it hits SL. No need to hit so big SL. SL is there if something really unexpected happens and for you to survive those shocks which happens from time to time.
Leave position breathing if market is trending.

About moving SL to BE. Don't move SL only because you are in profit. Move it only when you expect price not to come back to your entry point. If you still expect some retracement close your positions or let it breath. BE hurt because after hitting BE it goes again in your direction. At least in my S/R trading. Be patient. Don't be afraid to wait for couple of weeks if necessary. Problem is that we think SL should be 20 pips under entry price but we place it at BE because we don't want to lose. In this business we'll lose very often. I guess there is no other proffession where you are wrong and lose as often as in trading. Accept it. Leave your ego behind doors. You want to be right or make money? Answer this question honestly. I'm pretty sure everybody answers for money but most people want just to be right. We don't always know what we want.

Be proud your proffession shows you constantly that you aren't right and randomness makes your living in markets, not your perfect ideas.
Few suggestions to improve your trend trading:

Don't check your positions too often. Once-twice a day is enough
Don't stare at your P/L of position. Define your maximal risk and check your P/L on weekend. If you check it daily you'll be frustrated most of the time. On weekly basis you won't feel temptation to do something and you can enjoy beautiful things in your life. Spend time with family, friends, learn new things instead of staring at your P/L.

Uff, it took so much time to post it....

Good luck,

Regards,
Adam