2023W21 Review

+$29.50

-91.1pips

81.3% win rate

A strange combination of numbers...

As late as Friday afternoon 3:30pm, the drawdown was more than 15% of the week opening capital. It was deflating and shitty feeling.

There were emotional trades, price chasing, but the biggest failure was still the inability to identify an opposite one-way train.

Managed to save the week into positive with the subsequent 9 positive trades, some with double lot size. In a way, it's a plus in trade/lot management

Grade: C+

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2023W20 Review

It's a week that I lost just over $500 (on demo account), that's about -10%. But still I don't think it's a terrible week... except the last handful of trades

All was quite well, with some small gains and rather big losses, perhaps the expected return with this high hit rate and low return strategy.

Emotion... is still biggest thing, even on a demo account. 

When I was on winning streak of 2, 3, or 4, I was able to stay rational, be patient, stick to the plan, wait for opportunities to show themselves instead of keep looking for one, no FOMO even when price ran away.

But when winning streak got longer, like 4, 5, 6, then complacence and arrogance started to creep in. 轻浮，浮夸，不严谨。

The worst thing, however, was after one or two losses... then I tend to become aggressive, go on offensive and try to regain lost capital,  start to tweak my game plan, which may not be a good thing for an inexperienced trader.

In terms of market movement, biggest killer was still one-way train movement.

I trade on "reactions" and "rebounds", 10p can be obtained, even on a one-way train. But one-way train has another voodoo... which is speed. 10p may be hit in a few seconds, or 1 min, and that is very exciting, tempting me to catch more small profits.... then inevitably, will get trapped before too long.

Grade: B

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Emotions!

"Whether you believe it or not, it is a fact. Many traders psychologically sabotage their trading and they do not even know it. They are not prepared for the flood of emotions that sweep over them when they are trading and, therefore, they are unable to deal with them. 

When the bank account balance is on the line, you will experience greed, fear, and denial. You will react in ways that you did not anticipate and, at least part of the time, you will take irrational and self-destructive action. In order to succeed as a trader you must prepare for the worst, just as a jet pilot must prepare for an engine failure. You must recognize the emotions that you will experience when you are in both winning trades and losing trades and you must be prepared to deal effectively with them. Design specific strategies for the market’s movements and be ready to execute those strategies when your emotions get fired up. If you do not recognize the power of emotions in trading and if you do not prepare yourself to effectively deal with them, you will fail. 

Do not destroy your next trade by worrying about and reliving your last one. If you plan to be a long-term player, there will be hundreds and maybe thousands of other trades."

-- Winning the Day Trading Game, Thomas L Busby,
Chapter 5 "There's No Crying in Trading"

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Be a Good Loser

"As weird as it sounds, learning how to lose is really learning how to win because we will all be losers at one time or another. You must know how to deal with losses so that they do not defeat you. Winning  traders put their bad days in perspective and keep on plugging away. They do not ignore their mistakes; they learn from them and get better and stronger."

"To be a winner you must learn from your losses and eliminate mistakes you have control over."

-- Winning the Day Trading Game, Thomas L Busby,
Chapter 5 "There's No Crying in Trading"

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2023W19 Review

The first week in a long while that I'm fully on a demo account

My strategy is to trade for bounces at key levels, and aim for small tp, typically 10p, or occasionally 20p or a bit more if it's in active US sessions.

After one week, it seems quite workable. While it's not a blanket statement (e.g., if it's a a big move that will easily cover a range of 150p or 200p in 15 minutes), prices tend to react at key levels.

So, provided if there's no FOMO, and wait patiently for entries close to key levels, aiming for 10p of reaction bounces while risking 30 to 60p is usually viable.

Anyway, it's still a negative week, owing in large to the two trades that resulted in -90p. By the way, that's a 200p move in 20 minutes... exactly the kind of move to beware of.

Don't overtrade

Don't chase the action

Be patient

Grade: B

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The sinking feeling when averaging downs go south

Some familiar feelings when the market goes firmly in the opposite direction.

This method of trading is known as averaging down and, believe it or not, it is a method used by thousands of traders. In fact, it is a strategy that I used for years. 

I remember the last day that I used it. I was trading the S&P Futures. At that time I always placed my orders in thirds. I bought the first third of my contracts. The market immediately moved against me and I was losing money. Fear reared its ugly head but I refused to acknowledge it. I responded by buying another third of my position. The market continued to fall and I continued to lose. It was getting harder and harder to stay calm and keep panic from sabotaging my strategy. My palms were wet with sweat, but I stuck to my plan and I arrogantly bought my final third. My losses kept getting greater and greater. I was getting sick.

On this particular day, the bears were clearly in charge and the market continued to fall relentlessly. My losses were increasing every second, but I just held on and waited for the reversal that I was sure was coming. I would not give in to fear and I would stick to my original plan, no matter what. After all, I was a professional and I knew how to analyze the market, right? I just needed to give the market time and it would validate me. Just hold the position and wait. This was no longer a trade, this was a war. 

I waited for the market to shift and turn my way. I stared at the profit and loss box on the trading dome for what seemed like an eternity and I watched my losses increase as I sweated and my stomach flipped. My original arrogance gave way to fear and panic. I had not considered being wrong and I had no plan for dealing with the fear I was experiencing. I was immobilized. I felt like a pedestrian standing on a street corner watching an automobile headed straight for me, but I could not move to get out of the way. I was a sitting duck.

On that day, the market did not reverse and eventually my losses were so huge that the truth hit me and hit me hard. I could not deny it any longer. I was wrong! I had been a bull in a bear market and I could not buy my way out of my error. By adding to a losing position, I had only increased my losses and dug myself into a deeper hole. Those are the days you want to forget.

-- Winning the Day Trading Game, Thomas L Busby, pg 66 

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2023W18 Review

Desperation

Petulance

Vengeance

Demotivation

These were among the emotions that drove me this week

No surprise, it's a devastating week, where I lost over 200p, $100, or about 30%

The only surprise was I still have my account

But with just over $100 remaining, it's as good as busted

The 20p challenge didn't work for me, at least not in this state of mind

Was too desperate to prove something

After taking a few days of break, I've reverted to trading demo again

Turned out to be rather positive performance, with less emotional stress and fear

So... how do I know I'm ready for live trading again?

1. When I'm profitable with at least +80p weekly gain for 4 out of 6 profitable weeks
2. When I'm getting Grade B for 4 out of 6 weeks of at least Grade C
3. When I can declare that I'm on top of my emotions while trading a demo account

The last one isn't scientifically measurable, but let's start like this...

Grade: E

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Three Most Destructive Emotional Forces in Trading

1. Greed
2. Fear
3. Arrogance

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2023W17 Review

A -23% week...

All rules went out of the window

Desperate and revenge trades

It's taking a toll on my emotional well-being

To take the 20p challenge?

The idea is good... an I aim 10p at a time... but the problem is with the SL

100p SL? 30p SL?

Maybe I should go back to "square one"... with 100p SL, 1:10 play

Grade: D

~~

2023W16 Review

Bad week, -119p, with a win rate of 69%

Several times of closing trades too soon due to fear of losing, ended up leaving money on the table.

However, also at least 3 trades that were profitable because I closed early enough, otherwise would have been losses.

Big individual losses are still the culprits, twice hitting SL of over -100p, twice more over -30p.

One -155p here:

It came right after a salvaged trade which saw a floating -100p became a +20p profit, took 7.5 hrs from 1pm to 8:30pm. I had the feeling that after dropping over 100p from the day high, it's a good time to buy. 

It wasn't.

There were also several false hopes along the way, with long pinbars hinting that a bullish reversal might be on the card. It's a bad situation, but it'll be too harsh to say it's a bad trade.

Another -133p here:

Bought at a key level of $2000, with a stop loss that covers the next key level of $1990. Turned out the support was as low as $1980 instead.

In hindsight, even a 200p SL that covers both key levels wouldn't have been sufficient to turn a profit.

Another bad situation.

One lesson learnt:

There might be opportunities to recover losses after a big losing trade, but it's important to keep emotions in check while doing a recovery.

Grade: C

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The Four Fears in Trading

1. Being wrong
2. Losing money
3. Missing out
4. Leaving money on the table

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2023W15 Review

+26.2p in 24 trades

Had it not for that trade that won 99.9p, this would have been another bad week.

Then there are these two trades... 

I shorted near a support level, things were fine until price suddenly dropped aggressively.

FEAR of losing money caused me to cut my loss, and then FEAR of missing out made me chased the price. What might have been a +30 turned out to be a -87.

Trade #1 below was profitable, but was rather lucky to be profitable in short time? Shorted at a key number level of 2000 and took a profit of 18p. Had I aimed for more, might miss it and need to hold for much longer time.

Trade #2, SL was only 13p above a key level of 2005. An easy target for stop hunting. Should have had higher margin above 2005, and it would have been at least a breakeven trade, or a profitable one if I had the gut.

Trade #3, was trading a 3-line strike, but it's not strictly a qualified pattern because the bullish engulfing covered just under 50%. Seemed unlucky to have missed by pips, but it shouldn't have been a trade if I was cautious.

Trade #4 was influenced by Alex, who reminded me that a long was possible on the verge of data release. What a bull!

The next trade was telegram-called.

Trade 5, 6, 7 were plays after data release, capitalising a day support of 2005. Trust the range?

Then, there were a few "mistakes"... including one that clicked on the wrong direction, curious SL that's not big enough... 

Overall, not a terrible trading week because at least I could feel in touch with the market.

I practised more cautions, gave more patience, but still had moments of FOMO.

I was too cautious in setting TPs in some trades, especially US sessions.

55% win rate wasn't bad, but wins were small, and losses were big. Same old problem.

What could have made this week better?

• wait for retest and confirmation
• aim for bigger TP at US sessions

Grade? B-

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2023-04-12 Stop Losses, Stop Hunting, S&R

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2023-04-11 Trading Rules (XAUUSD)

DRAFT: 2023-04-11

Trade Planning (Beginning of trading day)

• Mark major supports & resistances from D1, H4 charts
• Check Bollinger Band upper, lower and mid-bands
• Check data release hours
• Check D1 ATR11
• Mark opening price
• Mark daily S&R around noon using m5 chart, at least 3 key levels on each side

Trade Entry (Assessing trade opportunities)

• How much price has moved in a direction
• Avoid entry if price in awkward positions between or before key numbers ($5, $10, previous peaks)
• Avoid entry if it's within 30 min of key data
• SL covering key numbers and next key level
• Any 3-line strike pattern will be a bonus
• Q: Is this a FOMO trade? Yes --> stop
• Q: Is this a revenge trade? Yes --> stop
• Q: Is the TP reasonable or is it influenced by previous trade(s)? 

Trade Management (Trades in hand)

• If positive
• Is the TP still achievable? Yes --> maintain
• Any sign of change in momentum? Yes --> consider adjust TP, or take profit
• What might be the impact of the next key hours?
• If negative
• Any sign of pattern change, from range to trend or vice versa? Higher tf MA crossover? Obvious break of S&R?
• Yes
• Any opportunity for defense trade?
• Cut loss?
• No
• Any chance to add position?
• Stick to the plan?
• What might be the impact of the next key hours?
• Reentry:
• Price retesting S&R level, could be reversal, or confirmation

~~

2023-04-10 Lessons on Fear

Red line = 1986, a support level I drew earlier in the day.

Missed the entry when it first tested the level.

Entered at the 2nd test, it went up before it came back down to my entry again, and I quit.

FEAR of losing money.

But it seemed to confirm the support, so I went in again, this time I made about 20p, before the price tested the support yet again.

Believing in the range and support, I bought again. It was consolidating fine, until price suddenly dropped very quickly, putting me in over -50p of floating loss. I closed the trade.

FEAR of losing money.

Then I thought the price will accelerate its fall, so I sold it at the middle of the candle, only for it to quickly pull back up, giving me a -30p realised loss.

FEAR of missing out.

Instead of 2 steady winning trades of roughly 40 to 50p, I ended up with 2 losses and 1 win, a net of about -60p.

Trades of recent couple of weeks have been heavily influenced by fear, ever since those big losses that knock my account from 800 to less than 600. Too cautious when letting profit run, too anxious to close a trade in breakeven, and of course, the trending market caught me by surprise. I was still using the techniques of range play, which I'm more familiar with.

Is it all about confidence? The fear of seeing the bottom of the barrel? The fear about my current financial stress?

I'm going to re-draft my trading rules and plans.

~~

20110616 - Trade Plans

GBPUSD











Bullish Bat pattern, however entry is placed just above 100% instead of at 88.6%, otherwise the SL will present too large a risk to cover the next support.

Entry 1.6076
SL 1.6031
TP1 1.6230
Trading Buddy Scale 8


NZDJPY











Bullish Butterfly pattern, coincides with 2 more Fibonacci levels. Entry placed at 127% retracement.
Entry 64.25
SL 63.90
TP1 64.90
Trading Buddy Scale 8


NZDUSD











Another Bullish Butterfly pattern.
Entry 0.7990
SL 0.7945
TP1 0.8060
Trading Buddy Scale 6

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20110602 - EURJPY Trade

This is a 8-pointer on Trading Buddy Scale.

Bullish Bat overlap with a larger Bullish Gartley.

1.618AB=CD overlap with larger 1.13AB=CD.

RSI Divergence.

Kumo bottom as support on the daily chart, also pivots for several Chikou turns.

Placed entry at 114.80, SL rather large at 114.20 (just enough, maybe too marginal, to cover 88.6% for a larger Bullish Bat). TP 115.70 for a risk:reward of 1:1.5.

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The Journey of Trading: Year 1

Today marks the beginning of the second year I am in live trading, well...sort of.

One year ago, I put on my first live trade. As I try to recall that moment, I was shorting EURUSD. It was kind of nervy, kind of exciting, and as I clicked on the button, I got that "damn it, go baby, go!" feeling. No surprise, it turned out to be a loser.

Come think of it, I did not ever think that trading forex will cross my path one day. I used to "trade" stocks technically (my first transaction was also on 1 or 2 June, way back in 2004!). I didn't really see the success that was being promoted at the trading workshop that I attended. Then I became less active, and eventually, when I've got a handful of losing holdings in my hand, like most people, I started to call myself a "long term investor". Two of those are still in my portfolio now!

It's only when my mentor, kind of by chance, attended a trading workshop that I got to hear more about Forex. Slowly, I started to be attracted to learn more about it through him. As he was also new to the game, he was very enthusiastic and gung-ho, pretty excited about a predicted big bear run and then everyone's gonna make a bucket of gold, and expedite the retirement plan by 10, 15 years. All these painted a rosy picture in my mind, and I was keen to set up a trading account already.

And I did. My account go live about 3 months after I played with a demo. Though my demo record was not anything to be proud of, I still decided to go in to real trades, thinking I could learn more things there that I couldn't with a demo account. That's very true. I felt the pinch of emotion, I chased price, I moved stop losses, I took profits prematurely (though not many profits to talk about), I checked the chart every 20 seconds even though I was trading an hourly chart setup, and basically my heartbeat was governed by the market. A winning trade would make me so eager to talk about my trade, and a winning streak would cause me to ponder about turning into a full-time trader. On the other hand, a losing trade would silence me a bit and a losing streak would cause me to look at the fund and think how many more trades I can lose before going bust.

In terms of method, following my mentor's footpath, I started by learning pw, then being exposed to Ichimoku and shadow methods, before coming to know harmonic trading. It seems my method changed rather revolutionarily, but in fact it is not. None of the methods contradict with each other. In fact, I would call the method becomes more complete, and yet not more complicated. In the beginning, even though there was a method in place, putting on a trade was more of a "trade what you feel" thing instead of "trade what you see". I knew about stop loss, target, and risk:reward ratio, but I didn't stick to the rule of defining all these parameters BEFORE entering a trade. I knew support and resistance have to be respected but when they were in my way of entering a trade, I would bet they might be wrong THAT TIME. Of course, I had to learn my lessons the hard way in the end.

There are so many things that can be mentioned throughout this 1 year, but really not all are worth mentioning. Before the end of the 5th month, I went bust. In fact I have not load up my account until now but I am not ashamed of it, that's why I said "sort of" in the beginning of this review. So, I am no exception. I am one of the 95% traders who loses money in the first year of trading. But one important thing I have learned recent months is, method is not important. Well, not the most important anyway. To quote Jason Stapleton, if method is the key to success, then 95% should be the success rate, not failure rate. That makes a world of sense. If one can win by finding THE METHOD, then winning can be acquired, there is nothing so difficult.

Besides my mentor and trading buddy, there are a few persons made an impact in my trading journey - Pesavento, Carney, Stapleton, Douglas, to name a few. They are important because they taught me (though not personally) to think trading as a business. To think in probability. To think psychologically. To not think in terms of money. To really accept losing as part of the business. To think that it is OK to lose. To realise there's always a next trade. To understand discipline. To learn more about myself instead of about the market. To understand there's no quick way to succeed. To know those workshops who claim to enable one to earn quick monies are liars (unless they also claim one can lose quick monies). To practise. To minimise (not eliminate, I don't want to be a robot, yet) emotion. To be patient. To plan my trade and trade my plan. Finally, to be RESPONSIBLE FOR MY OWN TRADES AND FUTURE.

Jason once said there are four stages in trading:

1. Unconsciously incompetent,

2. Consciously incompetent,

3. Consciously competent, and

4. Unconsciously competent.

After all the lessons and encounters in the past 1 year, I think I am consciously incompetent. Let's see if next year I can move up another level. If not, 2 years later.

Lastly, thanks to my mentor and Trading Buddy, who are very determined themselves and constantly giving me encouragement and reminders to move on. Let's work hard together!

~~

20110602 - EURAUD Trade

Bearish divergence formed on 4H Chart. Entry price also 161.8% projection from previous low, on 25 May. SL about 30pips. First target 1.3455, 61.8% retracement of current run. Next target can be 1.3432, 38.2% of bigger rally.

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20110503 - GBPUSD Trade

Bullish Butterfly formed on 1H chart, PRZ converges around 1.6590. Making day shadow around 60pips, though it's so early in the morning to confirm it say day shadow.

Entered short at 1.6588, SL 1.6538 (50pips), 4H chart just below EMA50. Target 1.6670 (61.8% retracement of CD).

Another risk is, it could be a bigger bullish bat, which will be completed at around 1.6527.

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