I've been trading with real money for about a month now and wanted to share my thoughts and experiences. I won't go into a whole lot of detail about my past, except to say that the first time I traded for real was 18 months ago and that ended in the obligatory blow-out. Of my original $15,000 I lost about $13,000 in two months. I retreated, regrouped, learned, adapted, practiced, and learned more.
This time it's going much more swimmingly, probably because now I actually have a clue, and I feel confident I can one day build my account to where I can make a living trading. Here's what has struck me the most my first month trading with real money: the biggest mistakes I've made weren't my losing trades. The losing trades were all good decisions, taken at the signal given, and the risk was well-managed. My biggest mistakes have been the trades I did not take that would have been winners. The signal was there, the market was telling me do it, but I demurred. I think, "Well, let me wait," or "I've just lost two in a row and I'm scared." Next thing you know the market starts a beautiful trend and I'm left in the dust. It hasn't happened alot but it's happened a few times.
In these four weeks I know for a fact that I've forgone about $3,000 in profits on trades I did not take. For perspective, my account size starting out was $15,000 (it's appreciated some, thank you) and I risk $500 per trade. So $3,000 in a month's time can really make a difference. For instance, this week my system was telling me to sell the September Swiss Franc at 1.188. I didn't, and the next day it's as low as 1.17. I kicked myself.
Take your signals when they come, let your profits run, manage risk. Everyone knows this, but when you trade for real you truly see the importance of these three rules. I'm real good with the last two, it's that first one I need to work on.
The psychology aspect is definitely the most important part of trading. Forget what I feel, think, hope or want. All that matters is what the market's telling me. Take the signal, place the stop, the rest is out of my hands.
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good stuff. always remember that your edge ( your risk to reward ) will give you the confidence to continue to pull the trigger. no matter how many losers you may have you know in the end your ratios will bail you out.
I noticed that if I pass on two (profitable) signals in a row, and trade on the third signal, it is usually a loser. Why? Because I was mad at myself for the lost opportunities and was eager to "make money". So when I jump on the third signal, it is usually a less than ideal signal and is a little late in the trend. So now I have to tell myself not to let past trades or skipped trades influence me.
Sounds like your on the right path. Don't waste time worrying about what you missed, it happens to everyone. Just stayed focused on taking the best trades and even if you do leave some on the table remember there's nothing wrong with taking a profit. What you want is to be consistant and be happy with whatever the market gives you ..they can't all be homeruns. Regards, Kbit
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This is not uncommon but you need to find out the reason to why you take some trades versus when you don't take valid setups that appear. Simply, I wouldn't be surprise if there's a commonality or specific types of precursors showing up that spooks you from taking particular types of trades.
Therefore, if you can identity those precursors, you can then develop a trading plan to reduce the number of missed trade opportunities. For example, do they tend to occur after a trade loss? Do they tend to occur in increasing volatility or decreasing volatility trading conditions? Do they tend to occur during particular times of the trading day?
My point is if you can identify why such tends to occur, you'll be better prepare to trade when you recognize those precursors showing their face again.
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