This Tuesday, I came back from the Easter holidays and blew up a big part of my account. (50%) - i was very frustrated in not capturing the big moves from last Friady's NFP, which I predicted and could have traded perfectly, but decided against. This horrible Tuesday, I wasn't well rested and started taking all kinds of horrible trades. Nothing planned. (I actually have a trading plan).
Looking backwards I see a few major problem areas:
- not following my own plan
- playing with too much leverage while I know better
- not having fully developed my plan
- lack of self control. (I know, I shouldn't take more than 5 trades per day, that Tuesday, I took 30 trades, all losers).
I'm glad that this topic is open and active. At least I can use the forum to stay honest.
- finish my trading plan
- re-commitment to self control.
- making sure I have a 2nd income stream.
I think I can't relax and focus during trading, because it don't have enough funds to support myself without trading.
The following user says Thank You to MFX1 for this post:
For me, When i first tried with my first account this is what I did. Had recently graduated from uni. Basically worked for a few months saved up. quit work and tried to become a trader.
Since then I went out and got another job that has more flexible hours. Makes a world of difference psychologically to know that you do not have to make your own over leveraged account work as your sole source of income.
Having the 2nd job allowed me to move ahead with other life goals - I got engaged!
None of my big daily losses and my account blew ups started with a predetermined plan to trade size.
The recent S$22.5K big loss started with 1 lot Mini HSI and 1 lot Mini HHI short position which I took in the last minute before the 11.45 pm close of the after hours trading session. The plan was to carry a small HSI and HHI short from the night close to the morning open.
The 1 lot Mini HSI short was filled at 26804, 560 pts above the afternoon HSI close of 26244. At the morning open, my Mini HSI short has a 93 pts profit and my Mini HHI short has a 42 pts loss.
The additional HSI & HHI shorts that I took within the first 15 minutes after HSI/HHI futures open at 9.15 am were not planned. They were taken based on my scalping instincts and I had about S$1.5K floating profits at the peak, before the cash market opens at 9.30 am.
I had expected HSI & HHI to trade lower after 9.30 am. Why I did not exit my shorts when my losses were small, I have no answer.
For the last 2 years and this year I have been trading with 1 lot per click default position size. I did have a burning desire recently to take more risk and hold more for more as my average daily profits is just a few hundred, when I have them.
I have traded very cautiously the few days before I got hit with this latest big daily loss. I could sense that it is coming but I could not stop it from happening.
The following user says Thank You to JacLau for this post:
Essentially I have 3 main rules in my trading plan:
1) only ONE trade per day (pattern trading during main hours)
2) a strict optimized stop loss - NO overruling!
3) a NO trade day after previous day was too volatile
With these easy to follow rules and some discipline to push them
through - a loser day and one more again do not hurt really.
Market is there every day - so as winning days bring more points
than the losing days your account will thicken again.
Of course this is not meant to convince anyone. But using a rule
plan and following it with discipline and maybe starting to journal the trades here on futures.io (formerly BMT) can help to stick to one's own trading plan.
And will be a step to success.*
Hope this helps.
* for those who are not familiar with my journal where I announce
the trade before taking with entry and exit TIME - just read it here on futures.io (formerly BMT).
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Around 95% of human population today doesnt know how to relax or havnt experienced the blissful feeling of relaxation by turning off the mind chatter. True, we all experience glimpses of it when we are awed by certain experiences but are unable to sustain it or invoke it at will. Observe a cat or dog after a good meal, how they stretch and relax with ease. We are so wired, and hooked into everything around us, every living cell in us is throbbing with stress, worry and anxiety.
If you start observing your thoughts and what is derailing your discipline, focus and objectivity, you will learn a great deal about yourself. Consider trading as an opportunity for self improvement and awareness, all the areas of our lifes we easily ignore to deal with. Trust me trading will bring all those daemons out, either you face and address them or continue to destroy trading accounts. I did a few myself including a $70K account trading Options 5 years back, after learning about option trading from few friends. I remember the stress and rush and decided to deal with it if I continue to trade. Honestly sticking with it and strive to improve myself is the best decision I have ever made.
Last edited by rahulgopi; April 12th, 2015 at 03:44 PM.
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