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r3algood's Trade Journal: Overcoming Fear in Trading

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r3algood's Trade Journal: Overcoming Fear in Trading

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  #1 (permalink)
Little Rock, Arkansas
Posts: 198 since Jul 2011
Thanks: 106 given, 108 received

First, I would like to thank Big Mike for the futures.io (formerly BMT) website and all of the possibilities futures.io (formerly BMT) brings to the table for traders to be able to learn and develop themselves in a positive environment.

Second, I would like to thank those who have posted journals and for the insights gained from each. I believe it is such a great tool to be able to read other's journals and reflect on their thoughts, emotions, and strategies and to have a chance learn from them. I hope that not only will my journal help me in the long run to become a more consistent trader, but that also it will help someone else to better themselves.

r3algood's Trade Journal: Overcoming Fear in Trading

I am starting my trade journal at a crucial junction in my trading journey. For around 5 years I have been interested in the financial markets, throwing money around with no clue for 4 years, and buckling down and seriously trading for the past year or so.

I have made dramatic improvements in my trading in just the past year. I have worked on developing my methodology (more on that in a bit) and trying to become consistent with it and I have come to a point where I realize what's holding me back isn't my entries, exits, or market analyses...

What is holding me back is fear in trading and the lack of confidence because of it.

While I am still working to become more consistent in my entries and analysis, it is specifically negative emotions once in a trade that is keeping me from becoming the best trader I can become, and I hope that by keeping a journal of my trading, including my thoughts and emotions while before, during, and after a trade, I can better hold myself accountable and be honest with myself and learn from my mistakes.

One of the biggest problems as a result of my fear and lack of confidence is not letting trades reach my targets. Trades may go a few ticks in my directions then I get a sudden NEED to get out and "take what's given". Through my keeping of a journal I hope to conquer this fear and become a better trader.

My methodology

I day trade the Emini S&P 500 contract (ES) on an intraday basis.

I trade the 5 minute candlestick chart with a 20 period EMA.

I trade price action patterns: pullbacks in trends, channels, and reversals.

My charts look like this (the floating "0:57" is a bar timer):

Sample analysis of above chart: Failed trend channel overshoot into a small double top around 15:00 which should lead to at least a test of the 50% reversal of the prior channel, if not a full reversal test of it. 3 legs down then attempts to rally then a perfect 2 bar reversal right at the EMA should feel confident for 2 legs down and test the beginning of prior channel from the day before.

I think the above analysis while trading, take the trades, then because of fear and negative emotions I fail to let the trades run to my targets. I hope to correct this negative attribute through keeping of my trade journal.

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Congrats on starting a journal.


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  #4 (permalink)
Little Rock, Arkansas
Posts: 198 since Jul 2011
Thanks: 106 given, 108 received

I am facing my fears one trade at a time.

I went long on a test of the bull trend line thinking 1400 would act as a psychological magnet. Took the trade then referenced my 60 minute chart (2nd embedded picture) and pictured a rising wedge with a failed breakout (the move to 1403 earlier today) and began to think we would test the other side of the wedge. Thought about my entry relative to this and decided to scrap it for a small gain.

Wanting to get short, I waited thinking I would let price rise to around 1397-1398 for a low risk, high reward short. Seeing price was not going to make it there I went short targeting the smaller blue trendline (not the bottom of the wedge).

I faced my fear of suddenly wanting to take a 1 or 2 tick gain with price in my favor and just sat on my hands. Sitting through the first "pullback" was torture. Every tick I wanted to close out the position but I let it keep running. Determined to let the trade either hit my stop or my target I kept letting it run. I added on to my position as the market kept falling but I could have done a lot better job of that as the market kept falling. Price hits my target and I'm out.

1. Work "Top Down" from higher time frame to lower time frame
2. Let trade do its thing, don't micromanage
3. I am my own biggest enemy when it comes to trading

5 Minute ES

60 Minute ES

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  #5 (permalink)
Little Rock, Arkansas
Posts: 198 since Jul 2011
Thanks: 106 given, 108 received

Saw triangle/wedge developing and shorted at resistance, targeting the bull trend line.

Not the best entries, but I held the trade like I should have (facing my fears).

I feel like the journal is helping me to overcome my battle with the psychological aspect of the market.

If the triangle/wedge breaks to the downside could see a measured move to around 1385 or so.

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  #6 (permalink)
Little Rock, Arkansas
Posts: 198 since Jul 2011
Thanks: 106 given, 108 received

Updated 60 minute chart

If I traded longer term charts I would go short on a break of this channel and hold for a test of the lower bull trend line.

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