My name is Isaac. I am a software developer in Australia. I've dabbled around with trading/investing as a curiosity for over 2 years now. I hope to be able to trade as a full-time job sometime in the not so distant future.
Here's is a rough timeline of my journey so far.
2011, I started out buying some mining shares on the ASX with a couple of thousand dollars in the account. Discovered that I was severely undercapitalized and the the underlaying would have to move a ridiculous amount for me to even break-even with brokerage.
In 2012, I started looking for ways to get in on price action without the account size. Obviously there was a greater chance of breaking even and making a profit, but also a greater chance of losing it all. At the time, the only other instrument I was aware of, and mildly attracted to were options.
It was super confusing at first, but I committed myself to learning all about the instrument (mind you, "all" at the time meant wrapping my head around the simplest concepts - writing/buying, call/put, intrinsic value/premium). I would keep an eye on the underlaying security, and simulate trade positions by buying either calls or puts.
There were a couple of boundaries that made it a relatively risk-limited learning experience - I never wrote options, only bought, which meant I always confronted my maximum exposure upfront. I spent most of the year doing that. Almost 6 months in, I was down around $900 which managed to make back and break-even within a couple of weeks after.
At that point, I took stock of what had happened so far - a few things dawned upon me:
1. I'd spent thousands in brokerage fees on that trip to Drawdown Valley and back to the surface.
2. Options in Australia are not very liquid, and hence the bid/ask spreads tend to be wide.
3. The combination of fees and wide spreads made it a rather expensive learning experience.
Early 2013, I discovered CFDs through one of the popular online CFD brokers that had an Australian presence. Opened an account with a couple hundred bucks on a credit card - no sweat. "No Commissions" was a dream come through for me. I thought "now I can trade like the big boys, in and out, long and short all day". I never made a profit, just a long drawn-out decline to $4.95 in the account. So I made a pact with myself - trade a demo account, recover the $300 and another $700 on top of that, and I'll start over with a $1000 account.
Never happened. Last I traded a CFD, which was less than a month ago, I was focused on two currency pairs - AUDUSD and USDJPY. The AUDUSD because I was in Australia, USDJPY because it seemed interesting.
Along the way, a few lessons I learned:
1. CFD brokers make money from the spread, and it is a significant spread.
2. I wasn't actually trading on the "open market", rather just against the broker.
3. Trading with the real $300 at the start made pain of loss and the euphoria of profit very real - feelings that I was later able to transfer on to when I traded demo.
4. Taken seriously and for real, trading demo/sim and is unbeatable value as far as cost per learning experience goes.
Supplimenting my trading experience was a steady diet of somewhat relevant literature like "Antifragile" by Nassim Taleb, Alexander Elder's "Come Into My Trading Room", "Misbehavior of Markets" by Mandelbrot, a couple of Turtle Trader books, One Good Trade by Mike Bellafiore, a blur of other stuff around indicators and patterns. Babypips.com was a huge resource where I learned a lot too.
Which brings us to today. I'm about a month into my discovery of futures, I stumbled upon futures.io (formerly BMT) less than a week ago, I'm about 3/4 way through Mark Douglas' "The Disciplined Trader". While I'm still a long way off my goal of consistantly profitable trading, I feel like I'm closer than ever.
So far, I've been play-trading on a demo futures account - no plan, no strategy, just single contract GC trades, and going on "feel" (fail) and "intuition" (double fail), noticing patterns, taking punts etc. I want to take it to the next level, so I'm going to try and journal my trades, and hopefully accelerate my learning.
Here's my plan, feel free to question me or give suggestions.
No particularly strong reason. If anyone has a suggestion on a good "beginner" instrument to learn to trade that can offer a good learning experiences, I'm all ears.
Approach: Technical + Price Action (are they the same?)
I think I'm more comfortable thinking, learning and reasoning in those terms.
Timeframe: 5min, 30min, 60min charts
Because it's generally a good idea to trade with context in mind?
Tools: I'd like to learn to trade with naked candlestick charts, key S/R levels and the DOM.
Like I said, this journal thing is me taking a next step in learning. I welcome all comments, advice and suggestions.
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Spotted an ascending triangle forming with resistance @1349.5 and sporting higher lows.
I think I remembered the pattern wrongly, expecting a breakout upwards when it's meant to be a breakout DOWNWARDS.
I placed a buy stop 1 tick beyond the resistance level at @1349.6 with no stoploss. Left terminal for a bit. When I came back, pattern had "failed" according to my inaccurate understanding. It actually came about and I would have made a profit if I'd got it right.
Exited on pattern "failure" @1348.9 for a 6 tick loss.
Lesson: Must get the patterns right and double check before putting on a trade.
Idea for next trade, when ascending triangle emerges, place short stop beyond resistance with a tight stop for good profit when breakout occurs.