Hello All
I remember when I moved to another town, my flatmate (and a good friend) took me by car to local jobcentre and left me there. he asked me if I will find a way back home, and I said yes. It was new place to me, new situation, and I was starting my life from the beginning.
So after sorting my business at local jobcentre I went out heading home (I was living in this town for 3 days and I went to town just once before). So I was going, and going, seeking for proper way back, some places seemed to be familiar (hey, I've been here yesterday) and finally I found a main street I was living of (a small street going of the main one). I knew I was less than 1 mile away from my home, but went the opossite way. hey, I've never been here, it doesn't look familiar. So I went to tourist information (at the same main street). I sat in the park with a town map, found the name of the street I live on (just a small street off the main one), and I realised I was going wrong direction. I was so close and so far. It was about 6 years ago, now I feel exactly the same with my trading. I feel so close to being constantly profitable, and nowhere close at the same time. I've read quite a few books about trading (list here: http://www.forexfactory.com/showthread.php?t=367514). I know exactly how to manage risk, how to set trades with proper mm, and I can give advice about it for others. somehow I can't stick to it myself. it's my mentality - it affects my trading. it is last piece of puzzle.
It won't be a strict journal, so please leave it in here. I want to share my experience with people with similar problems, help some newbies, help myself.
So what are the main mentality problems?
greed - it is this feeling when you want to get rich fast. many newbies who try forex have beginners luck. they gain 20-50% of profit in just 3 trades and they think: woooow - I must be really good. without testing the system for long enough time they go it with real cash, and suddenly they realise they are crap - I was like that (and sometimes I still am) – In my first 2 weeks of trading real account I made about 700-800% profit. Where are the money now? I'm not sure, but 1 thing I know – I don't have them. So if you think you will get rich within few months – forget it and I really mean FORGET IT.
revenge – you just lost 10% of your account – how come? You HAVE TO get it back, NOW!. So you go for another trade, with all your account balance, and you lose 20% more – WTF??!! this time I will get it back, I have to, I know how to trade...... how do you feel now, when you lost within minutes 90% of your account balance? Disappointed, sad, all your dreams about easy life are buried, within minutes. You can't win with market, market always knows best when to go. You lost the trade? Stand up, do some press ups, go for a walk, go for a coffee, switch the computer off, there will be another day tomorrow
I know better than the market – it is a behaviour where trader is trying to give market order, where trader says: IT HAS TO GO NORTH and bet's so. Market and only market decides where to go (plus few powerful people)
I'll show them – typical revenge/show off trading where trader tries to get good performance to impress others by performance itself (I will get 20% profit today to show them all that I can) or by gaining financial independence (my boss will see my middle finger when I'll quit) – remember that you trade only for yourself, you don't need to impress people who don't like you, you don't need to impress people met in internet, you do it for YOURSELF
I am not sure what to do – if you're not sure what to do, don;t trade. You need to know what to do and just do it (like nike), if you don;t know how to trade, why trading? If you can't drive a car get a bus
I missed so good opportunity to earn – so what???!!!! you miss life changing opportunities every day without even knowing it. You miss opportunities for a better job, to meet a love of your life, opportunities for profitable business. It happens every day that you miss opportunities, and you don't even know it. Chart shows you that you missed opportunity to gain 200pips – so? You missed it this time, next time you may have more luck – keep trying don't give up. None of us has crystal ball to predict future – live with it.
Round numbers - behaviour that tells you to go to round numbers, for example quite often I wanted (sometimes still want) to achieve a round percent profit. let's say I did 6,7% daily profit - in this situation something pushes me to get to 7% (round number) - why? it is so silly, as the final score should matter, not the daily one
Just this one time - it may be a good think or bad one - depends on circumstances. Let's say I got 5% profit today - seems good, but I want some more, if the greed won;t kick in and you'll do the trade according to all rules - all is fine. but If suddenly greed will kick in and you, ll put too much on risk - this may lead you to loss, sometimes big loss, especially when few of above will take part - like greed+revenge+I'll show them all. you may loose a lot
It is market's fault – loosing is never market's fault – it is YOUR FAULT! ALWAYS! You and only you are responsible for your losses. You lack knowledge, you lack patience, you're not calm. Stop blaming others – your fate is in your hands
I know how to trade - at the moment I did 27 trades and got almost 20% profit in 3 days - If I were a noob I'd say - I know what I do, I am great trader - REALLY? NO SHIT MATE! - this behaviour has wiped quite a few of my accounts - both real and demo. you can't judge (at least not for daily systems/methods) the reliability of the method by so few trades. I think in this case 300 trades will prove if the system/method and ME can bring profits
Trading without stop loss - this one is a proper killer, it's like driving home without stopping on red lights, you'll get there much faster, but you may cause fatal accident - and it will happen sooner or later. It is very bad and I still do it sometimes. A lot of newbies do it for different reasons - lack of knowledge, lack of risk management skills, lack of brain. some of them say they will stop manually - they won't as they'll keep hoping the trade will go as they order. besides market is hard to predict and may surprise you, for example few days ago EUR/JPY went down about 200 pips within just a few minutes - surprise, surprise, I wonder how many newbies have wiped their account. Being on a loss makes you nervous, you keep staring at the chart and pray for the win, kicks head quite hard
IT IS A MUST to use wise s/l with risk not exceeding 3% (of course different methods/systems may require different risk, but can you afford to loose more?)
Don't listen to forex factory "market wizzards" - a lot of people on forex factory "predict" next movement of the currency - don't listen to people of this kind. Most of the time they are talking bullshit, plus you have to bear in mind that even if they know what they are saying their information may be not useful to you at all as your trading style may be different from others. Clear your mind, don't listen to fortune tellers, do your own homework, read the chart and trade what you see
I did sort out most of above problems except greed and revenge – I lack patience, I keep trying but still lack it. The good thing is that I eliminate obstacles all the time, every day I am closer, I am too close to turn around.
why do I trade? It is not my target to be rich. All I want is mortgage free house, small car, some savings, and retirement fund, secure my son's future, help my close family and retirement fund for my parents. As you see I don't want a lot but still seems like I need 2-3mln$ LOL
My trading rules?
I trade with choros/dance system
- I trade only on days when I am off work (I have 1-4 days to trade each week, what gives me 100-120 trading days a year). I can access my fx account from work, but it affects me. I loose this way
- 1% of risk every trade, 2-3% (I set 2 or 3 same trades with same tp and sl) if I see better opportunity
- 3% daily profit as daily target, and then I take a rest
- few hundred trades on demo account to check my performance (it will take me about 3 months) – If I'll be profitable I'll go for it with real cash – I lost too much to risk more.
I hope I will get there in about 3 years if I won't screw this time ;-)
I remember when I moved to another town, my flatmate (and a good friend) took me by car to local jobcentre and left me there. he asked me if I will find a way back home, and I said yes. It was new place to me, new situation, and I was starting my life from the beginning.
So after sorting my business at local jobcentre I went out heading home (I was living in this town for 3 days and I went to town just once before). So I was going, and going, seeking for proper way back, some places seemed to be familiar (hey, I've been here yesterday) and finally I found a main street I was living of (a small street going of the main one). I knew I was less than 1 mile away from my home, but went the opossite way. hey, I've never been here, it doesn't look familiar. So I went to tourist information (at the same main street). I sat in the park with a town map, found the name of the street I live on (just a small street off the main one), and I realised I was going wrong direction. I was so close and so far. It was about 6 years ago, now I feel exactly the same with my trading. I feel so close to being constantly profitable, and nowhere close at the same time. I've read quite a few books about trading (list here: http://www.forexfactory.com/showthread.php?t=367514). I know exactly how to manage risk, how to set trades with proper mm, and I can give advice about it for others. somehow I can't stick to it myself. it's my mentality - it affects my trading. it is last piece of puzzle.
It won't be a strict journal, so please leave it in here. I want to share my experience with people with similar problems, help some newbies, help myself.
So what are the main mentality problems?
greed - it is this feeling when you want to get rich fast. many newbies who try forex have beginners luck. they gain 20-50% of profit in just 3 trades and they think: woooow - I must be really good. without testing the system for long enough time they go it with real cash, and suddenly they realise they are crap - I was like that (and sometimes I still am) – In my first 2 weeks of trading real account I made about 700-800% profit. Where are the money now? I'm not sure, but 1 thing I know – I don't have them. So if you think you will get rich within few months – forget it and I really mean FORGET IT.
revenge – you just lost 10% of your account – how come? You HAVE TO get it back, NOW!. So you go for another trade, with all your account balance, and you lose 20% more – WTF??!! this time I will get it back, I have to, I know how to trade...... how do you feel now, when you lost within minutes 90% of your account balance? Disappointed, sad, all your dreams about easy life are buried, within minutes. You can't win with market, market always knows best when to go. You lost the trade? Stand up, do some press ups, go for a walk, go for a coffee, switch the computer off, there will be another day tomorrow
I know better than the market – it is a behaviour where trader is trying to give market order, where trader says: IT HAS TO GO NORTH and bet's so. Market and only market decides where to go (plus few powerful people)
I'll show them – typical revenge/show off trading where trader tries to get good performance to impress others by performance itself (I will get 20% profit today to show them all that I can) or by gaining financial independence (my boss will see my middle finger when I'll quit) – remember that you trade only for yourself, you don't need to impress people who don't like you, you don't need to impress people met in internet, you do it for YOURSELF
I am not sure what to do – if you're not sure what to do, don;t trade. You need to know what to do and just do it (like nike), if you don;t know how to trade, why trading? If you can't drive a car get a bus
I missed so good opportunity to earn – so what???!!!! you miss life changing opportunities every day without even knowing it. You miss opportunities for a better job, to meet a love of your life, opportunities for profitable business. It happens every day that you miss opportunities, and you don't even know it. Chart shows you that you missed opportunity to gain 200pips – so? You missed it this time, next time you may have more luck – keep trying don't give up. None of us has crystal ball to predict future – live with it.
Round numbers - behaviour that tells you to go to round numbers, for example quite often I wanted (sometimes still want) to achieve a round percent profit. let's say I did 6,7% daily profit - in this situation something pushes me to get to 7% (round number) - why? it is so silly, as the final score should matter, not the daily one
Just this one time - it may be a good think or bad one - depends on circumstances. Let's say I got 5% profit today - seems good, but I want some more, if the greed won;t kick in and you'll do the trade according to all rules - all is fine. but If suddenly greed will kick in and you, ll put too much on risk - this may lead you to loss, sometimes big loss, especially when few of above will take part - like greed+revenge+I'll show them all. you may loose a lot
It is market's fault – loosing is never market's fault – it is YOUR FAULT! ALWAYS! You and only you are responsible for your losses. You lack knowledge, you lack patience, you're not calm. Stop blaming others – your fate is in your hands
I know how to trade - at the moment I did 27 trades and got almost 20% profit in 3 days - If I were a noob I'd say - I know what I do, I am great trader - REALLY? NO SHIT MATE! - this behaviour has wiped quite a few of my accounts - both real and demo. you can't judge (at least not for daily systems/methods) the reliability of the method by so few trades. I think in this case 300 trades will prove if the system/method and ME can bring profits
Trading without stop loss - this one is a proper killer, it's like driving home without stopping on red lights, you'll get there much faster, but you may cause fatal accident - and it will happen sooner or later. It is very bad and I still do it sometimes. A lot of newbies do it for different reasons - lack of knowledge, lack of risk management skills, lack of brain. some of them say they will stop manually - they won't as they'll keep hoping the trade will go as they order. besides market is hard to predict and may surprise you, for example few days ago EUR/JPY went down about 200 pips within just a few minutes - surprise, surprise, I wonder how many newbies have wiped their account. Being on a loss makes you nervous, you keep staring at the chart and pray for the win, kicks head quite hard
IT IS A MUST to use wise s/l with risk not exceeding 3% (of course different methods/systems may require different risk, but can you afford to loose more?)
Don't listen to forex factory "market wizzards" - a lot of people on forex factory "predict" next movement of the currency - don't listen to people of this kind. Most of the time they are talking bullshit, plus you have to bear in mind that even if they know what they are saying their information may be not useful to you at all as your trading style may be different from others. Clear your mind, don't listen to fortune tellers, do your own homework, read the chart and trade what you see
I did sort out most of above problems except greed and revenge – I lack patience, I keep trying but still lack it. The good thing is that I eliminate obstacles all the time, every day I am closer, I am too close to turn around.
why do I trade? It is not my target to be rich. All I want is mortgage free house, small car, some savings, and retirement fund, secure my son's future, help my close family and retirement fund for my parents. As you see I don't want a lot but still seems like I need 2-3mln$ LOL
My trading rules?
I trade with choros/dance system
- I trade only on days when I am off work (I have 1-4 days to trade each week, what gives me 100-120 trading days a year). I can access my fx account from work, but it affects me. I loose this way
- 1% of risk every trade, 2-3% (I set 2 or 3 same trades with same tp and sl) if I see better opportunity
- 3% daily profit as daily target, and then I take a rest
- few hundred trades on demo account to check my performance (it will take me about 3 months) – If I'll be profitable I'll go for it with real cash – I lost too much to risk more.
I hope I will get there in about 3 years if I won't screw this time ;-)
On my way to financial independence - if others can do it - I can do it