Frustration Bottling Up
May 2, 2006 by Trader Rich
I'll admit that the frustration of losing is bottling up. I did manage to end the losing streak by getting a couple of smaller pip wins today after my 30 pips loss. I ended the day -15 pips. I sent a message to Rob this afternoon stating my frustration and he had 2 suggestions for me:
- Stop trading the EURO! He thinks the currency pair is a "turd" and that it hardly moves. He told me to stick to the GBP which has been moving big time over the last 2 weeks.
- Decrease my lot size on a day with no economic news whatsoever. I only traded 1 lot, followed my rules, and only lost 30 pips so it ain't so bad
I sent a follow-up question asking him what pairs he likes to trade most.
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Hey Rich,
I am sharing your frustration, on Monday I lost another bunch of trades after the EUR dropped, so much for the bank forcasts. I got up from the computer and went to the driving range to clear my mind, my reasoning went as such…
1. The stratergy of 1 hour charts + EMA + “Trend is your friend” simply does not work because I keep on losing.
2. Why am I losing? because I keep getting stopped out
3. Why am I getting stopped out? because even though long term trends may play out over time, fact is nobody has a clue about what will transpire over any given day
4. So increase the stop loss range? this means I would be trading so small it would be hardly worth it
Ok then, what to do….I went home and set the chart to 5 minute intervals with some EMA’s + Stocastic on EUR/USD only and simply traded what I saw in front of me. I made 30 pips, this is the best result I have had in months. This approach has a number of positives.
1. No trying to work out where stop losses go, if the prices moves againest you by a couple of pips, then bail
2. Because of 1, you can trade larger as your stop margin is much smaller
3. Lose one, big deal! another opening will present soon, no waiting for hours only to see all your careful analysis and stop losses turn to s**t
Maybe this is my style and I just didn’t know it, just by watching the charts I have learnt that nothing happens for most of the day, then London opens and all hell breaks lose. So I will try this approach and let you know how it goes. I live in NZ so London open is just after dinner. This line of thinking was inspired by reading the trade logs of the FXCM contest winners.
BTW I don’t get how GDB moves more than the EUR, can you explain?
Hey Rich,
Here’s something I do, to relieve the frustration of winning and losing.
The first thing I did was to create a worksheet to track my trades. This worksheet contains the obvious things like time, date, reason for trade etc…. I’ve created aditional columns to include all the aspect of my trading system. I also include the largest drawdown and the peak profit of the trade. After I make the trade I’ll mark yes/no in the columns to confirm all the requirements were met for a valid trade. Then I basically just changed the way I view the trade. I don’t view it as winning or losing, but rather I’m “checking” to to make sure I’m following the strategy, and validating the requirements. It might sound a little off the wall, but everytime I enter a trade I’m not entering to win or lose, but I’ve convinced myself that I’m entering it to validate my system(s) and they’re requirements. This way a winning trade is just validating the method, and a losing trade is not a loss, but it’s a tool to help me fine tune my system(s).
Forex2stay, It sounds like your way keeps everything much more positive which is good. I keep saying lose, lose, lose and that’s what I feel like, a big loser. I also have to do much more to track my trades. Once I start losing, I stop tracking closely which is when I should be tracking it even more closely to learn from the mistake. Either way, thanks for the advice.