I have been thinking about trading and athletes. The best in both fields have trained themselves to the highest standards… with athletes, this obviously means regularly training intervals and lots of lots of repetition through working their bodies through motions to help their mind and body connect.

Trading is the same.. you need to have experienced and trained yourself. I mention training oneself since I am a self taught trader, I am not an institutional trader.

This means that when I’m competing (in competing, I mean trading).. I need to ensure that to end up as a winner I need to be completely focused, trained and ready for the experience. If you take the 100 metre sprint..  that could be the equivalent of a trading session. You watch these athletes and they are physically in tip top condition.. their psychology allows them to visualise themselves winning.. it’s about setting a goal.

I write this today as I am trading today.. I am committing myself to a day every couple of weeks to trading. I want to experience the feeling of being trader, to see if I can do it.. to see if I can deal with sitting here on my own looking at the markets and making money from it.

Today, I’ve not started that well.. my mind is on other things. You know what it’s like.. if someone tells you that your next shot at a round of golf is going to determine whether you win or lose..  that added pressure doesn’t help you… you invariably end up screwing up.

Yes, so today I had two trades open in the market.. a short on both the EURUSD and the GBPUSD. I shorted the EURUSD but as it went up, I closed it for a 3 pip win. I then entered another short at a few prices worse than the previous one and then got out when I couldn’t deal with more than a 25 pip loss so I took it. The markets have since reversed and I would be in a 10 pip and counting win so far.

The GBPUSD was a good entry… however, I took profit way too early and have left a 30 pip profit on the table.

So my psychology wasn’t good today.. even though I ended up in positive (it was only +2 when it could be +60 and still counting)

(click to enlarge)

Tags: eurusd, gbpusd, trading psychology

Sorry I haven’t been updating the blog for a while but everything has been really hectic! I am getting married very soon and have a lot of wedding preparations. In addition, work has taken over the rest of my waking time. I was doing extremely well trading the Forex markets and then, a glut… my trades were rubbish and I was losing money. From a 11 trade winning streak to a good run of losses… what was going on?

I search high and low for an answer, I look at myself to see what was going on. I even managed to talk to a guy who was trying to sell me a trading course but I think I have got enough out of him to find the answer….

I want to start at the beginning with the evolution of how one becomes a trader….

It all starts when you read about the amount of money you can make…. you then read a few books, understand a few terms and how to read a chart and usually, off you go. You maybe lucky to start off with and make a few bob but in time, you will lose. You will find that you get angry and frustrated which then furthers you to read more books and/or even go to seminars. You will try some new things which you have learnt from these books/seminars and find that these also don’t work…  you go on more and more and you start to build quite an amount of knowledge to be able to speak the lingo and understand most of the terms which are presented. However, success as a trader still eludes you. You keep trying through more education and more seminars, more testing and doing anything you can to succeed….

Most people after losing a sizeable amount of money or finding themselves getting frustrated stop at this point. It’s an endeavour which they close their doors to…

I’m at the stage where I have seen some short term success…. and then to lose it. The thing is, trading isn’t what you expect it to be. It’s not a road to quick riches.. to be successful, you need to gradually build your stake and trade larger and larger sizes as you become more successful. Trading is a very personal endeavour too… it can be lonely and quite frankly, boring! However, the financial rewards can be huge!!

What I have learnt is that it is about discipline, it is about pulling the trigger when the time is right and it’s about sticking to a system which gives you a positive expectancy. The system you use will not be foolproof however, you will not get a 100% winning system… that is what most people find hard to cope with. A trading system that works can lose you money even if you follow it and make you money when you don’t. It is your discipline to follow through which makes trading work… you cannot be emotional about your trades… you just pull the trigger and wait to see what happens.

There are a lot of systems out there which do work.. however, where it fails is usually with the trader. The trader is unable to pull the trigger or tries to refine the system. It gets to a point, as a result of the refinements, that the system is no longer the system you started with but something completely different and non profitable.

Also, there is the tendancy to think that trading is a highly complex endeavour and people will design these systems with elaborate and over complex indicators.

Find a simple system and follow it…… after many years of pursuing trading, I think I’m finally coming to the answer and it’s been within my reach all along. It’s about believing yourself and being disciplined enough to follow through a trading system. You need to find one which suits your personality… Trading is about finding yourself and learning what works with you and what doesn’t…. it’s a journey that can lead to a lot of frustration yet joy!

Tags: define successful trader, making it as a trader, successful trader, trader, trader qualities, Trading, trading psychology

The chart shows what happened after I closed. The price action looped ripe for another entry short to ride the market lower but I felt anxious….

I am just not sure what it is but my instinct tells me to be careful… I attribute it to a couple of things, all trading psychology related:

• The possibility of losing my 47 pips that I have already made.. it’s always nice to finish the week a winner!
• The re-entry looks too obvious a trade… a bear trap perhaps?

Maybe I am thinking too much but once needs to feel comfortable. If the market goes down more I need to be composed, opportunities present themselves all the time.. I am not forced to enter.

We’ll see.. I’ll post another chart later to see what happened…

Tags: bear trap, daytrade, gbpjpy, trading psychology, trading thoughts