Quick Ramblings

Haven't been blogging much because for some reason I rather spend my time trading or focusing on trading material. Just want to jot down a few quick ramblings before I lose the blogging mood again :P

1. There are really all sorts of traders out there. Seriously I see many kinds of persona in forums, facebook groups etc, and like in every arena of life, one has to be very careful who he trusts and pays attention to. Some people are gifted with the glib of tongue, they're able to portray themselves as some trading guru, going around giving trading advice and correcting others. These people often only posts their winning trades after the fact. Mind you there is a huge amount of such people out there, some do so because they're course providers or provide some form of trading service, others do so because they enjoy the glory and fawning other traders bestow upon them. You'll often hear them say things like "That trade was so obvious, how could anyone not see it?", or "I knew it wouldn't work out, didn't I tell you so?", or "Sigh I only made 20% this week, could have been much better"....  I guess I'm kinda annoyed because I've wasted precious time trying to make sense or understand why the trades of these people work, when many times I don't even think they were good trades. I soon realized that I was right, many of these trades are lousy ones to begin with, they only worked because bad trades sometimes do end up in profit too. Such trades are many aplenty on forums, and one has to be very careful who he studies. Seriously do not ever ever listen to someone who only posts trades after the fact. A trader could identify 20 zones on the M1 chart, take all of them on a demo account, and probably 1 of them will result in a 10R profit. Post that trade on the forum and naive readers will flock to him and worship him. I thought a lot about it and this is my conclusion - I'll only render respect to the trader who is willing to post his trades the moment he takes them and not after the fact. Even so I'll only render respect to him if he is humble, generous, and willing to share and help others."The older I get the less I listen to what people say and the more I look at what they do." - Andrew Carnegie


2. Keeping to our trading rules is harder that I thought. I have no problem cutting losses when I should, but my biggest problem is taking profits prematurely. It has been my problem for months, and ironically still is. However, as I witnessed the destructive effects of this time after time, the significance of it is beginning to sink in. I have a dream, this dream sounds ludicrous at first but when you break it down, you'll realize that it is not impossible. This dream is to take a 10k account and grow it to a million dollars within 18 months. I did the math, in order to do so, one has to grow his account by 30% every month. Compound the profits monthly and a 10k account will grow into a million within 18 months. That will mean I have to make 7.5% every week, 1.5% daily. Now is 1.5% daily hard? I would say yes, but not impossible. I risk 2% every trade, that means I have to make 0.75R daily. To find out if that is possible, simply trade and prove it to yourself. I was analyzing my trades for last week and here is the shocking discovery. If I had stuck to the trading rules I had set for myself, I would not only have met my weekly target, I would more than doubled it. I'll post a trade to illustrate why.

   

   GBPCAD H1

   This trade could have been 9R (18%) if I had managed it according to my trading rules - trail stop above each supply zone. There is nothing magical about it, I simply took a short at a well defined supply zone. The problem is this - I was watching it on the M1 chart, and the trade put me in the green and back to the red about 3 times. It is very frustrating when you see a sharp breakdown and your mind goes "Yes this is it!", and the next moment prices retrace all the way back up and puts you back in the red. Fear sinks in, you wonder whether it was a fake out, whether you should just get out to be safe. Repeat that 3 times and the mind/emotions is totally drained. In the end I told myself screw it I'm just going to get out around breakeven, anyway I'm going to sleep and can't monitor the trade anymore. Can you imagine how disgusted I felt when price sunk the way it did the next day? This trade imprinted something deep in me. I realized that it is possible to make a million in 18 months, but I MUST stick to my rules. Did I expect such a runner? Nope. Does it always happen? Nope. But the key is this - The way to catch a runner is to stick to the rules. The tricky thing is this - Trailing a stop means you'll never get out at the exact top/bottom. You'll ALWAYS lose out on some profits. Also, perhaps 7 out of 10 times you'll not get a runner. It can be frustrating to keep getting stopped out at BE or a small profit. However, one must bear in mind that once the runner comes, it can make the week or maybe even the month. And the above is only one trade. There are a couple others that I also broke my rules and exited prematurely. As such, until proven otherwise, I'm going to believe that my dream is possible. Of course to achieve 30% monthly consistently is easier said than done, at some point the psychological stress of seeing the P/L fluctuate by the thousands will kick in. But I'll deal with that when it comes, right now I just want to focus on getting my strategy and discipline right.