I Learned a Huge Lesson Today

[Sang Froid]

This is probably more for my benefit than for others, writing things down can clear the mind, but if someone can learn anything from this then at least it's not all in vain.

Over the last six weeks I've been consistently profitable for the first time in my trading history on a live account. In the last four weeks I've made 20% and as my account balance rose so did my confidence. Over the past three years or so I've never really been in this position and as of yet hadn't come across of the emotional side of winning!

Well that nearly came to an end today.

I will honestly admit I became cocky, too cocksure for my own good. I thought to myself that I had cracked trading and I was on the road to riches. I was swiftly brought back down to earth with a bump.

Trading is a "funny old game" and I've found out that you're competeing against yourself more than anything. I've got a strategy that I've been using during this rosey period. It generally gives about four signals a week.

During this time I've had discipline to only follow my strategy, if no signals are there then fine, always tomorrow. I've had patience. Even in losses it didn't affect me because there was always tomorrow and I had faith in the strategy I had written.

All until today. No signals all week. "This is rubbish" I thought to myself, the markets are killing it at the minute. So I tried to force my strategy into giving a signal that wasn't there. Tried tinkering around with it. Instead of waiting for the setup I tried to adjust it so it would GIVE ME a signal to enter.

All my discipline had gone out the window. I entered two positions and lost on them both... and rightly so. I needed to trade, no trades all week so I pushed it. Then I did the WORST thing you can do, and something I thought I'd learned from. I revenge traded. No signal, no nothing I just went long on the Aussie a complete punt and double my lot size. LUCKILY .. LUCKILY it worked out and I recouped the losses from this morning. LUCKILY.

Any newbies reading this..... if you have a system or a strategy, follow it. Keep your discipline, if it's a slow week then it's a slow week. At least you haven't lost anything, and there's always tomorrow. I'm telling myself this more than anyone else to be honest. I've heard and read this so many times myself, until you actually do it and make the mistake yourself you'll never know.

 

[bedsit]

Any newbies reading this..... if you have a system or a strategy, follow it. Keep your discipline, if it's a slow week then it's a slow week. At least you haven't lost anything, and there's always tomorrow. I'm telling myself this more than anyone else to be honest. I've heard and read this so many times myself, until you actually do it and make the mistake yourself you'll never know.

Funny thing – I heard about it so many times and of course ignored it till I got badly hit.
I guess that's the only way – to experience it and if you still have some money left it's a good lesson that shouldn't be forgotten as long as you trade.

 

[shadowninja]

Nice going.

When you've truly had enough of buggering about, you'll stop chasing the market, stop revenge trading and stop trading when you have no reason to be in the market. Until then, the account will go up and down like a school girl on prom night.

 

[Black Swan]

trading is birth by a thousand cuts...

 

[Sang Froid]

Nice going.

When you've truly had enough of buggering about, you'll stop chasing the market, stop revenge trading and stop trading when you have no reason to be in the market. Until then, the account will go up and down like a school girl on prom night.

All things I had thought I had mastered. I still have no idea how this happened today.

Maybe... like a recovering alcoholic I fell off the wagon.

I suppose every now and again you need a kick up the ass to remind you of the harsh nature of trading. It's a cruel world and the market is emotionless, it doesn't care if it eats all your money and spits out the bones. I become too involved emotionally today, and as you said chased the market because it 'owed' me something.

Lucky escape today, roll on Monday

 

[Prawnsandwich]

All things I had thought I had mastered. I still have no idea how this happened today.

Maybe... like a recovering alcoholic I fell off the wagon.

I suppose every now and again you need a kick up the ass to remind you of the harsh nature of trading. It's a cruel world and the market is emotionless, it doesn't care if it eats all your money and spits out the bones. I become too involved emotionally today, and as you said chased the market because it 'owed' me something.

Lucky escape today, roll on Monday

Getting a good ass kicking - Thats exactly what the market does when you get over confident, increase trade size / risk, and start taking poor quality set ups.....it takes a few kickings before you contain this particular demon...in my case it did anyway

 

[Sang Froid]

Getting a good ass kicking - Thats exactly what the market does when you get over confident, increase trade size / risk, and start taking poor quality set ups.....it takes a few kickings before you contain this particular demon...in my case it did anyway

Summed my day up in six words; "Over confident...taking poor quality setups."

 

[gbdru2]

oh how I know the feeling...

my 2 biggest losses (which run into 4 figures) both through those exact words

Over confident...taking poor quality setups."

 

[shadowninja]

In a way, you're unlucky because you didn't lose money. You haven't really learnt your lesson if you see what I mean. Sometimes, we need to take the MOAL (Mother of all Losses) to keep us on the straight and narrow. It's like a fine for speeding. You'll be more cautious in future.

 

[DionysusToast]

Aaaaah.... the revenge trade...

Only to be outdone by the boredome trade... or the alchohol trade... or perhaps the charlie trade...

Have we missed any ? Any of our members with small SB accounts done any glue sniffing trades perhaps ? Butane ? Paint thinner ? Meths ?

 

[bedsit]

It's like a fine for speeding. You'll be more cautious in future.

So far as you stick to fines, it's OK (up to 12 points).

Good to avoid a serious crash (injuries, write off etc.)

 

[Sang Froid]

In a way, you're unlucky because you didn't lose money. You haven't really learnt your lesson if you see what I mean. Sometimes, we need to take the MOAL (Mother of all Losses) to keep us on the straight and narrow. It's like a fine for speeding. You'll be more cautious in future.

Been there done that.... three times, once lost my WHOLE account in four days, fair enough it was only a grand but still.

That's why yesterday hurt even more, I didn't lose money and was lucky. BUT... I should have learned these lessons from now. Makes me think if anything has in fact changed or am I still going down that same path?

Only time will tell.

 

[mb325]

Over the last six weeks I've been consistently profitable for the first time in my trading history on a live account. In the last four weeks I've made 20% and as my account balance rose so did my confidence.

I will honestly admit I became cocky, too cocksure for my own good. I thought to myself that I had cracked trading and I was on the road to riches. I was swiftly brought back down to earth with a bump.

Trading is a "funny old game" and I've found out that you're competeing against yourself more than anything. I've got a strategy that I've been using during this rosey period. It generally gives about four signals a week.

All until today. No signals all week. "This is rubbish" I thought to myself, the markets are killing it at the minute. So I tried to force my strategy into giving a signal that wasn't there. Tried tinkering around with it. Instead of waiting for the setup I tried to adjust it so it would GIVE ME a signal to enter.

All my discipline had gone out the window. I entered two positions and lost on them both... and rightly so. Then I did the WORST thing you can do, and something I thought I'd learned from. I revenge traded. No signal, no nothing I just went long on the Aussie a complete punt and double my lot size. LUCKILY .. LUCKILY it worked out and I recouped the losses from this morning. LUCKILY.

Print this out. Print out charts of your stupid trades. Read them before you trade every day.

 

[0007]

You don't really believe it until you've been there!

 

[bedsit]

I was just reminded by the market about boredom trades.

They come close to revenge trades, only they somehow deplete the account in a casual way.

 

[kwickwool]

Yea, can be chewed up and spat out by this game in a very short period. It is the game for the very best and only the very best survive. The hardest way to make a very easy living.

 

[montmorencyt2w]

Had one MOAFLs this year, and a few others I would definitely have preferred not to have. Most of it was the house's money, but that's small consolation.


The curious thing is, I got to a point where I knew it was going to happen, and I couldn't stop it, and I was kind of ready for it and unemotional about it. A bit numb afterwards, but there was no pulse racing, etc.

And it's been the same on subsequent losses.

I still want to avoid unnecessary losses of course, but it means at least I can take small losses in my stride and have no problem about taking them in order to avoid larger losses later. So I guess that's the most important lesson, although there were others.

 

[shadowninja]

So far as you stick to fines, it's OK (up to 12 points).

Good to avoid a serious crash (injuries, write off etc.)

If we compare it to fines, you have 12 points much like you have an account of size X. Once you've lost it, you're out of the game... but after a while the points get nullified, I understand and, similarly, you can earn your money back in the 9 to 5.

 

[meanreversion]

Sangfroid, it's funny how you say you haven't been getting any signals.. I traded on Friday, was the first trade in nearly two weeks. Maybe we're trading a similar system

 

[Sang Froid]

Sangfroid, it's funny how you say you haven't been getting any signals.. I traded on Friday, was the first trade in nearly two weeks. Maybe we're trading a similar system

Interesting you should say that Mean,

I actually only had two 'real' signals all week which came on Friday, one on Cable the other on Euro, however oweing to the week I had I didn't take them.