It’s difficult to me… really difficult at this time of my life dedicate entirely to market analysis. I’m not giving up... never.
I’m still reviewing my procedures and this log is going to help, or at least it will keep what the hell I was thinking at the time to open a position.
Some considerations that I’m now willing to follow:
- Stay away from 5min chart or less. I tried before and didn’t work, why to try again? Even trade in tick charts and positions went awfully wrong. Like chasing rabbits with blind eyes. Stay Away!
- Analyze the bigger timeframe first, and then at least three timeframes over the trigger timeframe. Get the bigger picture before enter with the trend, not against it.
- Maybe consider as trigger timeframe 15min chart but analyze 1H, 4H and daily charts before.
- Return to demo account till be consistently profitable.
Things that I’m aware of, and have to work in:
- Still don’t have a rigid strategy; I have a general idea about technical analysis but I’m not certain in my procedures
- Technical indicators are history price tools, but the most direct and realistic indicator is price. Support/Resistance and pattern are extremely strong tools. Use them.
- Lack of a valid entry strategy.
- Trend is my best friend and I don’t want, need or be able to fight with it.
So this is it. Every single trade I make is going to pass through this blog.
Monday, March 30, 2009
The importance of a log
Ups and downs, market is mopping the floor with my face. Is like chasing rabbits with closed eyes. When I opened a position, the market goes exactly in the opposite way and hit my stop. So you probably have read this before…
Other things that I’ve read or maybe thought… the broker is playing me bad, or the market is crazy and more nonsense statements.
The absolute truth about the market is that it´s always right, period.
Another thing that I’ve learnt is that probably all new traders (including myself) are right almost every time, but at the wrong moment.
So it’s time to another step back and analysis. By now, this is the graph Balance vs Equity since my last deposit.
Not a good performance. That’s why I’ve started this blog. Because I didn’t keep a record of my trades, I didn’t learn anything from them.
Right now my last position closed with a lost of -17usd so my balance/equity is 1428.02usd since February 23rd.
Since then, I didn´t trade anymore till I feel that I´m ready, which it´s not soon.
Other things that I’ve read or maybe thought… the broker is playing me bad, or the market is crazy and more nonsense statements.
The absolute truth about the market is that it´s always right, period.
Another thing that I’ve learnt is that probably all new traders (including myself) are right almost every time, but at the wrong moment.
So it’s time to another step back and analysis. By now, this is the graph Balance vs Equity since my last deposit.
Not a good performance. That’s why I’ve started this blog. Because I didn’t keep a record of my trades, I didn’t learn anything from them.
Right now my last position closed with a lost of -17usd so my balance/equity is 1428.02usd since February 23rd.
Since then, I didn´t trade anymore till I feel that I´m ready, which it´s not soon.
Saturday, March 28, 2009
A review and a new start
What I can conclude about this entire journey in forex market… Definitely is not the end.
My biggest mistakes were:
- No trading plan
- No coherent strategy
- No money management
- No trading log
- No control over emotions
- No knowledge about markets
So I’m trying to do it right now. I’m trying to change and improve my methods. From books, I’ve learned a few strategies. But I’m not confident about those and trying to develop one on my own.
I made a last 2k deposit at the end of last year on December 31st. And this is it. With all of the things that I’ve learned, I supposed that this time I could do it right.
Guess what… Not so good news.
I opened two positions in December 31st and immediately were positive. I yell to the sky “I finally get it”, and then the market closed for holydays. I looked at the markets when reopened in January 2nd, and things go wrong… they hit my stop loss with a total of -150usd aprox. Not a good New Year start.
My biggest mistakes were:
- No trading plan
- No coherent strategy
- No money management
- No trading log
- No control over emotions
- No knowledge about markets
So I’m trying to do it right now. I’m trying to change and improve my methods. From books, I’ve learned a few strategies. But I’m not confident about those and trying to develop one on my own.
I made a last 2k deposit at the end of last year on December 31st. And this is it. With all of the things that I’ve learned, I supposed that this time I could do it right.
Guess what… Not so good news.
I opened two positions in December 31st and immediately were positive. I yell to the sky “I finally get it”, and then the market closed for holydays. I looked at the markets when reopened in January 2nd, and things go wrong… they hit my stop loss with a total of -150usd aprox. Not a good New Year start.
Friday, March 27, 2009
The big winner
From the picture of my last blog entry, you can see my balance vs equity since April to October 2008, which include all of my trades, deposits, my one withdraw, also price corrections from the broker (premium).
That’s why it seems to be 2750 operations, but really I have opened 700 positions.
I had 482 winners and 218 losers. That’s a 68.75% of winning rate but you know the awful truth.
It doesn’t matter how many winners or losers you have. Now I understand the oldest say: cut your losses soon and let winners run, or kind of.
So the big winner is… I know it, you know it… the broker!
Since the beginning of my trading career I’m down with 4300usd without consider cost of transfers.
That’s why it seems to be 2750 operations, but really I have opened 700 positions.
I had 482 winners and 218 losers. That’s a 68.75% of winning rate but you know the awful truth.
It doesn’t matter how many winners or losers you have. Now I understand the oldest say: cut your losses soon and let winners run, or kind of.
So the big winner is… I know it, you know it… the broker!
Since the beginning of my trading career I’m down with 4300usd without consider cost of transfers.
A standstill
My experiment was a train crash.
At that time, I needed to step back and analyze the situation. I said, this is not for me… or is it? What the hell happen? And more important… What to do now?
The wise thing that I can figure out is study. So, since that time to the present, I was studying books, web pages, forums, other blogs, essays, and anything that I could grab about technical analysis. I have determined to continue with my trading career. Since then, I study charts, think charts, eat charts and even dream on charts.
The next picture resumes my experiment. Balance vs Equity. From ashes to ashes.
At that time, I needed to step back and analyze the situation. I said, this is not for me… or is it? What the hell happen? And more important… What to do now?
The wise thing that I can figure out is study. So, since that time to the present, I was studying books, web pages, forums, other blogs, essays, and anything that I could grab about technical analysis. I have determined to continue with my trading career. Since then, I study charts, think charts, eat charts and even dream on charts.
The next picture resumes my experiment. Balance vs Equity. From ashes to ashes.
What Do you think that happen?
In that time, still without any knowledge about trading or technical analysis, I had 3000usd in my account due my last deposit. That was September 15th.
I’m risking too much, I thought, with my profit targets were too high and almost every trade I made went against me. I didn’t take big positions, just 5000 or 10000 per position (0.50 or 1usd per point). Things were worst when I risk too much in last attempts with overleveraged positions, but I thought… If I lower my profit limits and still use big positions, is a sure thing! I could make as much as I made with small positions in bigger profit targets.
What wrong I was… Now I realized
Still with no knowledge of trading, no stop limits and close targets things were worst. Now I know that this is called “scalping”. I used 100k positions.
Bad idea... Really a bad idea...
Without technical knowledge is like play Russian roulette. And the bullet was in the chamber. Too late I retake small positions but…
October 8th, the last remain position closed with a lost. My balance: 1.83usd
I’m risking too much, I thought, with my profit targets were too high and almost every trade I made went against me. I didn’t take big positions, just 5000 or 10000 per position (0.50 or 1usd per point). Things were worst when I risk too much in last attempts with overleveraged positions, but I thought… If I lower my profit limits and still use big positions, is a sure thing! I could make as much as I made with small positions in bigger profit targets.
What wrong I was… Now I realized
Still with no knowledge of trading, no stop limits and close targets things were worst. Now I know that this is called “scalping”. I used 100k positions.
Bad idea... Really a bad idea...
Without technical knowledge is like play Russian roulette. And the bullet was in the chamber. Too late I retake small positions but…
October 8th, the last remain position closed with a lost. My balance: 1.83usd
Thursday, March 26, 2009
Another try
This wasn’t too bad or was it? I deposited 300 and withdraw 2000. In my experiment I was up. But being a persistent person, I couldn’t let things that way.
On July 30th, I deposited 1000usd, but more or less a week later, on August 6th another downfall to 2.04 usd on my balance. Still up in my experiment because that deposit was from my first withdraw.
You possible can understand how I felt in my birthday con August 12th.
But I don’t give up. August 19th I deposit 2000usd. And guess what happened two weeks later… on September 1st my balance was 3.15usd.
Things started to hurt. 1000 down from the beginning of my experiment, without count how much transfers cost me by mnygram (almost 100 per transaction) But I’m the kind of person that when established a goal, it has to happen sooner or later so I decided to take another try.
This time I wire transfered 3000 usd. It was much cheaper that mnygram. Wire transfer has a fixed cost of 50usd plus a small % of transfer.
On July 30th, I deposited 1000usd, but more or less a week later, on August 6th another downfall to 2.04 usd on my balance. Still up in my experiment because that deposit was from my first withdraw.
You possible can understand how I felt in my birthday con August 12th.
But I don’t give up. August 19th I deposit 2000usd. And guess what happened two weeks later… on September 1st my balance was 3.15usd.
Things started to hurt. 1000 down from the beginning of my experiment, without count how much transfers cost me by mnygram (almost 100 per transaction) But I’m the kind of person that when established a goal, it has to happen sooner or later so I decided to take another try.
This time I wire transfered 3000 usd. It was much cheaper that mnygram. Wire transfer has a fixed cost of 50usd plus a small % of transfer.
Damn it!
So… reviewing, I deposit 300usd and withdraw 2000. What incredible feeling.
But something change, things feel different.
What? You may asking yourself… Things started to care. Before I withdraw, this was just a game, now was real. Before, I opened positions without hesitation or fear, almost without think (obviously with previous analysis).
Doing the same things that I did from the beginning, basically trading by intuition, I reached my peak in July 11th of 33737.14 in my balance, but my equity was 15118.28, that means that I had -18618.86 in open positions.
My biggest mistake was not to have a money management plan. As my balance was increasing, my positions too. I started with positions of 5000 and 10000, later 20000, 40000, and 80000. Finally positions of 100000, 200000 and 400000.
Now I can say, What the hell was you thinking… 40usd per pip? And you can anticipate what happened with all this over leveraged positions…
As a plane with a problem, I was a fireball crashing with the ground. July 17th was the end… my balance was 19.78 usd.
But something change, things feel different.
What? You may asking yourself… Things started to care. Before I withdraw, this was just a game, now was real. Before, I opened positions without hesitation or fear, almost without think (obviously with previous analysis).
Doing the same things that I did from the beginning, basically trading by intuition, I reached my peak in July 11th of 33737.14 in my balance, but my equity was 15118.28, that means that I had -18618.86 in open positions.
My biggest mistake was not to have a money management plan. As my balance was increasing, my positions too. I started with positions of 5000 and 10000, later 20000, 40000, and 80000. Finally positions of 100000, 200000 and 400000.
Now I can say, What the hell was you thinking… 40usd per pip? And you can anticipate what happened with all this over leveraged positions…
As a plane with a problem, I was a fireball crashing with the ground. July 17th was the end… my balance was 19.78 usd.
What the hell?
Opened positions as crazy, looking almost every major pair, trying to catch every single swing, I was doing well. Incredible well reviewing at the present time.
With no knowledge at all:
- Just trading by intuition, I mean, what I think that could happen to a currency from day to day
- No idea what a technical indicator was
- No idea what a bar or a candle bar was, I traded just with closed price line charts.
- Trading in only one timeframe, 15m in some pairs and 5m in others
- At the beginning, just placing profit targets with no stop loss limits (damn it, I can say now)
- Leaving open positions till they hit my profit limit or at least converted to a small profit, cero profit or the worst scenario a little small loss.
- No money management at all, no idea about risk and capital preservation
I now realized what lucky (and stupid) I was at that time and don’t understand how it could happen. As I said, I was doing well at the point that I had 19k in my balance in July. I though at that time, I don’t see any money in my hands, so I make my first withdraw of 2000 via mnygram as well (completely disconnected from my bank account).
I withdraw the money and was extremely happy… “This works!!!” I said.
But something change…
With no knowledge at all:
- Just trading by intuition, I mean, what I think that could happen to a currency from day to day
- No idea what a technical indicator was
- No idea what a bar or a candle bar was, I traded just with closed price line charts.
- Trading in only one timeframe, 15m in some pairs and 5m in others
- At the beginning, just placing profit targets with no stop loss limits (damn it, I can say now)
- Leaving open positions till they hit my profit limit or at least converted to a small profit, cero profit or the worst scenario a little small loss.
- No money management at all, no idea about risk and capital preservation
I now realized what lucky (and stupid) I was at that time and don’t understand how it could happen. As I said, I was doing well at the point that I had 19k in my balance in July. I though at that time, I don’t see any money in my hands, so I make my first withdraw of 2000 via mnygram as well (completely disconnected from my bank account).
I withdraw the money and was extremely happy… “This works!!!” I said.
But something change…
Wednesday, March 25, 2009
The experiment
When I deposited in my broker account, I was nervous about if they were going to make the deposit or if they just ran away; but I settle down when I watched in my platform the capital ready to trade. This account has 200:1 leverage so if I open a 5000 position, it represent 25usd of capital.
At that time, the next few days big news were released, Bernanke was cutting rates and US dollar was by the floor at 1.558 (EURUSD)
In retrospective, I think that my initial strategy to trade the markets was just fundamental analysis, hoping a change in a currency when a big new was released. So I went long 5000 in gbpusd at 1.9692 and wait. What a surprise the next day, two hundred pips up and make a profit. 102usd up in my account in just one night!
The experiment began!!!
At that time, the next few days big news were released, Bernanke was cutting rates and US dollar was by the floor at 1.558 (EURUSD)
In retrospective, I think that my initial strategy to trade the markets was just fundamental analysis, hoping a change in a currency when a big new was released. So I went long 5000 in gbpusd at 1.9692 and wait. What a surprise the next day, two hundred pips up and make a profit. 102usd up in my account in just one night!
The experiment began!!!
Background
I started with forex in April last year (2008) just for casualty. I was looking for any kind of investment to take. I watched the news and keeping an eye in economic news and thought, I can to it. I was looking for investments on stocks or oil, and then I found a zillion brokerage services, and open a demo account with one of them. Firstly, I didn’t have any idea of what the hell was forex; even with the broker platform running. So, I opened a position and wait, looking the little line going up or down or doing nothing as well. Watched in that position a profit or a loss, I don’t remember, finally I get what was all about (not how to trade but how it work). I realized what the hell leverage was and how it could help me (but not how it could ruin me just as happen next). No idea what an order was, neither limits, pips, spread, money management, margin call (I learnt that one in the worst hard way).
At that time, I didn’t know anything about technical analysis or anything about markets. Time goes by and demo account expired. Then I looked for another broker, someone with a better trading platform and with a better way to transfer funds, deposits and withdraws as well, but disconnected with my bank account (I distrust by nature), so I found it. I deposited 300usd via mnygram on April 29 2008. Because a welcoming bonus, broker duplicate my deposit to 600usd and that was my initial capital. At that time, I thought, if I lost 300usd, not a big deal so let’s give it a shot.
Keep reading the next post…
At that time, I didn’t know anything about technical analysis or anything about markets. Time goes by and demo account expired. Then I looked for another broker, someone with a better trading platform and with a better way to transfer funds, deposits and withdraws as well, but disconnected with my bank account (I distrust by nature), so I found it. I deposited 300usd via mnygram on April 29 2008. Because a welcoming bonus, broker duplicate my deposit to 600usd and that was my initial capital. At that time, I thought, if I lost 300usd, not a big deal so let’s give it a shot.
Keep reading the next post…
First blog entry ever
So well, this is it. The intention to this blog is to keep track over the forex market and the possible trades that I could make. Properly this is a log or journal, but using nowadays terms, just we’ll called blog.
I don’t want to make incredible long any entry because anyone have enough time to waste, but I hope to cover every single aspect about what I considered to take a position, all my hesitation and determination, failures and victories.
As for the title of this entry, this is my first blog entry ever, and I hope I can keep up to date this blog, even I’m through a very difficult harsh time in my life of uncertainly and depression. So if you read some comments a little dark in your point of view, you know why.
Definitely, this blog is for my review and analysis and I don’t care if no one visits it, but if you, the reader, think that you can help me in any aspect of my analysis, any kind of help is well appreciated. Using the words of a extremely good forex trader that I had the privilege to mail with a few times, I’m a rat in the dismal rat race but I’m here to probe the opposite.
Final words… English is my second language, so if you found some grammar errors, I apologize in advance. The intention of this blog is to practice my language skills as well. I speak Spanish and I’m trying to learn german as well, so you could mail me in this three languages.
In futures entries I’m going to explain all my background and issues along the way.
I don’t want to make incredible long any entry because anyone have enough time to waste, but I hope to cover every single aspect about what I considered to take a position, all my hesitation and determination, failures and victories.
As for the title of this entry, this is my first blog entry ever, and I hope I can keep up to date this blog, even I’m through a very difficult harsh time in my life of uncertainly and depression. So if you read some comments a little dark in your point of view, you know why.
Definitely, this blog is for my review and analysis and I don’t care if no one visits it, but if you, the reader, think that you can help me in any aspect of my analysis, any kind of help is well appreciated. Using the words of a extremely good forex trader that I had the privilege to mail with a few times, I’m a rat in the dismal rat race but I’m here to probe the opposite.
Final words… English is my second language, so if you found some grammar errors, I apologize in advance. The intention of this blog is to practice my language skills as well. I speak Spanish and I’m trying to learn german as well, so you could mail me in this three languages.
In futures entries I’m going to explain all my background and issues along the way.
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