Trade 240213

Yes, it’s been more than a month since I placed any trades = FACT! 🙂

In some ways this serves to make the point from the earlier (much earlier) video post that I’ve not got a great deal of time in which to actually trade and this blog will only detail trades I’ve made.

If I’m to trade with any confidence I like to have developed some ‘connection‘ to the market and this is ridiculously difficult if you’re actually working 50+ hours per week in a completely non-trading related job.

However on Sunday the ‘DOWNGRADE’ (cue dramatic music) of the UK was able to penetrate even my tired brain so along with the rest of the FX community I wondered what would happen to the good ‘ole pound on Sunday at 22:00. We were not disappointed.

So on this basis I was looking to go long for the close of the gap which is basically a play on the liquidity available in a given direction following a sharp spike down. Booyah!

240213 GBPUSD M5 Gap

So I got in just above the lower red line and the upper line was nominally my target.

The eagle eyed among you will note that I closed everything about half way between the two points but I’ll come back to that at the end of this post in what will be famously known as NOTE 1

Here’s a slightly more interesting view with annotation from an M1 chart

240213 GBPUSD M1 Gap

Now this is all well and good but at the same time I also made an error… Due to having the attention span of a drunk monkey with ADHD I saw something on twitter about a huge gap up in USDJPY which got me all excited. Rather than having a trade idea (as I did with GBP) all I had here was optimism and spangles. What I also managed to do was put my fat monkey finger on the ‘at market’ button while messing with stops/limit settings.

I ended up with this…

240213 USDJPY M1 Gap

There are so many reasons why this was a bad idea that I can’t list them all here… apart from the fact that my clumsiness got me into it in the first place. I could have had a bit more subjectivity and moved my stops then been ‘saved’ later in the morning but after grinding this out for an hour I felt that discretion was the better part of valour.

What I have rather grandly referred to as Note 1 goes as follows…

NOTE 1

Retail traders with very small accounts (of which I most definitely am one) are overwhelmingly disadvantaged by the ridiculously awful psychology associated with having no goddamn money.

There, I’ve said it out loud.

Let’s combine this fact with the other monstrous problem which is that new traders lose. You don’t know what you’re doing and are compromised (massively) by the fact that the money you have is actually important on a relative basis.

Is this anywhere near optimal? No it’s not.

To butcher a quote ‘we hold these truths to be self evident’ so the solution (having looked squarely at the problem) is to change things which means another mad work day tomorrow.

Cheers for sticking with me on this people. I’m still having fun and maybe I’m actually improving.

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6 thoughts on “Trade 240213

  1. Rob Brennan

    Hi fellow Robert, No 1 son has just pointed me towards your blog, excellent stuff!
    It’s always interesting to see someone else starting on the journey of trading and like myself you’ve chosen the spread betting route. I’ve been kicking the tyres around the trading vehicle for a few years now but like yourself I also have a 50 hour a week job that I hold down and over the last 10 years I have also been training myself up as a coach/therapist in the personal development and change work field. Busy, busy!
    I’m now starting to apply said trainings to trading and the psychology and emotions surrounding trading. I’ve recently started a blog on the subject and would really appreciate any comments or inputs as to what you feel people would like me to cover in the coming months. So if you’ve a spare 5 minutes have a quick “butcher’s” at my blog over at tradingbreakthrough.com

    Regards

    Rob

    Reply
    1. robertsweetman Post author

      Hi Rob

      Thanks for the link and the comment.

      I’ve probably spent as much time on ‘self development’ in order to crack the trading conundrum as I have spent looking at charts 😉

      One suggestion I’d make is to cover ’emotional state management’ or how to get to a point where you’re able to look objectively at your own behavior while you’re actually in a position. This is something I’ve started to be able to do (take a step back) while in a trade having been meditating for almost two years but I’d guess there might be a more efficient way of learning this type of skill? This isn’t trading without emotion since that’s undesirable but being able to observe in the ‘gap’ between reaction and action without succumbing to fear/panic – lol.

      One observation of my own though is that no amount of psychological resilience will help if your trading method sucks. This means that due to the huge amount of non-effective so called ‘training’ out there new traders usually get programmed to fail and then go looking for emotional/psychological tricks in addition to the famous ‘holy grail’ system. By the time they’ve found something that works for them their emotional capital is in short supply.

      I’d suggest that the first task is ‘learning to see’ (in real depth) what the market it doing and figuring out how to profit from it.

      If you’ve internalized a behavior over time through repeated successful outcomes doesn’t the psychology take care of itself?

      Interested in your thoughts on this

      Robert

      Reply
      1. tradingbreakthrough

        Hi Robert

        I couldn’t agree more where you say “no amount of psychological resilience will help if your trading method sucks” that’s why I’m steering well clear of talking trading plans and styles.

        However there are people that I know who can read a chart like a musical score but can’t trade them because of fears, fear of (monetary) loss, fear of failure and so on, so I know it’s not just having a trading plan that works.

        I remember a story Tony Robbins tells about working with a top trader (we are talking billions) who lost his “trading” mojo and Robbins was brought in to get him back on track. Using similar techniques to those we use in NLP he was able to turn him around. A lot of the time it looks like someone is just “stating the bleeding obvious” in NLP but we often need that someone from outside to state it. Which leads me on to where you talk about looking objectively at yourself when in a position and there is a rather neat NLP technique which could be adapted for this, so with your permission I’d like to address this in my next blog. (No names no pack drill if you prefer but if you would like a link to your blog from the post I’d be happy to oblige)

        Emotional state management is ultimately where I’m heading towards but initially I’m looking to get people more aware of firstly their baggage or the “writings on the wall” that we all carry with us, learning how to, as Ram Dass would say “just let it go” which is where the EFT tapping technique is so useful. Then I intend to start building in techniques for positive feelings and thinking, confidence and so on. working on the person as a whole so they can bring it all in to trading and their lives in general. If that all makes sense!! 🙂

        Best Thoughts

        Rob

      2. robertsweetman Post author

        Hi Rob

        Thanks for your brilliant and considered answer – feel free to link to my blog if doing so helps get your point across.

        If you really want a laugh link to something from 2011… If I re-read these I always cringe – a LOT

        I’ve already made all the mistakes so there’s no ego to protect here – lol

        I’ll definitely subscribe to your blog and contribute where appropriate

        Heading out for coffee and some decompression 😉

        Have a great weekend!

        Cheers

        Robert 🙂

  2. Miles

    wow Robert….finally CHARTS!

    I’m not sure where exactly you are in the journey, but just my few pips…
    Decrease your risk to where it doesn’t hurt to lose.
    Engage in interactions with the market. (lots, and frequently. 2-10 per day?)
    Journal/screenshot and annotate your trades, or simply price action in hindsight to get started (I have hundreds of trades on screencast for example).
    Go into your testing/learning phase with the market knowing its going to cost you a bit of money.
    Ultimately, forget anything under 20 pips. However, omit this for the sake of exercises.
    Try looking at some other pairs either than g/u and e/u.I found a lot more consistency in my trading since I broadened my universe of currency pairs.

    I found after 50-75 trades of the ‘overlap gap’, ‘breaking point’, ‘point of origin’, and ‘fractal head’ (or ‘spike base’ as this guy calls it http://www.nobrainertrades.com/2010/01/short-term-spike-base-examples.html ) I was able to tune my parameters and understanding to a point where I could atleast breakeven. Breakeven before accounting for F*** ups anyway (holding losers, being a jackass etc).

    Id say 80% of the time I get a reaction at these levels, at least enough to move up my stop most of the time. FWIW I had no success trading the asia range retest stuff or big figure. Spent a lot of time on it and just did not work ‘most of the time’. I throw out everything I cannot see consistency in 65-70% of the time.

    What helped me the most was really doing the exercises…spending the money and time to engage in the market. After you repeat something specific a few dozen times, the brain begins to recognize the patterns and you can zero in on your parameters. After a couple hundred of each specific interaction, I find habit is doing a good portion of the work for me. There is a certain amount of pain involved if I do not take the trade entry. Forget the search for a psychological approach that is going to make YOUR personality work for trading. Search through the fog of charts for ‘setups’/levels. You will find all the consistency and confidence you’ll need in them to succeed.

    Anyways, this is just how I sum up my journey since we met at the workshop. It’s still a struggle, but its a lot more fun and I have made lots of real progress. I’d like to chat on skype some time, shoot me one when you have a chance.

    Miles

    PS, per last posters comment, Tony Robbins approach is basically breaking the cycle, projecting yourself to where you need to be, and focusing on execution. He stresses that skill is the mother of repetition. There is a reason he is #1 life coach in the world, and also why he invented the term. Good teachings.

    Reply
    1. robertsweetman Post author

      Hi Miles – and yes, that’s a chart 😉

      Apologies for the delay in replying to your comment – it’s all a bit mad on the job front at the moment.

      ‘Big figure’ seems entirely arbitrary to me and although in the right conditions the Asian range has an impact I’ve not succeeded in finding a way to trade off it that is consistent.

      I’ve definitely found one pattern that I’m extremely comfortable trading. This is pretty much the retest of the low of a spike as per my last trade. The reason I’m such a fan of this is that it makes sense to me from a liquidity/psychology point of view. There is also a pretty clear target and you’ll know where you’re wrong. This is also NOT the same as trying to catch a falling knife 😉 What tickles me is that I’m buying into moves back up to reaction points that the PTC chatroom are trying to fade the whole time. I’ll send you a chart to explain what I mean.

      Interestingly I find it more difficult fading sharp moves to the upside so I’m still working on to finesse these. Maybe my brain is wired upside-down!

      Completely agree it’s the process of going through interactions which lead to an increase in the ability to judge a move, enter a position and manage it well.

      Would be good to catch up – I’ll make an attempt to get hold of you on Skype next week

      Thanks again for the comment

      Cheers

      Robert

      Reply

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