INVESTACUP 2018 - End of October Progress

Progress:

216th place after 1 month.

Most of that trading gain came from trading ISM and IRC.

I sold IRC before it was suspended.  Initially, there was a sell off during the first hour after the suspension was lifted.  This was brief and the bulls brought the price back up and even closed really strong for the week.  No regrets as I sold at NET gains.  This could still be in play next week just based on the price action.

I tried to sell part of ISM before it got suspended but fortunately my asking price wasn't hit.  The stock rallied upto 20% after the suspension was lifted a few days later.  UDENNA Corporation used ISM to take the company public through a backdoor listing.  This stock however closed quite weak with the prices dropping below its previous high of 3.60.  Strong potential but I'd rather wait a few days and see how this will unfold before considering it again.

INVESTACUP 2018 - is the virtual stock trading competition hosted by Investagrams.com

"We are what we repeatedly do.  Excellence, therefore, is not an act but a HABIT." - Will Durant

Next goal is to maintain being in the positive and hopefully enter the Top 100.

I once advised a friend who started out so well with a 9.0% gain just at the first week of Investacup.  I told him to just sell and hold on to his gains since he said that he would start working again and wouldn't be able to monitor his portfolio.  If he had done just that, he would still be in the Top 70s now.

A lot of traders over trade, including me.  A lot of traders lose money because they don't know how to square a trade when it goes against them.  I would like to work on these mistakes and include these in my process.  80% of our gains come from  just 20% of our trades.  A professional trader's hit ratio is normally below 50%.  That means that traders enter losing trades more often than winning ones.  If we cannot control how we lose, then we end up destroying our capital.   

"I am a PROFESSIONAL TRADER.  I am a RISK MANAGER.  I protect my CAPITAL by squaring (breakeven) trades.   I let my winners run and never let them turn into losing trades.  I aim for NET gains."     

Freedom Fighter Lives to fight Another Week

The freedom fighter lives to fight another week ... with a 10% gain to boot! 

If this past two weeks is going to be an indication of how my future will be, I would be extremely excited.  I was able to earn 10% from my FXCM account trading the strength in the Japanese Yen (JPY) and trading SPX500.  

Yes, I resurrected this trading account primarily because I wanted to participate in the US stock market (which now is in a heavy correction by the way) and trade the S&P 500 and the Dow Jones Industrial Index through the SPX500 and US30 CFDs respectively.  Since my background started with trading stocks, I find trailing these indices easier than trading currencies.  There's so much more volatility in these as well, making it easier to trade / scalp.

Screenshots of my trades.  My choice of weapons as you can see are MACD, RSI, Moving averages, and Fibonacci.  Normally I would just trade one way with a bias - meaning if my trading system tells me that today the SPX500 is going to be bullish then I would only enter trade signals that give me a BUY recommendation.  This time around though, I traded both ways - the market was quite indecisive and I'm glad I was able to successfully scalp both ways.

Lot sizes are at 2K only to protect my small account.  Longevity is key!  When I got a bit cocky, I traded with 5K lots.  Lo and behold, the first trade in that lot size was a loser!  I lost all my gains in an instant.  It doesn't show in the screenshot but you can see the Summary tab with a -43 written on it, meaning that trade was still open at the time I took this screenshot.

I experienced pain.  And I was uneasy during this trade.  I then remembered what Ray Dalio said about PAIN.  He said that PAIN + REFLECTION = SUCCESS.

I needed to reflect why I was feeling pain and why I was uneasy while the trade was still on going.  I realized it was because I wasn't comfortable with the position size.  Every 2-PIP move now translated into a dollar instead of just a few cents.  I was also trading my balance - or what others would refer to as Profit and Loss - instead of trading the price action.  Given the bigger lot size, just a few moves and then I would easily gain or lose 10 USD.  This was already big for me  - my mind was telling me to lock in the gains or cut my losses already even though it was only a 20 PIP move.  When I realized this, I made a mental note not to look at my P&L and just concentrate on the price action and the total movement in pips.  This made me stick to my trading system better.  It also lessened my uneasiness.  I am growing.

If you are not GROWING, then you are DYING.

After that big loss which wiped out all my gains for the past 10 days,  and even left my account in the red, I entered another trade, in the same direction.  In just 15 minutes, I got all that I lost back plus a little more.  My analysis of the movement was correct but my entry was too early ... good thing I was able to get over that previous lost right away and act in spite of my fear of losing more.  If I had not done so, I would still be in the negative right now.  But I realized that I've started to over trade and increasing my lot size although bold was being careless.  So I took a break after and decided maybe to call it a day already.

Back reading some previous posts, I realized that it was this type of impatience and carelessness that led me to blow my account in the past. Good thing I was able to check this behavior this time around.

In taking profits or buying on support, I find using the FIBONACCI retracement tool very helpful.  I'll try and write about this next time.

100 USD Net Gain 

After a couple of hours, I return to my station to trade again.  You can see my trades from the chart above.  Most of it are scalp trades, I can't believe that I am actually able to ride most of the moves in both directions.  That's the power of Fibonacci!

I'm trading with 5k lot sizes now.  It didn't make me as uneasy as I was earlier.  Could it be that my psychological wallet has now increased?  Not looking at my P&L really works.  It allows me to focus on the price action.

Here's my final account snapshot before I called it a day ...

very happy with the 10 percent gain in just 2 weeks!  If I can trade like this or better then the goal is not that far away anymore.  

BE POSITIVE

My last trade for the day was unsuccessful and it caused me about 30 USD.  So my return should have been about 13%.  You know what? I sulked and almost punished myself for ruining that last trade - I was already up about 50 pips and yet I still let it turn into a losing trade.  The reason was because I moved my target price limit up a few pips.  The market then reversed rapidly in the next 3 minutes which hit my cut loss point.  

I couldn't believe myself!  The perfectionist in me always comes out.  Instead of focusing on that 1 losing trade, why didn't I focus on still being up 10%?!  Diba?!

When you're in this business, making errors and losing trades are a daily part of it!  You should be gentle on yourself and learn to accept that losing trades are normal for a trader.  If you cannot reconcile with that fact then trading will definitely be not for you.

That last one may have been a losing trade but it wasn't a bad trade!  I just made a judgment mistake of moving up my target price without moving up my cut loss point as well.  But it was a good trade!  In trading, we can have good trades but still lose money.  Accept that fact if you want to last in this business.

Resurrection: Freedom Fighter

Moving onward towards Financial Freedom!

I'm back!

I realized that this goal is not going to be easy.  It's the toughest one that I must pursue.  It's the only goal that counts.  It's the only goal that I must never give up on.  Besides, no goal worth fighting for is ever going to be easy.  

We may feel more accomplished and successful taking on easier goals in life but the danger to that is that we never grow and stretch our potential.  When we stick to our comfort zones, we limit our potential, we limit our growth.  Achieving and accomplishing something should not be the end goal - sticking to the process, continuous growth and learning should be the aim.  

When we learn to 
enjoy the process, 

when we focus on the process, 

the MONEY WILL COME.

I have resurrected my Forex Trading account with a capital of 1000 USD.  This time around I would like to trade the account professionally.  

My trading mantras: 

Trade like a professional Trader.  

Be patient.  Wait for the setup to show itself.

Trade the price action not your P&L.

The US Dollar is breaking into new 52-week highs.  Looks like this will be the theme for the rest of the year with the FED hiking rates and the US equities market making new highs as well.  

Since coming back, I've made only 6 trades.  4 out of 6 are winning trades!  One trade was an execution error which I quickly closed to break even.  So I still encounter some mental lapses from time to time.  I think it happened because I suddenly felt the rush to enter the trade and I was already sleepy from staying up late.

This week's trades were:

Long S&P500

Short AUD/USD

Short NZD/USD

Losing trades:

Long S&P500 (cut point level was too low, I got whipped)

Long NZD/USD (execution error)

I've managed to increase my portfolio by 2% in 1 week.

The goal as a start for this month would only be to break even!  

As a last note,  I came across this quote from Jeff Cooper, successful trader and best selling author of the Hit and Run Trading series,  

photo by: Milan Popovic @ Unsplash

The single most 

IMPORTANT TRADING WEAPON

you possess LIES NOT in ANY COURSE or BOOK

but WITHIN YOU!

Milestone: Profit in May!

Just had to write a quick note:

I think I've achieved another milestone in my Forex Trading career!

After having an excruciating time month after month suffering from loses and even wiping out my initial capital, I finally was able to finish a month in the green! I've managed to finish not only at break even but actually earn a few dollars as well.

I opened 2 accounts:

1. Account for Mirror Trader - FXCM's online platform where you can automate / copy the signals from other traders.

2. Regular account with Trading Platform - for my own style of trading matched with some recommendations from Mark So.


Mirror Trader Notes
- Mirror Trader really worked well for me.  My account was up 40 USD or 8% in just 2 weeks.
- I just automated the trades - I had success following these strategies: TrendMacD, Breakout2, Glimspy.
- Even the automated trades are not a guarantee for success though.  You still definitely have to watch out for the trades.  It might be better to just monitor the signals live and just copy those that are in line with your trading strategy for the week.
- I had success when every time the trades would be in the positive already, about 15 pips, I would move the trailing stop to a gain of 3 to 5 pips.  This ensured a little profit even when the price action would reverse later on.  There is a downside to this strategy though.  Some trades that could have earned more apparently got stopped out by a shallow correction before the big move.

Mark So and Trading Station
- To be honest, this is still a struggle.  The first 3 weeks of the month my portfolio was down about 20%!  or about 100 USD.  I only managed to gain everything back and a little more on the last week of the month when I was able to ride the weakness in the EUR, then the weakness in the GBP followed by the NZD.
- It was definitely a see-sawing month.  I simply can't resist the temptation not to trade.  This is the part where I have to work on the next month.

- The only reason why I survived is because of position sizing.  I've reduced my lot sizes to just to 2k instead of 5k or 10k.  This allowed me to be still part of the game even when I had a lot of losing trades at the start of the month.

-  Another thing I noticed is that when you look at price action,  for some reason, there will be those that your gut will tell you to follow.  More often than not, your gut will be correct.  If you are able to spot a currency that is trading strongly  or weakly then it is time to buy a CURRENCY BASKET!  Trade that currency and just trust the price action.  This is the moment when I confidently increase my lot sizes.  Instead of just 2k, I might trade 4k, 5k, or maybe even 10k when I'm really confident.  This is how I was able to gain back all my loses for the month.  It is beneficial to patiently wait for these moves!  These normally happen after a big announcement or news event.

- Lastly, to maximize profit and minimize getting stopped out prematurely.  Trusting the round / whole numbers might help.  I found success placing my stops and limits just below or above these numbers.  Example, 93, 93.50,94. These are normally in the 50 pips range.  And I wouldn't want to bet on further movement unless these numbers were surpassed convincingly - in technical terms, there was a break out.

- As for Mark So's strategy, if it works then it definitely works.  There's still an element of luck involved though as the analysis could be wrong at times.  And when your trade is on the wrong side of price action then you can definitely lose a lot of money as well.  If you get it right then well and good.  If you are using his strategy I would definitely consider managing your position sizes so that when the trade goes bad it's not so devastating to your portfolio - you live another day to trade.

I don't know if Mark has ever conducted a survey among his students asking whether they are successful in trading forex for the long term.  If he did, I bet he'd get a very small percentage that's doing well long term.  Yes, he'd definitely get some astounding reviews short term but what good is short term if you want to trade Forex for a living right?  Like at the end of May, Mark posted a message in the group asking for feedback from the group on how they are doing.  He knows there are bound to be some who are doing well, especially those who just started recently.  And he would then be able to use those in marketing his classes / services.  Case in point, is Mr. Fitz Villafuerte of Ready To Be Rich.  I remember a Forex Club banner that featured Mr. Villafuerte as saying how impressed he was with the result of his Unlitrader trade.  I think he was quoted as saying something like 'wow! 800 pips!"  But behind that message,  we never know how he actually did in real life.  For all we know it was a one time trade.  And my suspicions might be true because I remember seeing him when I took my complete Forex trading class.  He was there to take the refresher class, part of the incentive of being a lifetime member of Forex Club Asia.  If he was doing well, why go back to take a refresher class, right?

But regardless of this all,  Mark's complete Forex trading course is still worth it, I think.  Go there to learn from him.  Learn his system and apply it in your own trading.  If you listen intently, you would actually be able to make your own Unlitrader system.  You wouldn't need to sign up and pay for that additional fee.  What's good about him is the fact that he actually teaches the system that he uses.  At times hist trades might deviate from what he teaches but I guess this is where experience comes in.  There are times when the news and the technical setups are not that clear and this is when he uses his experience to come up with a strategy for the week.  If Mark makes the effort then these are valuable info that you can use as well.  However, if you're just looking for a get rich system of some sort, I suggest you don't take the course, you will only be disappointed and you will only be wasting money.    


That's It.
I hope June would be kind to me and to all Forex Traders out there.
Pips Be With You!

Red February

Pips Be With You!

February is the month of hearts.  It's the month of romance.  Everywhere you go you see red.  And my trading performance was no exception.  Hahaha

Indeed.  My portfolio scored negatively big time in February.  There were moments when I drifted back to my impulsive self - trading recklessly just to try and recoup loses.

Regardless, February was also a month of maturity.  I actually believe that I'm starting to take a grasp of the market and learn how to trade.  I have more days earning now than losing, I think.  The only problem now is controlling the loses on days that I'm losing.  You'd think that 5 days of trading is more than enough, the thing though is Greed can still set in and you'd want to trade more and more just to try and earn more.

This is I think where position sizing and setting caps and limits to your losses and earnings will help.  All one has to do is follow that system and have the discipline to stick to it.

In the meantime, Mark So has migrated his copy trading service into a new site.  It's now called unlitrader.com.  The idea was to separate the educational materials in the old site from this new site hoping that notifications for the copy service to work more efficiently (to be delivered on time).  There's a slight improvement in the service but still notifications can arrive delayed.    

While copying Mark So's trades still doesn't guarantee success in forex trading, there are a lot of other ways you can use the service.  Aside from the basic fact of using it to copy his trades, you can also use it to confirm your analysis of the forex market.  You can also use it as a tool for contratrian trading - entering trades opposite of what was recommended.  The idea behind contrarian trading is that most Forex traders enter losing trades.  Less than 5% of Forex traders make it in the market.  So by entering trades opposite to that of what was recommended there's a good chance that you could be on the right side of the trade.

The value really with Mark So's unlitrader service, I think, is when you join the Unlitrader program.  Using fundamental and technical data analysis, the service generates recommended trades for the week.  I think I was able to replicate the service on my own - but it's highly dependent on the analysis so if you want Mark So's analysis with it, you'd have to subscribe to get his exact recommendations.  What's good about Mark So though was the fact that he discussed how he arrived at this system during his Complete Forex Trading Seminar.  While the program is expensive, it can still be worth your time.  Just don't expect to be trading successfully right after the course.  That's the sad part about all these, a lot are lured to taking the course thinking it would be that easy to make money in the Forex market.  Mark So after all is a good marketer and businessman as well.