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.
