My first trade was a loser and that is not good but if we look at the bright side we can get some good forex lessons from this first trade. I have a list of points of areas that this trade could have been improved. After the list of improvements I will then list the good points of the trade and then we will begin to improve our trading each time making sure that we don’t make the same mistake twice. I am counting on you the readers to hold me accountable to this, make sure you always go back and double check on me.
That is the ultimate accountability system, and I think that every one will learn a great deal in the process. If you remember our target was 1.2250 and the price did get to 1.2216, If you closed at the top you could have made +37 pips which would have been a good trade. I however did not, because it happened at 5am when I was asleep.
Long Eur/Usd – 33 pips
Ways to improve:
- I spoke of being patient but this trade was not patient. I broke the rule of waiting for the right setup. While the setup was decent it was not a setup that I had 100% confidence in. Because it was the first trade I was anxious and I excited to put one out for everybody. This will not happen again, next trade will be much more patient.
- Going against the trend: there are times when it is ok to go against the trend this was not one of those times. The best time to go against the trend is if you get a trend line break and this clearly was not the case.( I even had a reader gently remind me of my error, thanks you know who you are :))
- Looking at other time frames to see other signals. I looked at the hourly chart and there was a buy signal but on the 15 Min chart there was a sell signal. When looking at chart time frames the longer time frame chart will be the guide but looking at what is going on, in other time frames can help.
See Chart Below:
Now That we have taken a look at areas of weakness lets look at some good points,( yes you can find good points in a losing trade :))
Things to keep Doing:
- We waited until the close of the 1 hr candle to enter trade ( that was well disciplined and good)
- The trade had a valid buy signal(even if it was a weak one)
- We used Stop Losses and Limit orders
- We practiced Money Management Discipline by keeping trade size at 1%
- We did well by keeping a journal now we know what was good and what was bad so that we will be able to work on the process on the next trade.
Next trade I will be looking at the mistakes and I will make sure that I don’t repeat those same mistakes. In addition to the looking at the mistakes I will be looking at what went right and I will DO those things again. So now can you all see the benfits of a trade journal? A forex journal is truly one of the best ways to improve your trading. This was a losing trade but in my opinion a great forex lesson for everyone involved. I will be doing more analysis over the weekend so make sure you come back so we can get ready together to make our next trade a winner.
If you found some areas of improvement that I missed or if you found some positive things that I missed please add that as well. If you need any clarification please ask the question right here in the comment thread. Thanks and have a great weekend.
P.S. I did a guest post on Leadership that I was pleased to do, if anyone is willing to do so it would please me if you can stop over and check it out and say hi.
Winner’s Edge Trading, as seen on: