…. and holding our emotions in line when we lose.
Wow! what was last week all about? One of those times when we really should sit on our hands and (in the words of the late John Lennon) “watch the wheels go round and round… no longer sitting on the Merry-Go-Round” instead of trading.
But could we… with so much news coming out I, for one, just had to make a trade. So I did, I traded what I saw (as I believe many did in the live trading room with Michael) and lo and behold, the market didn’t do what we all thought it would on the last three days of the week. We sort of figured wacky waldo wednesday would be like that and I did indeed sit on my hands (for the best part at least. Being a dyed in the wool scalper, I did get a few pips from my favourite EUR/JPY with all the volatility.) Thursday was a rose between two thorns and I did well.
Then friday happened… Working with Michael, watching the information he was sharing with us, it seemed sure to be a profitable day. All the signs were there but (as Sophia has mentioned before) Mr. Market had other plans. Devious, pip robbing plans as it turned out. I went short on the EUR/JPY which, according to market trends, news and on the spot analysis of 20, 40 and 200 SMA’s, should have been the right trade. I sat before my screen and watched the pair shoot off into the heavens and stop me out. Ok, not to worry. We all can’t make money all the time. I thought I’d joined the 90 – 95% losers JUST for that trade. I could make it up on my next trade. I began to scalp, buying here, selling there. Entering and exiting trades with nimble footed awareness that this wasn’t an ordinary day of trading. Back in the 5 – 10% of winners.
Then everything went belly up. The trend turned, it wasn’t going the way I anticipated. The market wasn’t taking notice of the news. Even the “magic” time of 09:50 to 10:10 (EST NY session time) didn’t have the right bearing on the market. It’s supposed to reverse between those times. It didn’t. I watched myself get stopped out time and time again. My emotions started to cloud my thinking. I began chasing pips, getting very aggressive in my trading, making mistakes and losing pips by the bucketful. Instead of the 53 pips up I was from the London session, I was looking at -250 pips. Then I finally stopped trading. Dejected, defeated and thoroughly emotionally drained. NOT a day to take my pips and go to the beach.
I won’t take up any more of your precious time. Thank you for staying with me this far. The moral of this sad story is quite simple and goes hand in glove with the “scalper’s disclaimer” I always put at the end of my articles. (I should type it individually and not copy and paste it. It will be fresh in my mind at all times then.) You HAVE to have discipline when trading. You have to get a plan/strategy that works for you and you HAVE to plan the trade using your own criteria in accordance with that plan/strategy. The way I see it, trading is similar to a bouncing ball on a chart of numbers. The ball doesn’t ever stop bouncing and the numbers it lands on are the number of pips you win or lose during any particular trade. The trick is to (obviously) get the ball to land on + numbers. What the plan/strategy does for us is to maximise those positive bounces. In this example, the best way to do that is to leave the number alone, wait for the ball to bounce on it. Law of averages alone will do that at least. What I did friday, and many traders do and subsequently fall in the 90 – 95% of losers, is to try and move the number to where we “think” the ball will bounce. That is where I went wrong on friday and I freely admit it.
Monday (or sunday night if you try the gap trading offered by Tim Black in his fantastic series “Forex Gap Trading Plan – Part 1 – 4“) is another day. We’ve had the weekend to chill, relax and muster our forces for another brilliant week in trading. See you all in the trading room with Sophia (London session) and Michael Storm (NY session).
May all your pips be profitable ones.
Mike Griffiths (aka YankeeClipper)
A profitable strategy is useless without discipline. Many traders end up losing money because they fail to make trades that meet their own criteria.
“Plan the trade and trade the plan” …. Success is impossible without discipline.
Latest posts by admin (see all)
- How to Use Candlestick Patterns to Start Winning More Trades - March 19, 2017
- Weekly Review Strike 3.0 - December 16, 2016
- I made 3.91% Return Today - October 20, 2016
Winner’s Edge Trading, as seen on: