24th January

Hello John

I am so sorry I wasn’t available yesterday afternoon to chat to your group. The afternoon just got so busy and I had to step out.

It’s been a roller coaster week for trading. I am entering trades a lot more confidently but I still have a confidence problem and am doing some reading on improving this and hopefully it will work out. I have always been a fan of Paul Mc Kenna and I got his book on improving your confidence this week and am working my way through it. I have already found that a lot of what he says makes sense and I bought it with trading in mind.

I entered 8 trades in one day and lost 3. My losses were big but end of the day I broke even. I took to heart what you said about trading on the longer term and entered the euro trade with you and made 26 pips. The currency was in a channel all day and only broke away end of that day or the next day. It was a great channel to be in and I could have made pips long and short but once I recouped my losses I stopped trading for that day.

I understand I need big stops for longer time frames and I used this method on Thursday when I entered a cable trade. Cable was going down fast and the news on dealbook constantly said that everyone was dumping cable so I thought ok lets go in for a longer sell. I made a few big mistakes.

1 the first error was that I should have entered when it was at ..80 but as I’d just logged onto the Vt I wasn’t in the zone yet. Something said to me at the time enter at ..80 but I was afraid to enter after only just signing up to the charts so I waited.

2 The other error I made was having the 15 chart, 5m chart and 30m chart all open together. This meant I had three charts open on one screen but they weren’t fully open. Know where this is leading to???? You guessed it. When I entered the trade at ..42 I put in a 40 pip stop and then let the trade run and left it as you had suggested the previous day. I came back and saw I had been 13 pips in profit and then it whipped back up and took my profits and my stop out. I was so mad at myself as I felt I should have stayed and watched it but as I was going in for longer term I didn’t want to sit glued to the machine making myself mad

3 After my loss I had a good look to see why I was stopped out. All the time frames still said to stay in but I had stopped out for some reason. Had my stop been 100 I’d have been smiling as it did turn around and come back and dropped several 100 pips. The reason I got stopped out was that I entered at support which I only noticed once I had opened the charts fully. ..42 was support and had I looked at the 5 minute chart more carefully I’d have seen that it went flat there several times and stayed out and waited for a breakout. So best action was to stay out or go long for a while and then go short when it turned and dropped like lead again.

4 although cable was falling the candles were very iffy. One was long the next shorter and the spikes were very long. Afterwards we watched a 15m candle and saw that it jumped over 50 pips in that time and not slowly, it would rush down 30 and then whip back up 50 and then rushed down again. Every candle would have stopped me out. I compared the previous day’s euro trade to the cable one and saw immediately that the euro candles were far more even in length albeit shorter and although they moved 10 pips either way over a 15 minute period it wasn’t a mad rush and the fluctuation was easy to handle.

This set me thinking again that I just don’t have an account big enough to weather 100 pip stops. So as much as I’d like to trade the 15m chart I can’t enter it unless I get good confirmation on the 1m and the 5m charts.

Yesterday morning just as we logged onto the charts I saw an opportunity to go short on the euro for a few pips on the 1m chart. I said to Leigh ‘look here the Bollinger band has turned, the MACD has turned and a sell would be good at 22 and risk 6 pips and get out if it goes beyond that.’ I wasn’t expecting him to enter this trade. He did at 20 and it went up to 27 and then turned and fell all the way down to 02.

He freaked as he said ‘what the hell am I selling for when this is clearly a buy’ and I said ‘it’s the 1m chart and there is a retracement, the trend is down anyway and the 5m will give you the same confirmation soon’. It did and he got out when he broke even and felt sick when he saw that it dropped a further 18 pips after that. This trade made me sit back and think and I tested it in my mind twice more to see if I was right in getting in when the Bollinger band turned. Every time it worked. This is how Darren trades and does so well.

Later on the euro went up while we weren’t been watching it. Another mistake to get in. We both got in. I set my stop at 20 and so did Leigh and would you know it as soon as we entered it turned and went south. I baled at 15 pips as I didn’t want to give up too many pips on a 1m chart trade. Leigh stayed in. it turned at 19 pips against him and went all the way back up and he made a 27 pip profit. Yes I could have stayed in but I realised it was a bad trade to enter as I wasn’t sure if it had reached the end of its run. It had. Leigh took the last pips to be had at ..77 and the euro went all the way back to 00.

I find I keep doing the same mistakes. Entering on a run that could end at any minute. Rather walk away as there are always more runs to be had.

I’ve been trading three months now on real money and it is nothing like my demo days. I have learned so much since I’ve gone live and there’s so much I didn’t try out on demo instead reducing my bid to the minimal and using real money to try out things like support and resistance which I can see now was hit and miss when I did demo and my demo successes were to me a fluke. I only learned proper trading when I went live. To go back to demo trading wouldn’t do it as your mindset is so different in demo as it is in real money’ and so I will carry on the way I am and keep learning and hopefully reduce my continued mistakes over time.

And that’s my trading for this week. I’m still not disillusioned. I still dream of charts and when I visualise trades I never think of losses only wins. Early days I keep saying but boy do I get frustrated when I screw up.

Have a good weekend
Desiree