Lee Haney won Mr Olympia (8times) in a row. I know close to nothing about body building but this quote is just so reminiscent of trading.
I have been putting into practice 2 valuable lessons this week. And they seem to have improved my trading a whole lot. By a whole lot, I mean leaps and bounds.
Lesson 1: Breathe
I have this yellow sticky on my computer which says "Breathe". I put it there after I listened to one of my favorite lessons from Trading For a Living - TFL365.com. It's supposed to remind to take a step back and breathe before I take a trade after a setup is triggered.You see, I have a problem of executing a trade the minute I see my setup triggered. It's because I am always feeling like I am going to miss out on the move is I don't take the trade. And since I trade off a M1 chart, this will cause many stop loss hits before you get a win. Mentally this is pretty hard to take.
My "ding" moment happened on "Take Your Second Trade First" when Rob Booker use the analogy "wait for a bargain". All of a sudden the bells were ringing and it became clear to me that I loved waiting for a bargain when I shop. So I should use the same strategy for trading.
Yeah, this was simple and effective. (By the way, thanks Rob for letting me use this free link to Lesson 29 of TFL365.com)
I have been doing this for the last 2 weeks and it has really helped my entry.
Lesson 2: Just Wait
Hot off the presses of the Bossilator webinar on February 12th, I heard Scott Welsh say that his new thing was to wait for as long as possible before exiting his winning trades. He used to look at a risk/reward of 2:1, now he holds them until 3:1, or even more. It was just that he had to accept it might take more losses before the eventual winner.
I have been doing well getting an even number of losses and winners this last 2 weeks taking trades out at 1.5:1. It feel safer and easier than 2:1 or more. The 1.5:1 risk/reward has been helping me break-even on losses within the same day and next. Holding on for longer seems scary and counter-intuitive.
But I really wanted to know how I would feel when I was holding on to the winners. After all you get bumped around a lot because you will keep seeing the winning pips come and go.
It seemed logical but the few times I had tried to sit on a winning trade, it was painful. And I hated losing it after I saw some winnings. But then there were times when EURUSD would keep going in the a trend for what seems like forever. I mean, wouldn't be just like flipping the table around in those times when I had held on to losers for hours or even overnight?
So hot off the presses from the Bossilator webinar on Feb12th, I decided to give it a try.
These charts will have a new Stochastics 10-3-3. I added a new entry signal criteria - also from the webinar.
Today was the one of those days Mr Market smiled back at me.
Asian/London Session Trades - February 12th - Mr Market smiles at me
Trade 1 (-12pips) (look above)
This was an entry at the Resistance of 1.3250.
Sell @3234. Stopped Out @3246.
Trifecta Buy @3242 SL@3232 Exit@3275.
By the way, I held on to this trade for a nearly 4 hours waiting for it to hit the target @3280.
I really couldn't stand it anymore and exited 5pips short of my target @3275.
Trifecta Buy (also a Buy at EMA62/SMA200 Support) @3258 SL@3248 Exit@3280.
You can see the entry trigger at FIB23.
Bossilator (bars away from SMA800) was 582.
A little higher than normal for a trend trade but worth a try with a very tight stop.
This trade only took 23minutes. Looks like it was "market memory" + London Open working here.
By now I was already +43pips up for the day. I told myself to stop.
But you know what - I got greedy in the US session.
US Session - Mr Market is still Smiling
Trade 4 (-10pips)
Bossilator Counter Trend Sell@3257 Stopped Out @3267
Pride comes before a fall. I was feeling a little less invincible but still up for the day. After all it's only a little fall.
Trade 5 (+26pips)
Bossilator Sell @3260 SL@3271 Exit@3234
I didn't like the earlier loss but I did pick myself up and thought I would give it another shot.
Nett for the day +59pips!!!
It was totally amazing and I was totally drained. It took "industrial strength" mental capacity to hang on for so long. Watching the profits ebb and flow was excruciating but the results felt good.
I am amazed at the power of Breathe and Wait - Take your second trade first to Enter and Holding On to profits until you can't stand it any longer!!
Seriously this is the best trading day I have had in loong while.
Tune in next time and watch how I handle my winnings.....(or not)
Happy Trading!