Friday, May 04, 2012

Setting a Time to Trade

Making time to trade is hard when you are have other distractions around. I stopped everything I was doing to try and make this trading for a living thing work - two years ago. Without so much of a safety net...

Was it a wise move to singularly focus on something you really like to do?

I know that I have a habit of becoming "slightly" obsessive about wanting to learn new skills. I have always been able to be learn new things very well, very what happened in this case?

What I didn't know at the time was that the market had its own cycle throughout the day. Anybody who has sat through trying to trade nearly 24hours a day will tell you that. I was starting to see this but it was a slow realization. You know why, I think it's because the promise of money trickling into your trading account is just so ever present. It's really hard to believe that you can't just go back into the trading station and just click in to get some pips.

In Bullet Trading, we are only looking to trade the first 4 hours of the London Session. (0800 - 1200 London or 0300EST - 0700EST). Why so specific?  The simple reason is  just that it's  the most volatile time slot for EURUSD. Which means that there's the highest probability to get a win if we are right and also the quickest one to know when you are wrong. Simple right? That's just how things are supposed to be. The key is really to take fewer trades and just manage them better.

My first week into Bullet Trading - the lesson hit home that if I wanted to be really serious about trading - and not just pay lip-service - I would have to make some changes to when I traded. Or I could simply just not start a trade when I didn't have the time.

The fun stuff continues below, and I learn a hard lesson that I really should make myself trade on specific hours in a day. Or not trade at all.

Here's what happened on that fateful day on April 4th:

Drama, and I Killed a Trade Early - Meng 040412

There is always a battle between - when I trade and the "other" things I have to do. Like pick up my kid from school after a field-trip. I know I should just not trade at all during these times but I am always tempted when I am sitting in front of the screen watching my set-up appear.

Today, I budgeted 1 hour from the start of the trade to the end. But I got the call to pick up the kid half hour early. So therein lies the drama!

The Setup and Entry

After drawing and yes, redrawing the "Wilson" lines, they looked good enough to go. I did notice that EURUSD had huge drop during the US session. Also the Asian Session made it drop another 40pips. So it looked like it might be in a down-trend for the day. I just make a mental and keep this at the back of my mind.

I thought I wasn't going to let the current trend influence me, but it did. So when the candle hit the 1.3181 entry line. I hesistated, on my planned entry for the long. I watched it go past, and end with what looked like a hammer. Then the little indecision inside candle appeared. That was my entry.

The next 2 candles were nail-crunching. But after that, I started to breathe easier.

How the Trade Ended

As you can see, it was like being in a roller-coaster ride for me.
I tried to capture what I was feeling on the trade. Mainly to remind myself when I look back that maybe I need to be more Zen about it.

I really desperately wanted to get out at point 4 (on chart) just before the PMI news release. I had an easy 10pips in the bag and really wanted to cash in. But I held on and endured the battering.

Point (6) was an interesting turn. I really did not expect it to turn around. But I didn't get stopped out yet.

Point (7) started to worry me only when I saw the 2 black candles after the white ones. So I killed it with +3pips when that longer black candle start to form - point (8).

I also did not want to lose the trade, after yesterday's win. Yes, that was chief on my mind. (This might be a bad and a hard habit to break)

I forgot that I have been telling myself the best way to approach trading was to trade without expectations. Meaning if I didn't attach so much to the outcome, I would probably perform better. This was something I learned recently from watching my kid practice piano.

Somehow, he played better when he wasn't expecting to play good or bad. I noticed that if he did really well and didn't make any mistakes on the first time he played a piece of music, the second time he played the same piece - it was riddled with mistakes. I would remind him to put himself back in Mode 1 and try to forget about trying to do good. Go figure! Right after I said that, it struck me that I should give myself that same advice.

Instead of trying to do good (aka win), I should just do. And leave the outcome to what it is. And then do it again.

Yup, working on myself is way tougher than implementing the system.

But tomorrow always comes, and you get to try again - as long as you still have enough bullets.

Happy Bullet Trading!
This post was first published on Bullet Traders Blog on on April 4th, 2012