8/2 – Detailed analysis of EURGBP trade

This morning I took a short trade on EURGBP.

It comprises two entries and exits – with the first entry being closed quickly after I considered it premature, and the second initially being monitored comfortably but eventually it getting the better off me and me not following my ‘trade management rules’.  It’s interesting because it’s a real example of how my emotions/psychology/feelings impact on my trading decisions and behaviour.

By the way, ‘Trade Management rules’ govern questions how and where to set stops and targets, when/if to move stops and when to close a trade immediately.

Below is the screenshot that’s going into my journal today 

There are a lot of notes on that chart – to save you from destroying your eyes in trying to read the detailed notes, I have outlined the main points below the screenshot.

436

 

  • Entering prematurely gave rise to frustrating and painful feelings
  • Entering on the valid setup (each trader defines ‘valid’ for him or herself) made me feel comfortable and helped me to manage the position properly
  • Even when all my rules are nicely set out (and clear) I still can have difficulty actually following them
  • Once again, not being able to bear the pain resulted in me closing the trade at a terrible price level
  • Trade Management is a lot easier if starting with a valid setup
  • I am actually able to feel good/bad/anxious/frustrated/scared/comfortable and be self-aware about it whilst I trade.

 

I believe that in order to progress/develop/grow as a trader, one needs to constantly review and learn from the completed trades.  Hence why I try to document every single trade.  Not every trade has a groundbreaking insight – but some do!

There are a tonne of psychology-related blog posts on the site here. Check them out at your leisure.

 

 

 

This entry was posted in Financial Markets 101, Psychology. Bookmark the permalink.

5 Responses to 8/2 – Detailed analysis of EURGBP trade

  1. I know you know all this already:
    You need to bet at the minimum bet size until you are able to trade your system flawlessly
    Min bet size depends on your broker, but I presume it is £1 per pip.
    If you still have problems following your system even at £1 per pip then switch to demo trading.
    When you are comfortable on demo switch back to £1 a point.. dropping back to demo again if the pnl is still affecting you.

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  2. Looks like torture to me. Forex is horrible, I’ve never heard of any billionaire fx traders,it just seems to me like a churn of newbies who last about 6 months. The acid test of any kind of method-results.
    I will not impart my methods but just look at the trades on the website. I’m currently waiting of the orange man to blow the world apart so I’m stuck with tiny trades. There’s no old bold traders, and I’m old

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    • You never heard of George Soros??, supposedly he made a $Billion in one day trading FX.
      Of course he already had billions when he did that.

      Discretionary Day trading the FX is really really hard. I will agree with that. Very few people can do it. I know i personally don’t have the emotional make up to do it. Only George can say if he thinks he has the emotional make up for this type of trading.

      There are other types of trading: swing trading, long term trading, automated day trading.
      These types of trading require different skills and are less emotional than day trading.
      But only less because you take less trades so your emotional ability is tested less often and on average you have a longer recovery time until the next setup.

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      • Soros KNEW the UK would be forced out of the ERM- so the £ would plummet that was a bet not a forex trade. That daily grind kind of trading- forget it, that’s death by a thousand cuts. It’s for talkers and dreamers,sorry to say.

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  3. Bet not a forex trade? That is a strange thing to say. Did he go down to the bookmakers to place this bet? Soros was trading based on his fundamental analysis. Most retail traders use Technical analysis, both are valid.

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