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Are you insane?

Discussion in 'General Forex Talk' started by Ricex, May 26, 2010.

  1. Ricex

    Ricex Sergeant

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    Somebody once said....

    "insanity is doing the same thing over and over again expecting different results"

    are you doing the same thing over and over again in your trading expecting that the next time will be different?

    So many novice traders are losing money it's likely that a lot of them are just repeating their mistakes and not learning and changing their way of trading.

    STOP!! you are just enforcing bad habits that will be extremely difficult to amend later on, and the longer you go on doing this the more difficult the task will become.

    First step in disrupting this repetitive pattern is to acknowledge it when it happens, this means becoming objectively aware of certain traits within your trading personality and possibly keeping a trade journal if you think it may help.

    As your awareness increases, your ability to control your bad habits also increases as you start to introduce more positive trading behavior over time.

    You won't change everything overnight, and anyway it's better to aim for small victories at the start, but little by little you can make improvements and try to stop the vicious circle of insane behavior.

    :p
     
  2. cowmadagan

    cowmadagan Sergeant

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    and also, don't be afraid to take demo breaks if you've lost a chunk of your account.

    Also, don't decide to trade (leveraged) forex full-time until you've been trading live for two years on basically a daily basis. The 'two year' number is the number I choose where I wouldn't immediately call you an idiot for even thinking about it...but I think much longer is better.
    Even longer term traders should be watching every day.
     
  3. Forexwatchman

    Forexwatchman Sergeant

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    I think that the trading journal is undervalued because it's just one more thing you have to do as a new trader and it seems a little silly. But the benefits are that it forces you to put into words what went on before, during, and after a trade. It smokes out those underling bad tendencies by forcing you to become aware of them. It also points out where your emotions are interfering with your technical analysis and force you to become objective, a key trait of successful traders.
    I've actually looked back over some trading journals from 2008 and I am embarrassed by my entries. I can't tell you how many trade set ups were just plain not valid although at the time I thought they were, and how little thought and strategy was actually involved. It shows how naive and inexperienced I was at a time when I thought the pieces were coming together for me. But it also provided me with a running log of what was going on each day so I wouldn't forget all about it over the weekend and thus repeat the same behaviors again. Each time I learned a lesson I made note of it and over time I learned enough lessons to become a confident trader. I no longer record a journal, but I would definitely recommend it to a serious newbie trader for their own good.
     
  4. RahmanSL

    RahmanSL Major

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    Keeping a journal of “Dos” and “Don’ts” in trading; yah?

    I have entered two entries very recently which does and can happen:

    1) Avoid trading inside a moving car as a bump on the road can cause you to accidentally execute a bad trade…and trying to steady finger to get out of that bad trade is not easy either.

    2) If you have to or want to sit at a public place to carry out trades, make sure it’s a single seat chair as a “leg shaking” person might sit next to you and cause vibration that (if your finger is closed enough to keyboard) can execute an order unintentionally.

    Oh yah, I have lots more entries in my journal, but the trick is to actually re-reading my notes…and finding that darn journey and/or scrape of papers is a remarkable feat by itself. But writing something down does helps to reinforced ones’ memory of events.
     
  5. Eric Alyea

    Eric Alyea Master Sergeant

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    #1. You can not say “are you insane” without drawing moth’s to the flame

    If you are a Newbie and "DON'T LOG Your trades" You F***ed up.:mad:

    “Practice makes Permanent NOT Perfect”:(

    In 41 years of Martial Arts “I” learned, “Practice makes Permanent NOT Perfect”.
    That mean’s if you practice a technique WRONG over and over, all you have done was imprinted a permanent mistake upon your technique.

    I just look down at the ground and kick right foot in the dirt twice for those that died stupid.

    I am a... used to be..., and an other of has been of getting old:
    Sniper Instructor
    Chief Flight Instructor (fixed wing & Helicopter) of a School
    I have Log book’s with every precious flight moment in the air of student’s and Instructor’s that I can call on from 30 yrs. (Name’s, numbers, & address’s)
    I remember EVERYONE I shot and have a log of it.
    If you are so flippant with your money as to not keep books, so be it with you and your self process TO FAIL

    You have to respect every trade as a living and dying thing under your Husbandry.
    Logged down and learned from scientifically for the betterment of the beneficial tribe.
    “As it is said so shall it be...” (As it is done,... or not done,,, so it shall... or not be)
    By not making a decision you... have MADE a decision!
    Figure that one out???

    I love trading demo, similarly, That is why I spend my time in a Dojo throwing human bodies on a mat, “I&Them” [the definition of AI-KI] practicing patting out (giving up to pain {in your terms strong vs weak, who is losing money}) with kid’s so they know to learn, “Do not hurt the body housing unit”, in your terms the bank account {know when to finacialy pat out, i.e. give up to live for another day}. Can you say money management??


    For me doing a demo live on the 10 & 5 second level, keeps me sharp (grabbing an advancing body and throwing the imbecile (unknowing to the mat). Backing out the view (drawing my lines of support and resistance on those and the higher levels, re-zooming in for the fight, waiting, finger on the trigger, finger off, safety on (curser below submit), then off (curser on submit), , close the trade window when it’s past time for the moment, opening another at a calculated lot value. I like it.
    I start out My morning with demo trade practice. looking a 5 min charts, back out to see what damage the “Troll/Ubber Banker’s” have left us commons to work with and go from there.
    I read the report’s, took me two years of reading report’s I didn’t understand to understand them.

    The main post I used to make to Newbie’s, was “Read the daily report’s”, even if you don’t understand them it will sink in some how.
    Darn Forex Nerd’s can’t understand what they say???

    I will edit this down tonight but the sun is going down and I am burning daylight ,,,I have to use my time on Earth at this moment.

    hey cowmad ain't heard from you much. Don't give up on us!!
     
    #5 Eric Alyea, May 26, 2010
    Last edited: May 26, 2010
  6. Pharaoh

    Pharaoh Colonel

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    Good one! :D

    Another good habit to get in to (and slap yourself silly if you every break this rule):

    Never widen a stoploss. You picked that SL for a reason. If you give it 5 more pips and it starts pushing close to your new SL, you'll just want to give it 5 or 10 more. If you are so convinced that price will turn, accept the loss, let it hit your SL, and wait for price action to turn around before re-entering. You set that SL for a reason. Stick to it.
     
  7. jcris522

    jcris522 Duellatorus Representative

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    All Great Advice

    I agree with everyone, each put in a vital piece and I thought I would add a few things that have turned my trading around in years past. One of the first things I learned was that you must have a trading partner or at least someone you can be accountable too. I have found that for some people, they can know not to move the stoploss or not to enter a trade that they have not researched, but they do it anyway. It seems easy to get off track or distracted in the forex and do things you know nothing about, with someone watching your trades or looking at your account statement, you are less prone to do those "dumb" things you know you shouldn't do. My partner and I would even go so far as to say, "okay that is enough for today, shut it down" when we had a really, really good day and wanted to keep going, in reality we wanted to give up some or all of what we just made, it's so easy to get greedy or over confident when you are doing good.

    Second and probably even more important than accountability is backtesting- going through ten years of historical data and seeing exactly how a trading method would have performed through the years. This can give you confidence as you see the same set up over and over and see it work over and over(or the opposite in which case you would move on to the next method). Trades will always go bad at some point or another and backtesting gave me the opportunity to figure out a way to get out of those bad trades without giving up a days or weeks worth of profit. Obviously something that worked in the past may not work in the future, but if you find something that overall works for 10 years of ups and downs, it will probably continue working.
     
  8. Music Man

    Music Man Corporal

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    Probably the hardest skill to acquire is the skill to lay out -- not to trade when there isn't a high-probability, big reward, low risk trade setup. The 2nd hardest skill is patience -- letting your trade mature into its full profit potential, without closing it out too soon.

    I'm still working on these, but I'm getting better (I hope). :)

    MM
     
  9. jcris522

    jcris522 Duellatorus Representative

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