User Case Study: Suffering Big Losses!
We interpret and explain price moves in real-time, 24 hours a day. Our team of analysts produce text, video and audio commentary.
You understand the markets and trade with confidence.
Learn more at our website here: https://bit.ly/2HFykNd
------
Hello, everybody. For those of you that have been following my videos, you will know that I was doing really quite well, during the end of 2019.
In about two months time, I managed to get about 40% on my account.
Then during December, I took a couple weeks off just for the holidays. When I came back, I was really quite ambitious. So, if you remember I started November, October, I think it was with about $500, which I then grew to about $700. And then in January, I started like say, starting over with $6,000, which is 12 times more what I was trading in the beginning, and let's just say the mental shock of that was too much. And I was worrying so much about generating returns that I wasn't thinking so clearly. And I was worrying so much that I fell into the trading psychology trap.
Essentially having a solid trade setup, the price moves against you a little bit, you cut it short even though all the logic behind it is correct. Adding to a losing position because you're just kind of hoping that the market will turn around in your favor. And after a couple of losses, just changing your position size, pumping up the leverage, trying to crawl back out of the hole which essentially, if you're in that mindset, it only digs the hole deeper. So after a very stressful and very, let's say unhappy January, my returns on that portfolio look like this.
So anyways, what I did is I took the money out, took a deep breath, I decided to take about a week just to watch pretty much every single video and resource that I could find online on trading psychology.
Essentially take it as a hit but as a lesson. After stabilizing and educating myself, I came back and I started again with a smaller account, bigger than before but not as ambitious as in January. I started again with $1,000. It is the end of my first week trading with this new capital. I'm wearing red as you can see, because I'm celebrating Valentine's Day, and I'm closing the week with a profit of about 4.5%.
Let me walk you through it.
Tuesday was a good day because Monday, the Coronavirus reported a smaller number than what had been reported before. Essentially, this indicates that the coronavirus was, let's say reaching its peak because every day less, less and less reports.
So, going long on the Australian dollar versus the Yen during a risk on sentiment.
Now, Wednesday we had in the morning for me some data coming out of the US which was probably going to be the highest conviction trade opportunity for the day. Which was the CPI data as well as the employment reports. But as you can see, based on the screenshot right here, it was relatively mixed report. There wasn't any clear trading opportunity and the market really didn't react to this. So, I didn't place a trade.
Sometimes, simply staying put can be much more profitable than just trading because you want to place a trade.
Towards the end of the afternoon, I just put some tight stops and limits on my trades that I had placed because of course, anything can happen with risk sentiment while you're not watching.
So, I went and I was playing tennis and suddenly my phone starts getting notifications. So I go check and it says that all of my stops had been hit. So, of course I assume something must have happened. I go into my phone, about 15,000 new cases of Coronavirus reported when it had been going in a downtrend and was at about 2,000 per day.
15,000 is the biggest in a day by far to have ever happened, and it happened right as I was not paying attention. You see, there's this huge candle going down, down, down, down. And suddenly I got a notification of another by order that I had forgotten to delete before leaving the office.
So, of course, this is very bad. It activated by order which was completely against the sentiment, and very quickly that went down to the stop loss. So essentially, pretty big hit, which was unexpected, and it was dump. And it was my fault for not having deleted my pending order, which was risk dependent, while I was not here paying attention to what was happening to the market.
So, that was a mistake on my part and something that I will not do again in the future. Always remember to close your pending orders kids because they can and probably will screw you over. As a thought experiment, this is what my weekly result looks like right now, but this is what it would have looked like, had I not made that mistake. Not great, not terrible, definitely could have done better.
Thank you for watching.
----
If you find this content helpful, you’ll love Forex Source.
There’s a link below were you can learn more about it
https://bit.ly/2HFykNd
You understand the markets and trade with confidence.
Learn more at our website here: https://bit.ly/2HFykNd
------
Hello, everybody. For those of you that have been following my videos, you will know that I was doing really quite well, during the end of 2019.
In about two months time, I managed to get about 40% on my account.
Then during December, I took a couple weeks off just for the holidays. When I came back, I was really quite ambitious. So, if you remember I started November, October, I think it was with about $500, which I then grew to about $700. And then in January, I started like say, starting over with $6,000, which is 12 times more what I was trading in the beginning, and let's just say the mental shock of that was too much. And I was worrying so much about generating returns that I wasn't thinking so clearly. And I was worrying so much that I fell into the trading psychology trap.
Essentially having a solid trade setup, the price moves against you a little bit, you cut it short even though all the logic behind it is correct. Adding to a losing position because you're just kind of hoping that the market will turn around in your favor. And after a couple of losses, just changing your position size, pumping up the leverage, trying to crawl back out of the hole which essentially, if you're in that mindset, it only digs the hole deeper. So after a very stressful and very, let's say unhappy January, my returns on that portfolio look like this.
So anyways, what I did is I took the money out, took a deep breath, I decided to take about a week just to watch pretty much every single video and resource that I could find online on trading psychology.
Essentially take it as a hit but as a lesson. After stabilizing and educating myself, I came back and I started again with a smaller account, bigger than before but not as ambitious as in January. I started again with $1,000. It is the end of my first week trading with this new capital. I'm wearing red as you can see, because I'm celebrating Valentine's Day, and I'm closing the week with a profit of about 4.5%.
Let me walk you through it.
Tuesday was a good day because Monday, the Coronavirus reported a smaller number than what had been reported before. Essentially, this indicates that the coronavirus was, let's say reaching its peak because every day less, less and less reports.
So, going long on the Australian dollar versus the Yen during a risk on sentiment.
Now, Wednesday we had in the morning for me some data coming out of the US which was probably going to be the highest conviction trade opportunity for the day. Which was the CPI data as well as the employment reports. But as you can see, based on the screenshot right here, it was relatively mixed report. There wasn't any clear trading opportunity and the market really didn't react to this. So, I didn't place a trade.
Sometimes, simply staying put can be much more profitable than just trading because you want to place a trade.
Towards the end of the afternoon, I just put some tight stops and limits on my trades that I had placed because of course, anything can happen with risk sentiment while you're not watching.
So, I went and I was playing tennis and suddenly my phone starts getting notifications. So I go check and it says that all of my stops had been hit. So, of course I assume something must have happened. I go into my phone, about 15,000 new cases of Coronavirus reported when it had been going in a downtrend and was at about 2,000 per day.
15,000 is the biggest in a day by far to have ever happened, and it happened right as I was not paying attention. You see, there's this huge candle going down, down, down, down. And suddenly I got a notification of another by order that I had forgotten to delete before leaving the office.
So, of course, this is very bad. It activated by order which was completely against the sentiment, and very quickly that went down to the stop loss. So essentially, pretty big hit, which was unexpected, and it was dump. And it was my fault for not having deleted my pending order, which was risk dependent, while I was not here paying attention to what was happening to the market.
So, that was a mistake on my part and something that I will not do again in the future. Always remember to close your pending orders kids because they can and probably will screw you over. As a thought experiment, this is what my weekly result looks like right now, but this is what it would have looked like, had I not made that mistake. Not great, not terrible, definitely could have done better.
Thank you for watching.
----
If you find this content helpful, you’ll love Forex Source.
There’s a link below were you can learn more about it
https://bit.ly/2HFykNd
