Month 2, Day 28 & 29 - 36-month forex trading challenge - trading mistakes.
Well the last 24 hours have ben interesting, I've made a couple of big mistakes that I'll highlight below, and last night the ship's foghorn sounded repeatedly due to dense fog (I filmed it for the STG FOREX TV YouTube channel). Apparently, despite being kitted out with radar, maritime protocol requires that a ship sounds its foghorn every two minutes when visibility is poor, which served to keep me awake!
Needless to say it was tough getting up this morning, but discipline is everything in trading, so I was up on time to perform my morning market analysis.
As an overview, the majority of pairs I look at are on the wrong side of their daily trend lines for me to take a short opportunity if a signal shows up. Some timely reversals (bearish to bullish mode) would be very welcome, but the market will only give me what I want when and if it's ready.
My daily relative strength analysis this morning has 7 out of 23 currency pairs classified as not determinable (ND). This means it's not clear where the predominant direction of travel has been over the last 24 hours.
Without clear signals and with a target I need to catch up on, the temptation is to take suboptimal trades just to have a position on. This is a big mistake and a temptation I'm acutely aware of, which I must consistently monitor. It could also help explain the errors I made below.
AUDNZD (T25S) >
This trade was a catalogue of disasters from the off. I entered this position on day 27 at 6pm using my FULL HOUSE strategy.
Mistake 1 – my entry was at the bottom of the daily trend (gold line), meaning a retracement was highly likely.
Mistake 2 – overnight the RBNZ was set to release its monetary policy statement. My rules clearly state that I should protect myself from the news and not trade it. Placing a trade ahead of such an important piece of news was effectively gambling, which is something very different to trading.
This was a gamble I lost, as the RBNZ surprised the market with a rate cut, which weakened the NZD across the board and cost me c.2% of my precious trading capital by the time I woke up.
I currently have three live trades, as follows, with the two of them currently taking some heat:
GBPUSD (T27S) >
I entered this trade at 6am today (day 29) on a FULL HOUSE strategy. Price is at the middle of the daily trend line and my stop placement sits above the consolidation range. On my sentiment indicator this is a strong sell with over 70% of retail traders having a long bias.
AUDUSD (T21S) >
I have already hit my initial target on this trade and subsequently added to the position, albeit I did this on the RBNZ reaction (this impacted AUD too) at the bottom of the daily trend line (see mistake 1 on AUDNZD above). Price has retraced, but is holding the 30 EMA for the moment. I'm now looking for a push down to continue the trend. Again, my sentiment indicator gives a strong sell with over 70% of retail traders having a long bias.
EURCHF (T26S) >
This trade was entered at the middle of the daily trend line, which is fine. It's effectively a continuation of my T23S EURCHF trade that was stopped out on a trailing stop. This is also a strong sell on my retail sentiment indicator.
Only time will tell whether these trades play out in line with my assessment of market conditions. I'm ready and prepared to cut my losses if things turn against me and stepped exit signals show up. It's never easy voluntarily taking a loss, but I know it's an important part of a winning trading approach.
Today and tomorrow are sea days on the cruise, as we sail back to Southampton. This means I won't be too far away from my charts and can monitor my positions closely.
Is it really possible to turn £50K into £1M? Over the next 36 months I'm going to find out by trading my personal account with full transparency.
Follow my 36-month challenge to turn £50K into £1M.
Read my blog here: https://stgforextvforexchallenge.blogspot.com
Subscribe on YouTube here: https://www.youtube.com/channel/UCyGySJ5IeDjq-DIJPU7nYvw
[Please note, the information presented is general educational material and does not constitute trading advice.
Trading foreign exchange (forex) on margin carries a high level of risk and may not be suitable for you or your circumstances.
Before trading forex you should investigate all of the risks, including the possibility that you could lose more than your initial investment.
It’s important to consider your investment objectives, level of experience and risk appetite. If in doubt seek advice from an independent financial advisor.]
Needless to say it was tough getting up this morning, but discipline is everything in trading, so I was up on time to perform my morning market analysis.
As an overview, the majority of pairs I look at are on the wrong side of their daily trend lines for me to take a short opportunity if a signal shows up. Some timely reversals (bearish to bullish mode) would be very welcome, but the market will only give me what I want when and if it's ready.
My daily relative strength analysis this morning has 7 out of 23 currency pairs classified as not determinable (ND). This means it's not clear where the predominant direction of travel has been over the last 24 hours.
Without clear signals and with a target I need to catch up on, the temptation is to take suboptimal trades just to have a position on. This is a big mistake and a temptation I'm acutely aware of, which I must consistently monitor. It could also help explain the errors I made below.
AUDNZD (T25S) >
This trade was a catalogue of disasters from the off. I entered this position on day 27 at 6pm using my FULL HOUSE strategy.
Mistake 1 – my entry was at the bottom of the daily trend (gold line), meaning a retracement was highly likely.Mistake 2 – overnight the RBNZ was set to release its monetary policy statement. My rules clearly state that I should protect myself from the news and not trade it. Placing a trade ahead of such an important piece of news was effectively gambling, which is something very different to trading.
This was a gamble I lost, as the RBNZ surprised the market with a rate cut, which weakened the NZD across the board and cost me c.2% of my precious trading capital by the time I woke up.
I currently have three live trades, as follows, with the two of them currently taking some heat:
GBPUSD (T27S) >
I entered this trade at 6am today (day 29) on a FULL HOUSE strategy. Price is at the middle of the daily trend line and my stop placement sits above the consolidation range. On my sentiment indicator this is a strong sell with over 70% of retail traders having a long bias.
I have already hit my initial target on this trade and subsequently added to the position, albeit I did this on the RBNZ reaction (this impacted AUD too) at the bottom of the daily trend line (see mistake 1 on AUDNZD above). Price has retraced, but is holding the 30 EMA for the moment. I'm now looking for a push down to continue the trend. Again, my sentiment indicator gives a strong sell with over 70% of retail traders having a long bias.
EURCHF (T26S) >
This trade was entered at the middle of the daily trend line, which is fine. It's effectively a continuation of my T23S EURCHF trade that was stopped out on a trailing stop. This is also a strong sell on my retail sentiment indicator.
Today and tomorrow are sea days on the cruise, as we sail back to Southampton. This means I won't be too far away from my charts and can monitor my positions closely.
*********
Is it really possible to turn £50K into £1M? Over the next 36 months I'm going to find out by trading my personal account with full transparency.
Follow my 36-month challenge to turn £50K into £1M.
Read my blog here: https://stgforextvforexchallenge.blogspot.com
Subscribe on YouTube here: https://www.youtube.com/channel/UCyGySJ5IeDjq-DIJPU7nYvw
[Please note, the information presented is general educational material and does not constitute trading advice.
Trading foreign exchange (forex) on margin carries a high level of risk and may not be suitable for you or your circumstances.
Before trading forex you should investigate all of the risks, including the possibility that you could lose more than your initial investment.
It’s important to consider your investment objectives, level of experience and risk appetite. If in doubt seek advice from an independent financial advisor.]
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