Month 2, Day 32 - 36-month forex trading challenge - patience pays and trading book review.
And so another day begins on the 36-month forex trading challenge. It was a struggle getting up this morning and checking in with my charts, it's slow progress.
The temptation is to try and make something happen, but using the analogy of the ocean – I can't create the waves, instead my job is to ride them when they show up.
I was stopped out of my GBPUSD (T27S) trade yesterday on a trailing stop. I anticipated this bounce off the 10, 5 and 3-year low and had rolled my stop loss aggressively to lock in profit. This was a winning trade where I followed my rules and made money, so happy days.
It's possible we could now see bids turning up in force. At this major low, which also corresponds to the bottom of the weekly and daily trend lines, a TREND signal could be in play to buy this pair if the 10 EMA crosses above the 50 SMA. My sentiment indicator would also need to support a long trade, but at the moment it's signalling short.
My other trades in AUDUSD (T21S), EURCHF (T26S), EURAUD (T1L) and NZDCAD (T28S) have come under a bit of heat overnight, but there's nothing to do, only watch and wait. I can't force things and know from experience that patience ultimately pays.
I've just published the first video of week 6 on the STG FOREX TV YouTube channel. In addition to the trading I take in the sights of Rome, Cartagena and Gibraltar.
With not much happening today, I'm taking the opportunity to share insights from an excellent book I read on holiday. I really enjoy books profiling successful traders, much more than the technical books out there, many of which I've read.
Trading Mentors by Philip Teo, profiles a number of Asian traders, and gives some very helpful tips and advice on what makes them tick, and what sets them apart from others. It's an excellent read and reinforced many of the things I already know, but know I need to be consistently reminded of.
The book also references advice from the legendary Paul Tudor Jones – before you can make money you have to play good defence.
I'm just back from Jiu Jitsu to finish up this blog post and the markets have reacted heavily on news that additional US tariffs on China are being delayed. AUD has is being bid across all AUD pairs and my AUDUSD short could well be stopped out.
My EURAUD long has already been stopped out. I'd trailed my stop to entry (see below) and was taken out on the news frenzy.
It goes to show that the market can change on a dime, and having a protective stop loss in place should always be part of a winning strategy. It's frustrating as my EURAUD long was in profit, but the main thing is that I played good defence (see above). I may not have made any money on this trade, but I didn't lose any either.
I'm less and less bothered by the news nowadays. If the knee-jerk reaction goes against the predominant trend in any given currency pair then this often proves to be a new and better opportunity to get in. Trading the news is a dangerous game to play and my job at all times is to protect myself from it as best I can.
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.]
The temptation is to try and make something happen, but using the analogy of the ocean – I can't create the waves, instead my job is to ride them when they show up.
I was stopped out of my GBPUSD (T27S) trade yesterday on a trailing stop. I anticipated this bounce off the 10, 5 and 3-year low and had rolled my stop loss aggressively to lock in profit. This was a winning trade where I followed my rules and made money, so happy days.
My other trades in AUDUSD (T21S), EURCHF (T26S), EURAUD (T1L) and NZDCAD (T28S) have come under a bit of heat overnight, but there's nothing to do, only watch and wait. I can't force things and know from experience that patience ultimately pays.
I've just published the first video of week 6 on the STG FOREX TV YouTube channel. In addition to the trading I take in the sights of Rome, Cartagena and Gibraltar.
With not much happening today, I'm taking the opportunity to share insights from an excellent book I read on holiday. I really enjoy books profiling successful traders, much more than the technical books out there, many of which I've read.
Trading Mentors by Philip Teo, profiles a number of Asian traders, and gives some very helpful tips and advice on what makes them tick, and what sets them apart from others. It's an excellent read and reinforced many of the things I already know, but know I need to be consistently reminded of.
- You must have a trading system that has a statistical edge in the markets.
- You must manage your money well and only risk a small percentage of capital on each trade.
- You will make a lot of money from trading, only if you can trade without emotions and execute your trading plan without deviation.
- If you have a losing streak don't be upset. If you have a winning streak don't be happy.
- You have to accept the risk. This means being comfortable with a trade that initially goes against you.
- The outcome of any individual trade is random, but the result from a number of trades over a period of time is not random. This is where your edge and skills play out.
- Technical analysis improves your edge over a large number of trades. It's not meant to ensure a win in any individual trade.
- Too much analysis is not the way. Excessive analysis works only for the educators (the people trying to sell you their trading courses, but have probably never traded their own accounts).
- Don't attach too much importance to any individual trade or you will become apprehensive.
- Trading is about having an edge over many trades, so you need money management to survive periods of drawdown.
- One of the biggest challenges for the majority of traders is the ability to cut losses.
- A trading plan is essential to remove as much emotion as possible.
- You can't control the market, but you can control yourself.
- Never add to losing trades – pyramid your winning trades instead.
- If a trade is working for you, you should seek risk. If your trades are going against you, it's time to become risk averse.
- A good trading day is one where you follow your rules and manage your risk well – whether you make or lose money is irrelevant.
- If you can survive, you'll ultimately thrive and the money will come.
- Successful trading is about principles – avoid the temptation of shiny new ideas.
- Good traders are always talking about being disciplined.
- Develop a trading system with a positive edge and expectancy.
- Document a trading plan to exploit your edge. This tells you what you will and will not do in the market.
- Execute and follow your plan with discipline. Over time, review and fine-tune your trading plan. [Keep in mind that there is a big difference between fine-tuning, and ditching your system in favour of something new (point 18 above).]
The book also references advice from the legendary Paul Tudor Jones – before you can make money you have to play good defence.
I'm just back from Jiu Jitsu to finish up this blog post and the markets have reacted heavily on news that additional US tariffs on China are being delayed. AUD has is being bid across all AUD pairs and my AUDUSD short could well be stopped out.
My EURAUD long has already been stopped out. I'd trailed my stop to entry (see below) and was taken out on the news frenzy.
It goes to show that the market can change on a dime, and having a protective stop loss in place should always be part of a winning strategy. It's frustrating as my EURAUD long was in profit, but the main thing is that I played good defence (see above). I may not have made any money on this trade, but I didn't lose any either.
I'm less and less bothered by the news nowadays. If the knee-jerk reaction goes against the predominant trend in any given currency pair then this often proves to be a new and better opportunity to get in. Trading the news is a dangerous game to play and my job at all times is to protect myself from it as best I can.
*********
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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