Friday, April 18, 2008

LEVERAGE kills...

Just a quick reminder to myself why my last 3 weeks trading was a mere disaster ::

I somewhat unexpectedly started trading maynly in standard 100k lots and this makes the profits huge but so are the losses...

the P/L is swinging around like crazy and my trading is more like gambling and this adds immense pressure on my decision making and self -esteem as this should be a sustainable business not a means to entertain myself at the cost of huge losses or crazy swings from big gains to total loss...

I made a few killings with 7 to 10 standard lots but also I suffer great setbacks and this seriously damages my perfornace so I pledge before myself to stop the irrational behavious and get back to business as usual.

Friday, April 4, 2008

Purgatory - March 31 - April 4, 2008

I feel I've been in the Purgatory this whole week.

Fixed on my Opinion and on imaginery things to do in future I neglected the present developments.

Since March 31 till I lost the account equity yesterday in the 1 mil trade I have lost my flexibility, correct judgement and actually I lost my life to my poor EGO that clouded my mind.

The thing is that I WANTED things to happen >>> worse, I FORCED things to happen >>> went the whole length and pushed to the limit just to fail --- and the whole process was so tangible - I knew thigns would happen this way and didn't act to stop ot correct.

All the time I had my exits and good profits but failed to take them - locked myself in the DESIRE to make a huge bet and even larger profit.

MONEY ain't nothing to talk about here as they really don't matter. It's the EGO that blinds the soul and clouds the mind - it makes you act wrong and suffer the pain.

So whatever you make money or not, there is far more to life than this. It's the right balance that is so hard to achieve -- even harder to maintain.

There is no easy way!

Thursday, April 3, 2008

Lessons to be learned... Humbled by the market!

Yes - I did my first 1 mil trade - I actually lost the account today -- pretty stupid as I had almost made it to like 75% of the initial equity from 30% on the previous day.
A few major things to remeber and learn for future reference:
1. TREND FOLLOWING - well, not an easy job.. need to work more on a systematic approach and actually more testing before risking the equity.
2. GREED / LEVERAGE -- needless to say the position size was times bigger than my equity and also a major factor to the demise of this trade.
3. LEVERAGE / FLEXIBILITY --- this might actually be the most important point as I had several times seen a monster profit and wasn't unable to make myself to take profit.
Then on the other way I was unable to cut loss where I would normally would.
4. PSYCHOLOGICALLY - I was a failure as I wasn't able to act right and in timely manner to adjust position size and to take advantage of the intraday directional movements.
5. DAILY RANGE -- here was a major break today as I actually realised the use of the range. It is still a new part of the intraday analytic tools.
Well wasn't a good experience at all.
However it was something I felt unevitable -- just a violent and painful reminder of the market forces and the need to adjust one's trading to the market.
Street smarts: "Lose your opinion - not your money"
I was so eager to earn a great profit with a huge position -- and I had numerous possible exits but blew them all -- can't think of a nice rationale out of this - I just think I had a too good time and it was due to get back on me and show me that there are NO EASY WAYS in life.

Wednesday, April 2, 2008

1 mio trade

my first 1 mio notional value short GBPUSD was a failure.

I did 3 or 4 different trades on Monday, 31.03.2008, where I had profit in each of the trades but stayed too long and at the end had a substantial loss.

Then I shorted GBPUSD at 1.9860 > it hi a low of 1.9740 but I had the idea of using the measured move concept: AB=CD (2.04 > 1.97 :: 2.02 > 1.95) . The notional value was 7 standard lots.

Next day - Tuesday 1.04.2008 was a fools game again - it went against me and I shorted 1 more standard lot at 1.9859. Now the position was 8 X 100k lots.

Wednesday - the day of reckonging - day started around the lows 1.9750... I didn't do nothing all day but watched it hit new highs around 1.9890...

What a stupid act. WHen it first probed 1.9800 I also shorted 2 more standard lots so I just wanted to do my first 1 mio trade no matter how much it would cost me.

Now I cut my position to only 300k and will look to withstand the move with what's left in the account -- right now onle about 30% of the starting equity..

That's how greed and selfishness take revenge over you. Once you lose control of yourself your inner enemy will just creep out and take you by surprise. I knew it was going to happen and just watched it inflict pain over me. How strange is that I did this damage to myself in full sense. Pity.