The day that didn’t make sense

February 12, 2009 in Uncategorized

Today is the day that doesn’t make sense. 4/5 trades started in the green, short of 1-3 ticks, then turned and becomes 5/5 losing trades.

Why???

I notices this whenever I don’t start trading at the opening. When I reach home later, I kind of always mis-align my steps with the market’s steps. For example, I can have 1 late trade which could have ended up a winning trade and turn into a losing trade just because I entered too late. This losing trade will cause me to enter late for the next trade too and end up with another losing trade.

I think this is chain-effect which will affect every single trade u take after a losing trade. 1 losing trade will set off a series of losing trade, causing sizable damage to the trading account. This is the result of spotting the entry too late or missing the profit target by a small amount of ticks(1-3).

The 1st way to counter it is to monitor tightly for entry, which requires constantly guarding of the chart. Another way is to adjust the profit target accordingly. The 1st method allows me to relax once the trade is made, the second may allow me to prevent any losses at all, because I can exit on even 2-3 ticks profit, but would be devastated if the trade continues to give a 15-20 ticks return.

I think for now I test out method 1 first for 10 trading days, then see the results.