Thursday, April 29, 2010
Black: April Review
Week 1: -121
Week 2: Rest (no trade)
Week 3: +37
Week 4: -62
This is some serious drawdown man. I cant imagine a scarier roller coaster ride than the equity graph plotted above - flat dead. conclusively, old habits are still kicking. I still cant accept a losing night, therefore leads to revenge trades and then leads to such catastrophe.
I dont whether anyone would agree with me, but after learning to play Texas Hold'em for some time, i find a little similarity in it with trading. there are bound to be risk, and you CAN'T WIN EVERY round. u are meant to fold. it is part of the game. when u get bad cards, u fold. u lose the initial "deposit" (what do they call it?) when u have bad cards in hand.. because base on probability, any pair greater than 2 or 5 (if those were the cards u were holding) you'd lose.
the winning part comes when u got pictures, or higher cards or pairs, best with an ace pairs. thats when chances are at your side and u can throw higher stake. still bound to lose, but probability are at your side (i wouldnt say chances because i feel chances are random). i never call super-high stakes when i dont have pairs to back me up, this is my poker rule, that should never have one single stake that kicks u out of the game.
Coming back to trading, this spells the Risk:Reward ratio. Accept the small loses, cuz the big one will cover them, all when chances are here. fundamentally, i failed to apply good risk:reward ratio, miserably.
If i can apply good risk:reward ratio in trading like playing poker, the question is, when is it the right time, or rather when do i know i'm holding an "ace pair"?
time to buck up. otherwise, this blog will sooner or later be renamed "101 things you should not do when trading forex".