"Take Risks: If you win, you will be happy; if you lose, you will be wise. Nothing ventured, nothing gained."

Thursday, April 29, 2010

Black: April Review


Week 1: -121
Week 2: Rest (no trade)
Week 3: +37
Week 4: -62

Month: -146
Equity: -20%

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".

Black

13 comments:

FFXD said...

I hope you turn it around.

Black said...

Thanks, I will!!

FX said...

Having losing month sucks big time, I know, but what can you do. I believe that you are still figuring out the way for you to trade, style. Maybe I'm wrong, it's just a guess.

Black said...

Yes FX, I have been asking myself whether longer timeframe suits me better, because I find myself too reckless when I scalp, and also a bit intensive in terms of my lifestyle. I will try this approach starting from May, hope all goes well!

Risk Control Master said...

My suggestion is:
your size it too big, 150 pips = 20% meaning you can only take 750 pips lost and you are 0.

Normally you would stop trading totally or start a new account when it's 40% to 50% down, so you can only have 300 pips lost, and if you lost 30 pips a day, that means 10 day you are gone home and trading carrer is over or need a restart.

Try to lower your size to at least last you a little longer even if you are losing. The key is to invest in yourself, not the market. Once you grow yourself up, you can trade any market and your size will grow.

shiro said...

Well when you understand risk to reward, and when you are willing to take those small loses, you should be on your way to a great career. Do not give up. When you hit a wall like this learn from it and never repeat it again. Best advise i can give is take a break, refresh your mind and hit the market again. Remember
“Many of life's failures are people who did not realize how close they were to success when they gave up.”
- Thomas Alva Edison

Black said...

you got me there RCM. after reading your break-down i find myself in a dangerous position, ashamed that these didnt cross my mind in the first place.

i will lower my position-size from my next trade onwards, or else i will borrow FX's One-Trade-A-Day technique.

Black said...

thanks for encouragement shiro. risk to reward ratio is indeed one of the key thing im seriously missing. school stuff are coming my way in May (exams), and i will take it easy from there. hope your doing good too!

Syed Omar (Hilmy) said...

man i tanked in April too!
ps. i probably would do well playing poker vs trading :-P

Black said...

Hello Syed, sorry to hear that but no choice, let's hope for the better from May! Poker can be frustrating at times but I could get hold using simple system n rules to do well. In trading, I tink I needed some simple rules (nt holy grail system) but rules to tk a trade. I found a quote for my horoscope this morning at a temple (nt trying to be superstitious here but it kinda spells my problem): "once you are in control of yourself, you are in control of your money".
I need to fulfill the former in order to achieve the latter.

Black said...

I sound so naggy man

ANON said...

I agree with RCM. I have played 10's of thousands of poker hands and when I started, all I wanted to do was graduate from the $.01/.02 limit. It's so pitiful! (i thought). I would hit quads and could make at most $5. I could destroy my competition and make maybe $15 in a night. It didn't seem to make up for the time spent. So I pushed hard towards bigger limits...faster than my bankroll would permit. And I lost even though I may have been better than at least 60% of the competition. You can lose with pocket aces! Same thing in trading. An almost certain bet can go bad because of some unrelated terrorist activity or CEO death...etc. Who knows? Invest in your ability to trade and you'll slowly build confidence and a bankroll. I haven't trade for a while now (getting back to it this summer hopefully), but I remember 5% - 10% being a (still rather large) but good portion to wager on any trade. And I don't mean losing 5-10% of your money! I mean putting 5-10% of your money in a trade (most people would probably say 2-5%). So, if you like the eurusd, and your account is $10, then put $1 on it. I know that isn't much, but if you show yourself and others that you can consistently grow your account (and weather downturns and losses) good things will come.

I certainly wish I never wasted money on the higher tables. God damnit. And I still do it sometimes (just not as often). Similar things happen. I get screwed by an unlucky flop, turn, river...etc.

Best wishes! =D

Black said...

Precisely Anon, I don't why but your words make me felt better too. Indeed, u see I can squeeze 50 - 100 pips sometimes in a single swing trade, but then they are micro lots and what I pocket is simply what others can do in 5 - 10 pips. So I started increasing my position size, and tragedy happens. Nowadays I'm not too sure when is the right time to increase, phobic, it will be good enough if I just do it small size. You let me know I'm not alone in such situation :D

Anyway, poker n trading are gambling in another way, and although I am not a believer in Turns and Rivers, I too get screwed by it countless times! Thanks Anon, all the best to you too.

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