Reflection on Trading

Reflection when Directional Bias Scalping / Swinger 

It has been a while since I do reflection post. I believe that a trader grow from reflection and through reflections, they will understand themselves better. I'm back to FX and have been trading very small TF recently and using options to play the longer TF. So far so good! close to 90% winning rate! But I got to be on my toes as I always fk it up when I become profitable and decided to risk more. I aim to average about 85 winning%. I know a huge loss will definitely screw me up and it will happen and almost happen today!!! 

Some reflection when using the new methodology.(Scalping with a directional bias for short term and options for long term) 

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1) What differentiates a successful trader and one that is not successful? To have green pips everyday!!!! I looked back my old account when the pips are positive but the account value are negative? WHY? Because I overleverage and wasn't consistent on my lots size. While you maybe consistent on your products, a margin of error wouldn't have hurt you that much unless you decide to over-leverage or trade something that is more than your usual trading size!! How many times have this happened? I busted 2 FX accounts and both are green in pips. I could still remember the trauma when these huge losses are incurred as it affected me and my confidence in trading. Putting the losses of the trade aside, I would have been in a much control position if I have stick to my trading plan/size. Thus, in 2016, I will be using the same lot size every time!!! without fail! I Promise!! I believe this is my greatest hurdle - Risk management. 

2)Understanding the products that really suit them or even the behavior ofFX pairing that will suit the trader's personality the most. You will need to find different products to suit your personality. I dare to say most people are not patience with trading, they want to see instant result. However, if you are patience, use different products to your advantage. I came to realize that I am not the patient trader and in 2016, I am going to use option to trade long term targets for FX. When I mean long term I mean up to a month. Why is that so? Because a option has an expiry. Whether you are doing a spread or buying plain vanilla call or put, there is an expiry which you had already paid the premium for? How many times did you get the trade direction right but you fail to earn any penny from that trade because of margin stop out/stop loss? I believe that all traders have this guilt. These are trades that ought to be minimize. From the first bull spread that I did, I pretty much believe that an option strategy will make the trader mindset more focus and not swayed. You will be tempted to take partial profits/selling and then attempt to buy back at lower prices when you are holding a position. However, by paying the premium upfront, you will have lesser tendency, at least it curbs me. Also, buying premium do not cause margin. THUS, you will be frigging safe from margin stop out and not have to worry about it! 

3)Gambling or trading mindset? In my opinion, a gambler who walks away from the Casino money are either 1) Damn bloody lucky because they fail to lose,2) They simply get out from the Casino when they win money! The longer you stay in the Casino, the higher probability you will turn your winnings into losing. In Chinese, we have a saying called " 10 gamblers, 9 losers". Why do you trade? If it is for the thrill, then you shouldn't be trading. Trading is to make positive profit! There is no enjoyment but a monotonous set of drill that you abide to and then keep your fingers cross. Set a realistic monetary target be it on a daily basis or weekly basis that you want to earn from the market and works towards it. Do not expect to hit a home run. Yes, that trade could be the trade of the year but if you don't take profit and hits your stop loss, who is the stupid one? You have to understand that these perfect trade do not exist (maybe 0.01%, even then, refer to 2 and you shld be using option or stock for it and not marginable products like CFD/FX) This is the reason why now I am trading scalping my FX. Assuming it is a ranging chart, a scalper would have taken profit 2-3 times in an hour before the swing trader is able to take profit the next day. Having said that, if by market forces that the swing trade fall and hit your stop loss then, you would have wasted the opportunity for holding on to that trade for the last few day. When you open a position, and within that hour, 50% of the time, the position moves within X% of your entry, however, 25% of the time, the position will move within 2X% of your entry,12.5% of the time, the position will move 3X% of your entry. Just like a normal distribution graph with the entry @ 0. And if you are spot on in catching the direction of the trade, your trade will naturally spend more time in a positive territory. Then, that is when how greedy/consistent you are to take money from the trade. Easier said than done though. Because every want to hit the trade of the year. However, you need to realize that the probability (Trade of the year) < 0.001. Thus, if you can train yourself to consistently take money off the table, big or small, I think you are on the very right track!