After about 14 months since I quit trading, I thought I may make a comeback doing some minor swing paper trading the EUR/USD. I traded forex for about 12 months ending one year ago while finishing high school and entering my first year of college. I had about 60-80 live trades netting a 1.1% return. After that, I hit a drawdown limit, went back to paper trading and never became profitable again. I eventually realized I hated trading. I believe the main causes to be: 1. No life balance - no women, too much time at my computer, not healthy enough social life, too consumed by my own thoughts. 2. Information overload - I went from trading EUR/USD with just 1 hour, 30 min, 15 min, 5 min charts to having 12 timeframes including tick charts, trading 2-4 pairs, and adding pivots and RSI to my charts. I strongly believe the human mind is simple and needs few inputs, even only before they are mastered and can add more. 3. Emotional - certain times of greed and desperation. Especially in intraday trading when I set a large part of my time aside, and got greedy and stressed trying to catch every move and act quickly. I am a slow, smart, analytical and associative thinker. I believe the solution and best practice for the future is: Swing trade using the monthly, weekly, 3 day, and daily EUR/USD charts exclusively. This is simple, and solves all problems. My goal is never to trade for money, and trade only because I enjoy the challenge and the act in moderation. I will describe my upcoming system in the next post.
0 Wins, 0 Losses. Percentage: x% Cumulative Risk Premia: N/A Average Risk Premia return: My trading goal is to be patient and take only high-percentage trades, hopefully with expected returns on wins 2x or above the risk. For each trade, I will have an enter point and a stop. The difference in pips will be 1.00 risk points. I define my trading as risks earned and lost, as I believe nominal values and percentage values alone say nothing important. Risk and reward ratios and controls are king in my trading mind. Note: I have no trade targets, no trade end goals, no money goals. I am trading because something always lures me back. My next trade may be next week, or I may not come back again. Who knows.
0 Wins, 0 Losses. Percentage: x% Cumulative Risk Premia: N/A Average Risk Premia return 11/2 - Looking at a possible reversal here. I will not describe as I remember how easy it was to manipulate personal descriptions in order to serve standard human bias in trades. Also, I want to cut out the BS and extra time and effort involved in both trading and the journal/forum. Short. Trigger: 1.3613 Cancellation: 1.4051 until end of week Stop: 1.4051 Risk: 2 pips + 438 pips = 440 pips = 1.00 risk point
I was going to discuss my trading thoughts in writing, but am instead posting this as a reminder to myself of my dedication to my current philosophy to not do so. :X No trades at the moment.
0 Wins, 0 Losses. Percentage: x% Cumulative Risk Premia: N/A Average Risk Premia return Short. Trigger: 1.3430 Cancellation: 1.3670 or end of week Stop: 1.3581 Risk: 2 pips + 151 pips = 153 pips = 1.00 risk point No explanations. No questions.
0 Wins, 0 Losses. Percentage: x% Cumulative Risk Premia: N/A Average Risk Premia return: Short. Trigger: 1.3556 Cancellation: 1.3755 or no trigger by Wednesday 6 pm Stop: 1.3725 Risk: 2 pips + 169 pips = 171 pips = 1.00 risk point It just occurred to me that I should count the commission as a sunk cost and not a risk multiplier. It simultaneously occurred to me that I don't care.
Stop moved to 1.3635 Open risk = 0.59 risk points Can't make up my mind on trend and have urges to break rules. Now I remember why I enjoy this game.