Scary Trade

I accidentally visit a blog where the trader lost -1000pips in 3 days. And the amazing things is he/she never lost even once in June's trade. He/she collected 450++pips in June and loss 1000pips just in 3 days. And I believe he/she will add more loss if he still kept his open position until now...or being wiped out already. He/she shorted EUR since first of July. Ouch...

I used to be like that. In fact, maybe someday I will do it again. This is a lesson that winning ratio is nothing. It's even dangerous to us as traders. Imagine how you felt when losing all your monthly profit plus more in just 1 day? It's more painful than doing nothing. Your self-confidence, pride, were crushed in just one night. It's more painful than missing 1000 opportunities. I did it multple times. And it's really hurt. I couldn't sleep well, wanted to give up, and all negative emotions. And what happened to the next day? I couldn't trade like I used to be. Losses after losses mounted. Imagine how the chain reaction would happened. It all happened to me and I am sure it happened to most of us.

Bad things won't hurt you until it happened. I learnt from a great trader, my educator. that a STOP LIMIT is a dangerous thing. It may slipped out and won't get filled. I use the STOP LIMIT. Sometimes it slipped and I won't get fill. Luckily it didn't hurt me too much until this time. But bad things won't hurt until it happened. Prepare for the worst is essential for trading. Regular Stop Loss is not enough. Adding a hard Stop Loss is a very improtant to do. Seat belt and Air Bag. Here's what I learn in my 3 years experience of trading:
1. Do not do impulsive averaging down. I am not against averaging down if it's according to trading plan. But I believe most of retail traders averaging down because of :
a. Want to get out from the trade at least on Breakeven
b. Feel (???) the price is already cheap or expensive
None of them when trading said: Well, I enter in this spot, this is my trading zone. If the price goes against me until this spot, I will buy more, this is where my SL, etc. Amost every traders in the world want their entry at the best price on the first shot. Admit it. It's human nature. Here's the best things to do. Do enter at the signal, and get ready for every posibillity. Faked, Breakout, Pullback, Reversed, Double Faked, Triple Faked, Stopped out, etc.
2. Respect the Stop Loss, use the Air Bag instead only the seatbelt. Let's say your SL is 1% capital. Put hard stop at 2% capital. It's all about respect the Market.You'll never knew when you'll get slipped out, stunned and the price already eat 5% capital. This is what I'll do starting this Monday.
3. You can't go broke taking profit. Well, unless you have 100% winning ratio system which is impossible, you still can go broke. Even if you have 99% winning ratio, you still can go broke. The important thing is Risk-Reward Ratio. There's two things in trading that is so simple yet so difficult to do. Cut loss early, let profit run. You may see my trading at my previous posts. My winning ratio per trade less than 40%and still make profit 10% with no losing day this week. It can be done. Or you may want 100% winning ratio on June with 450++pips profit and losses 1000pips in 3 days on July. Your choice.
4. Realized profit isn't your money yet unless you quit trading forever. Open position may change, everybody knows. But realized profit also can change. Who knows the profit today will evaporate tomorrow. This is difficult to accept. We are trained to get paid on our job. Since we're born, we will get reward if we did something productive. While in trading, even if we do something right, we still and absolutely may lose money. Sometimes, market won't pay our work, even taking our money for our work. It's worst than slavery. It's like not getting paid for our job and being mugged when we got home, BY OUR OWN BOSS!!! Get used to it.
5. Have a system. This is your gem. Have a system, confidence, and go for it with patience and discipline. If you kept shooting blindly, how to analyze what's worked and what's not? Let's see I'm gona buy here cause I feel (???). Next time you want to know the reason why you enter, even when you keep a journal why you took the trade, because at that time you feel (???). Feeling cannot reviewed objectively. Market is too complex. It's better to review or backtest the system. It's more convenient and easier to do rather than collecting market profile data which is too complex even for the most experienced traders. It's your job as a trader finding a good system off hour market, and trade the system at market hour. Plan and execution. Even after you find a good system, execution still need a good work.
6, Day Trader advice... Do not have a bias, especially if we're still new at the market. Bias may go wrong. We are not a fortune teller to predict market movement. Trade what you see, not what you think. This is so true.

That's it for now. It's probably my longest posts yet. I put all my heart in this post. Please, I just want to help every traders I can reach that: Don't Do it recklessly. This is serious business. For those who never experience pain like me, be grateful cause you can learn from others' failure. For those who share the same experience, stop the mistakes. Everytime you enter the trade, remember how painful it is to broke the rule. how dangerous it is for your mental and physical health, your family and your financial statement. It takes only one day plus one mistake to wipe out your capital and left us wasted.

Wish you for the best,

De'Trader