Updated: Mar 13, 2019
Be willing to lose some battles to win the war.
Thank you to those who have been following my writing ever since.
For those who have just seen this blog, let me tell you about my Forex journey and what you may learn from it.
I self-studied Forex in November 2016 and burned my $100 account. Took formal classes a month after and was given an account to manage in August 2017. Probably became an airhead that my first 4 trades, using 1% risk each, draw me down to -4%. As part of the company’s risk management standards, company accounts must not reach -5% or else it will be frozen.
I ended up with just 1% to play with, which I still have to cut into 0.05%. This is to be able to take sensible number of trades instead of going all-in. The account is still alive and well. The caveat is, it’s taking time to rise above the drawdown.
Truly inconvenient. Add my current mistakes nowadays and you can imagine a longer vacation trip to this dark tunnel of life.
Heck, I’m still losing. And probably will never stop losing.
But the fact that the account is still up, I must be doing something that works.
Something that’s slightly less wrong.
Hope you learn from my losses:
Manage your Risks
Risk what you can afford to Lose.
This is probably the main reason why the prop is still running. I have determined that I am a trader and as a trader, I have to keep trading.
Read related article: Position Size: How much Risk to Take
In order to do that, I have to play with 0.05% risk per trade as of now. Had I signed up as a gambler, I would do ONE big trade believing it would win no matter what. Lucky if it wins. But, if it loses... uh, probably go home — and cry.
"It’s better to believe that you’re more likely to lose."
This is Forex, a trillion-dollar industry that thrives in uncertainty. It’s better to believe that you’re more likely to lose. The market does not care if the price is at resistance. If it wants to breakout and go higher, it will.
All you can do is be ready wherever the market will go and then catch it. Still be there in case it gets confused that at first, it thought it wants to go up but now wants to go down.
It does NOT ask all of your money anyway, just enough. Put in decent amount of risk, not all. Then, you’re in for the ride.
When you’re WRONG: Cut your Losses
Stop-loss exists for a Reason.
I implore you to also mind your stop-loss. Do not place trades without setting this. Forex may be the perfect work-life balance that you’d be able to do other things.
Understandably, you would not stare at your laptop 24/6. Therefore, put stop-loss in case the market suddenly has other plans too.
I’ve seen other traders simply deleting their on-going trades for various reasons. They may feel the trades are going nowhere or feel that the market is changing direction against them.
Well, it’s their thing.
I, on the other hand, stick to my plan. I’ve already set minimum risk on top of this anyway. So, once I’ve set the stop-loss, I leave it until the trade is finished at a loss or win.
When you’re Slightly less wrong/ RIGHT: Scale or Trail
You're gonna be Willing to lose with this.
In Forex, there is such thing as positive loss. It’s when the price has gone beyond your entry point and thus, yielding positive profit. Sometimes you see the potential of holding the position.
However, you also want some security. What you do is to also move your stop-loss beyond your entry point and follow the price as it moves more into your favor.
With this, you are sure to end up with some profit in case of sudden movement that’s against you. You lose the trade but you still gain money. It will just be a bonus if it moves all the way to your target profit and actually win!
It’s better to think that you’re more likely to lose. If so, how much would you risk? Risk the amount you’re at peace with. That when you give it away, like a tip to the barber or massage therapist, you would still go on with life feeling readier for the next destination.
Set your stop-loss. Stick to your plan. Why worry when you did NOT put all your money and can still trade next time? Or did you? Oh snap.
Positive loss exists. But this is the best kind of loss. I’m sure it’s also gonna be your favorite. Because in case your stop-loss gets hit, you still gain something. Otherwise, your trade is actually a win. You’d come out a champ either way.
Forex is very much mirroring life. We thought we already knew what to do but something always happens and put us into our place. We then learn from it. It’s never-ending. It’s a journey of ups and downs just like life. Enjoy every moment and just make lemonade wherever it takes you.
You may also share with us your journey via our social media. Tell us what you’ve experienced and what you’re currently facing regardless if you’re also in the dark tunnel or if you already got out and now feeling the sunshine!
Happy trading everyone!
@marilesaca || Trading Kitten :3
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