Journal of a n00b trader.... Hey!.....At least I know it.

Stupid things I do....

2012-02-10T20:15:00.000-08:00

- Add to losing positions
- Don't use stop losses
- Ride out the trend
- Keeping adding funds to the trading account
- Trade positions too large for the amount of funds in the account.

Why don't I use stop-losses?

2012-02-10T20:13:00.000-08:00

For some reason I hate using stop-losses. It might be because I'm stubborn and idealogical and believe in the long-term theory for the currency pair I'm trading so much that I refuse to see the short-term dynamics.

I need to forget about what I believe in and just see what the market is doing at that point in time. Easier said than done.

Also, I read somewhere that if you have stop-losses then your platform provider can potentially try to game it so that your stops are hit and wiped out. Not sure how true this is given that you are effectively trading a spot market. This makes me a tad hesitant to use them.

I am very focused on riding out the trends going against my trade as eventually they will turn. This is probably not the way to go. I find that I am adding more and more capital to the position and adding to the losing position to average up/down. Lot's of stress.

Recent Trades (as 11/02/2012)

2012-02-10T18:48:00.000-08:00

The yellow arrow indicates positions which were closed out yesterday. At that time the open positions were approximately -6 AUDUSD mini at an average of $1.0801. The total profit at that time was approximately $600.00. The AUDUSD had fallen more than 1.00% that day from over $1.0801 to as low as $1.06812.

The AUDUSD had been in a trend starting around 11am Sydney AUS time. By about 7pm it hit a low of $1.06812 . Looking at the trend I was going to go short even more if it broke through $1.068 and stayed there. However, it then started hovering between $1.065 and $1.069, then went above $1.069, and started hovering about $1.069 and $1.070. As soon as it broke through $1.070 I closed out the position.

However, prior to that, from about 7:30pm I had been opening (short AUDUSD) and closing various positions in preparation of a fall below $1.068. None of these worked and I ended up closing them with a an overall total loss of about $115.

Currently still down $2,000 from the original $11,000 deposited into the trading account. This is even after the booked $600 profit.

I closed the platform and logged out after closing all the positions.

Later, about 11pm sydney time, I logged back in and saw that AUDUSD was below $1.068. I immediately -2 positions.

Lesson

??Just because a down-trend has been broken does not mean that an uptrend is about to start??

Thinking at the time

The account was down $2,500 from $11,000. The $600 profit looked very attractive. To be honest I didn't want to keep the positions open over the weekend to be thinking about them (now I'm typing this :-).

Even though I expect the AUDUSD to track lower, I decided to book the profit and close out the position?!?!?

11 Feb 2012 - Open Positions

2012-02-10T18:25:00.000-08:00

	Contract Size	Value of one Pip		Open Positions	Open At	Latest		Profit/Loss
Spot FX (mini) AUDUSD	$10,000.00	$1 USD		-2	$1.067055	$1.067900		-$16.90

Intro

2012-02-10T18:16:00.000-08:00

Just starting out in trading.

Have:

- Excellent understanding of economics and finance, risk and return. Work in financial services. Track market events on a daily basis. Understand bonds, shares and derivatives.
- Able to read and understand finance lit including journal papers etc.
- Access to funds.

Don't have:

- Any understanding of tech analysis
- Any experience of short-term market dynamics

Weaknesses
- Very strong long-term views about global markets economics and politics.
- 'Ideological' - above long-term views tend to impact on short-term judgement.

Platform

- IG Markets

Trading Experience So Far
Between Feb 2011 and July 2011 traded variety of forex and commodities. Ended up by about $135.00 after taking on massive amounts of risk... was down $35,000 at one stage. As soon as account broke even or was slightly up ($135) closed all positions out and stopped trading until Jan 2012.

Now back into trading. Trying to learn as much as possible.

So far total capital used has been $11,000 with the biggest open position at one stage being short AUDUSD $300,000.

So far lost $2,000.