This week I have managed to cut my losses short. Where I am from we call it "taking an L". I am grateful to trade another day, but today, I'd like to share my experience of losing this trade, because I believe not only myself, but others a learn from all of the mistakes I made physically, and psychologically in this trade. I can come back, and analyze this later. So today, we are going to be the antagonist and be Negative Nick.
I have managed to learn how to break my trading plan.
1. A lesson I have learned this week is to "set a take profit" in a tighter risk-to-reward ratio.
This was a 1:3, but to where? See, the market fluctuates according to the session, as you can see during the USA session price skyrocketed approaching the take profit, but it was not yet reached. Price did exit our weekly demand zone, but it fell back into the zone.
2. Two, Proper risk management is mandatory.
Improper risk management has taught me about myself this week. I still have to learn when to get out. In this particular trade, I let the trade run to market close. And, when the price did fall below breakeven on Metatrader, I did not set my stop loss at breakeven. According to my plan, if the price falls back to my entry twice, set a break-even stop loss, OR get out. I did NOT set it, and greed kicked in. I also allowed the trade to continue to run, over the weekend, and had to pay a swap fee. Why did I do this? From previous experiences, I have managed to stop myself from more profitable trades, because I did not allow the price to have enough room to breathe, but with
NAS100USD
, the price moves like a big wave set for shore. but the results are in! Well unfortunately for me, I lost $7 in profits, due to rejection back to my entry-level, Either way, we set our stop loss and managed to cut our losses short today. I have officially shared my very first ever "losing" trade on the markets.
Learning how to trade has been the best decision I have ever made. Once I started taking this seriously, I am starting to witness the small results start to show: from learning price action, risk management, and fundamental analysis. There are so many elements to being a professional day trader, and I am here for it. The biggest lesson I learned from this trade, was to stop holding forex trades. Get in there, catch the wave, and get off at the shore, before you get swept back in the ocean!
In conclusion, I'd like to share my trading journal entry..
DID I FOLLOW MY PLAN?
No. I exercised poor risk management
Did not close the trade in session.
Did not Set my stop loss at breakeven.
WHAT DID I DO WELL?
1. Entry Was Marvelous
2. Traded the pair in the correct session.
3. Entered With The Trend.
WHAT CAN I DO BETTER?
1. Set A Take Profit In Metatrader
2. When Price Shows Trend Exhaustion, Get Out! (Close Manually)
3. Exit At Market Close
WHAT DID I LEARN?
1. Greed Will Decrease Ratio Of Success.
2. Trade In Session
3. Stop Holding Trades
DID I PREPARE PROPERLY?
NO, I entered a trade with a whimsical risk-to-reward ratio, I did not follow my trading plan rules, and I held the trade out of my session.
Next time I set my MUST set, my price target, calculate my risk to reward ratio, set a Take Profit, AND Stop Loss, double down, and wait for a confirmation. My entry was perfect, but my exit was atrocious.
Patch it up, and get back in there champ!
I have managed to learn how to break my trading plan.
1. A lesson I have learned this week is to "set a take profit" in a tighter risk-to-reward ratio.
This was a 1:3, but to where? See, the market fluctuates according to the session, as you can see during the USA session price skyrocketed approaching the take profit, but it was not yet reached. Price did exit our weekly demand zone, but it fell back into the zone.
2. Two, Proper risk management is mandatory.
Improper risk management has taught me about myself this week. I still have to learn when to get out. In this particular trade, I let the trade run to market close. And, when the price did fall below breakeven on Metatrader, I did not set my stop loss at breakeven. According to my plan, if the price falls back to my entry twice, set a break-even stop loss, OR get out. I did NOT set it, and greed kicked in. I also allowed the trade to continue to run, over the weekend, and had to pay a swap fee. Why did I do this? From previous experiences, I have managed to stop myself from more profitable trades, because I did not allow the price to have enough room to breathe, but with
NAS100USD
, the price moves like a big wave set for shore. but the results are in! Well unfortunately for me, I lost $7 in profits, due to rejection back to my entry-level, Either way, we set our stop loss and managed to cut our losses short today. I have officially shared my very first ever "losing" trade on the markets. Learning how to trade has been the best decision I have ever made. Once I started taking this seriously, I am starting to witness the small results start to show: from learning price action, risk management, and fundamental analysis. There are so many elements to being a professional day trader, and I am here for it. The biggest lesson I learned from this trade, was to stop holding forex trades. Get in there, catch the wave, and get off at the shore, before you get swept back in the ocean!
In conclusion, I'd like to share my trading journal entry..
DID I FOLLOW MY PLAN?
No. I exercised poor risk management
Did not close the trade in session.
Did not Set my stop loss at breakeven.
WHAT DID I DO WELL?
1. Entry Was Marvelous
2. Traded the pair in the correct session.
3. Entered With The Trend.
WHAT CAN I DO BETTER?
1. Set A Take Profit In Metatrader
2. When Price Shows Trend Exhaustion, Get Out! (Close Manually)
3. Exit At Market Close
WHAT DID I LEARN?
1. Greed Will Decrease Ratio Of Success.
2. Trade In Session
3. Stop Holding Trades
DID I PREPARE PROPERLY?
NO, I entered a trade with a whimsical risk-to-reward ratio, I did not follow my trading plan rules, and I held the trade out of my session.
Next time I set my MUST set, my price target, calculate my risk to reward ratio, set a Take Profit, AND Stop Loss, double down, and wait for a confirmation. My entry was perfect, but my exit was atrocious.
Patch it up, and get back in there champ!