I know I constantly talk about risk management and why it’s important. I believe one should never risk 50% of their account to only earn 25% or anything less than what your risking a matter of fact. Earlier this year I made a trader flow chart but after reflecting this week I realized that I was missing another question. The question would follow after “Calculate risk and setup position.” The question is “are you comfortable with the risk? if the answer is no then recalculate the risk and ask again. I realized knowing your risk and being comfortable with the risk are 2 different things.
“If you are too comfortable in a trade then you probably do not have enough size”
-GMan, ONE GOOD TRADE
This quote is kind of counter to what I am saying but I believe in it so much. Nothing is wrong with taking calculated risk as long as you realize the damage it can do and willing to setup the proper reward given the risk. My max risk for a day is 5% so I have the opportunity to make 15% if my risk:reward is on proper.
In addition, you also have to be willing to be have reasonable take profit. After reviewing a lot of my profitable trades I noticed that some never hit tp and I closed prematurely ruining my risk:reward ratio. over the long run this is no good because your SL will be hit and your wins will never out-weigh the losses. of the few that would hit Stop loss I need to determine if my TP is completely out of whack because I’m not trading the structure or if I’m forcing a specific risk:reward just so I can play the trade.
Anyway, trading this week begins on Wednesday and I’m so glad to be back.
Since I have a week and a half off I have had a lot of time to think & reflect about the long term & where I’d like to be as a trader and in my career. Truthfully I’d love to quit Continue reading “Work-Trade Life Balance”
Hey guys, so I’m back after losing control and also after a week long work trip. The journey must continue though. Finally completed my first full trading week. I got back on the 28th of February and proceeded to break many of my rules into Friday, March 8th
Journal entry from Friday March 8th below: Continue reading “More Trading, More Loses, More Risk, More Everything (back dated March 8th, 2018, NFP)”
So this post is pretty self explanatory. I went and got myself a risk manager. At the moment I am having trouble remaining disciplined and keeping the course. I dont think I am a bad trader per se but once I am on a constant streak I manage to get over confident and over leverage and ultimate blow weeks of profit because of emotions (THE TILT)
Currently, My risk managers role is to help me manage my risk by locking my account if I do not follow my Risk management rules which have been modified a bit. I think this is the best approach because I can’t seem to discipline myself and take a day off once my risk limit for the day/ week has been hit. You see in trading if you dont create rules you are bound to fail and do some reckless things. The worst part too is that sometimes you are rewarded for doing the wrong things and this creates bad habits.
For me the biggest thing is to maintain my lot limit and daily/weekly risk limit. This way I can really reduce my losses and focus on the process. Last friday, (February 9th, 2018) I was not suppose to trade at all. I even discussed the plan for friday with my risk manager, I said “I won’t be trading until next Tuesday” But what did do?
Continue reading “I got Risk Manager Now”
I did it again today. I put in 2 extra hours after work came home mad AF and just a little stressed and tired. What did I do next? Continue reading “Destruction once again”
Do I really know what makes me risk more than I should. I think vaguely it would be emotions, but which emotions exactly. I’d say mainly greed because I always forget this is a long term game. Last year this time I deposited 1K and lost it over a week period. 1000/5 trading days= –$200 a day roughly. Keep in mind last year I had no real risk management plan.
That’s a loss of more than 10% a day. If I took my time and managed my risk and actually gained that 1% a day for a year I would be laughing now with at least 10-15K and a ton more experience managing my risk and another step closer to leaving the 9-5 life. Right now the #1 goal is to be financially free then mentally and physically fit!
Remember this: Winning takes discipline, discipline comes from confidence and only a system in which you have confidence will you increase your chances of succeeding as a trader.
Today I officially blew up, -85% drawdown between Monday – Tuesday. (equity Curve Below) Continue reading “Self Destruction (again, Back dated December 18th, 2017)”
Some Risk Management Questions:
- Was the loss of money worth all the emotional pain and financial heartache?
- If you had the opportunity to do that trade or investment again, what would you do differently.
Tales of Losses
- What is the biggest loss you have personally taken in the market?
- What was your emotional experience during this event?
- What went through your head and heart during this event?
- Were you in emotional control or was your destructive ego in control?
- Was it worth it my dude?
- What did you learn from this experience? If nothing, Then this loss will probably repeat again in the future.
- What new disciplines have you now implemented when you invest or trade to protect yourself against losses
Continue reading “Q and A – Psychology (backed dated December 10th, 2017)”
I always ask myself this question & if the answer is NO I don’t know fucking why… The question is ” was I 100% disciplined?” I’ve consistently not been disciplined, but why? What am I after? I think only I know the answer to that so maybe I should be honest with myself…. Right now I lack the discipline to remain consistently profitable & follow my plan…. my emotions are also out of control & I need to take over that & realize that trading is a long term game.
- I need to practice self discipline in every aspect of life which will hopefully translate to my trading.
- Take less trades, manage risk & focus on quality trade setups.