[Education] Falling In Love With The Wrong One Is Costly
Trade what you see, not what you feel.
Human are emotional creatures.
Believe it or not, I had attitude problems in the past. I get angry easily and this is a bad trait to be a trader.
In the beginning when I was still a noob, I would fund a live account without learning how to trade properly. I buy and sell base off moving average, RSI, MACD, and signals.
You guessed it, I burst plenty of accounts. Even if I win some trades, I would lose many more next. Whenever I lose a trade, I will feel angry. When I feel angry, can you guess what I do next? I revenge trade.
I don't believe that gold will not go higher. Let me take another long position.
Wait what the.. my trade got taken out again?
I think this is a stop hunt. Last try. This time the price will sure go higher.
"Opens another long position with larger lot size".
And you guessed it. I wiped out my account trying to catch a falling knife.
Ditch Your Emotions
Keep your feelings and emotions and aside when trading. The market doesn't care if you're happy or sad today. It will do what it wants to do. You can't control how the price move. Neither do I. Unless you have in control billions of dollars. If you do, why are you even reading this?
The problem is not with the market nor your trading strategy. The problem lies in YOU. You are the common factor here. All strategies can be profitable with the right execution, trade and risk management. But why can someone else be profitable but not you? It seems like everything is profitable until you put your own money in isn't it?
When you allow your emotions to take over, you won't be rationale. You will take actions based off your emotions.
If you feel doubt, you will look for confirmation not to take a trade.
If you feel angry, you will take revenge trades.
If you feel happy, you will feel like you won't lose your next trade and get complacent.
If you feel overconfident, you will risk more on your next trade.
If you feel fear, you will close your trade early for small profits.
If you feel tired, why the heck are you still on the chart?
Feelings are subjective and the market has no interest in it.
The Downward Spiral
Trading based off feeling is like gambling. Gambling belongs in a casino, not the financial market.
Let's say, you feel like the market is heading towards a recession. Would you blindly short the market if the price did not give you any confirmation?
This is the problem with you. You let emotions take over your decision making skills. This is why you cannot achieve profitability.
You might be in a trade, price goes against you and you’re in drawdown. You fear that the price will take you out. You cut your trade. Price reverse and hit your profit target.
You could have won the trade by following your plan, but you let your emotions take control of your decision.
When this happens too many times, your profitability decrease significantly. This makes a profitable strategy becomes unprofitable because your trade management sucks.
Not only will you lose money trading like this, but also precious time. How long did it take you to backtest that trading system? 1 day? 1 week?
How many times are you going to repeat this and waste even more time? Even if I give you the holy grail trading strategy, you will still not achieve profitability. It's not the system. It's you.
You will NOT achieve success in trading if you cannot master your emotions. Say goodbye to your financial freedom and a life of enjoyment. The only thing you can enjoy is the occasional small wins that you cut before the trade becomes a runner. You will still be unprofitable.
Follow Your Plan
If I have to summarize how I became profitable, it will be to follow your plan.
Trade what you see because only you know your own analysis. You've backtest enough to see how your edge will play out over a large number of trades. Do not let other people’s analysis interfere with your trades. They could be looking at the 1 minute timeframe, but you're trading on the 15 minute timeframe.
Price is fractal. If price is bullish on the 1 minute, it can be bearish on the 15 minute. Why do you want a second opinion on your trade?
When price shows you what it’s doing, react to it. Do not anticipate what the price will do and assume that price will do exactly that.
But Keeley, it’s so boring to wait for price to come back to my entry. I might miss the trade. I will take a short here because I’m expecting price to go lower and tap into my long order. People want to be in the action.
How many times do you expect price to make a bearish retracement and tap you into your long position? How many times did you actually open a short position and expect your long to get tapped in?
If price did not give you any confirmation, don't take the trade. The market will do what it wants to do. You can't expect the market to do exactly what you anticipate it to do.
Experience
When I was scalping on the seconds chart, I was loving every moment of it. I was constantly in a trade, catching all the movements. If I lose, it’s fine. I would always think that I have more opportunities coming soon. I would expect price to do what’s playing out in my mind.
This was not sustainable as I was taking too many trades within a short period of time. Even on a tight spread account, spread on lower timeframe accounts for a chunk of my risk management. Your trading psychology should be strong when scalping on the lower timeframe. Scalping a few pips per trade is doable but it's stressful.
I thought my trading psychology was good, until I experienced a losing streak. The more losses I experienced during the day, my psychology got affected more. This goes the same for losses in the same trading session. I’d do stupid things like risking more than normal, taking trades that I don’t usually take. I also take trades without confirmation. I used my feelings to trade as I expected price to play out what I wanted. Eventually, the win’s going to come right? This happened for a few weeks and I burst quite a few challenges. I lose quite a lot of motivation and called quits.
I’m quite a lazy person. I do not like to sit in front of my laptop stalking TSXV:SPDR S&P 500 ETF Trust(SPY)$ , TTESLA Motors(TSLA)$ or AAPPLE(AAPL)$ and trade for a few hours straight. I took a few weeks off from charts and reflected. I look deep into myself for answers.
I got the answers. I will try to be sufficient just by trading the higher timeframe. This way, I do not need to sit in front of my laptop for a few hours. I have the freedom to do what I like without sticking to my charts. This sits well with me too as this trading style fits my lifestyle. This way, I can avoid overtrading. I can easily see what I trade because each candle took 15 minutes to be completed. This kept my trading psychology at tip top condition.
Framework
PBJ Framework
No this is not peanut butter and jelly. Let's breakdown the following:
Plan: Know what to look out for. Know what to do before, during and after trading. Before entering a trade, know how much you’re risking. Know your entry signal, confirmation, and stop loss placement. Do you take partial profits? If yes, where will you take the profits? How much position will you take at each partial profit targets? If the price did not meet any of the condition, DO NOT take a trade.
Be in the moment: During the trade, know how you’re going to manage your trade. Do you shift your stop loss to breakeven? Do you take partial profits? Do you scale into your trade? Check your emotions. Are you feeling anxious? Angry? Confident? Tired? Excited? Your emotions have no say when you're trading.
Journal: After closing the trade, journal your trade. Write down how you feel before, during and after the trade. Write down how did you manage the trade. Give it a score from 1 - 5. This will help you in the future when you’re reviewing your trades.
When you have 100 trades recorded, you can finally do your analysis. Look at the times when you trade based on feeling. How do they play out? Are those trades profitable? Look for the common factor on all your winners and losers. The more information you record on your journal, the more analysis you can perform.
Achieving Profitability
Using the PBJ Framework, I see great improvement in my trading skills. I started to be more present and conscious of what I'm feeling.
I recorded almost everything. From my pre-trading ritual to post-trading ritual, I have all the data I need. I know how my emotions change throughout the trading session.
I know how often my edge will play out.
I know which days are profitable.
I know which trading sessions are profitable.
I know which months are profitable.
I know which are my most profitable pairs.
I find peace with losing. Why? I have all the data. I have evidence that my edge will be profitable if I take all the trades that appears in front of me.
I avoided trading on days and session where I have the least profitability. Not only did this increased my win ratio, but profitability too.
I was once unprofitable. Since then, I found consistency and manage to get funded with FTMO and The Funded Trader.
My first payout was small. It's only USD$200 on a $10,000 account. Even so, this is one big step ahead in my milestone. I was targeting one payout for 2023 and I've achieved this target in May. I got my second payout in June. My goal was to get $50,000 funding by end of this year, but I've already achieved it in May. I've now stretched my goal to $200,000 funded by end of this year.
The Ordinary Life
Life always begins with one step outside of your comfort zone. - Shannon L. Alder
To create an extraordinary life, take full responsibility for your actions and decisions. Stop blaming external factors, and focus on the things you can control. Take full responsibility of your trades, your mindset, and your emotions. If you can’t control what others think about you, then don’t. What are the things that you can control? How you treat yourself, your body and your mind. How you react to people and situations. How you think. What you do with your time. The people you choose to surround yourself with. How you treat others. Where you give your time, energy and attention. The contents that you consume.
When you’re trying to do the extraordinary, the ordinary will try to stop you from doing. People don’t like to see you succeed. They heard that entrepreneurship is hard and risky. You could lose a lot of money. They think that they have the best interest in you. They like to stay in the comfort zone and you should stay there with them. They tell you to be realistic. You are not someone incredible of great success.
Anything can happen, especially in the market. You can win with a wrong setup, and lose with the right setup. It’s up to you to take the first step. There will be a lot of what-ifs and negative scenarios in your head when you’re venturing into the unknown. The unknown is scary. But what if it turns out better than expected? What if everything should go well, actually went well? That’s something you can only find out if you take the first step.
Guidance
Trading is the easy part for many people. All trading strategies are profitable if you backtest them enough.
The hard part of trading is actually coming up with an exact trading plan and risk management system. Many of you drown when it comes to a trading plan. Not know where to start when creating one is also a very big issue.
You need to train and strengthen your psychology and discipline yourself. But you need a coach to guide you to the correct path.
This is why even world class athletes like Usain Bolt has a coach. A coach gives guidance and a holistic review on your
You can choose to grow alone. But having a coach an an accountability partner will help you achieve your goals faster. Imagine spending a year learning psychology and risk management, only to find out you were on the wrong track. If you had a coach and mentor, you would have saved yourself one year of trial and error. You could be profiting from the market so much earlier.
Remember, trading is not an easy hustle. It take years of hard work, losses and, breakeven before you can achieve consistent profitability.
Stay consistent. Stay safe. Success is just around the corner.
If you enjoy such content, feel free to click the like button and subscribe for more.
Let me know what are your thoughts and learning points in the comments below so others can learn from you too!
Please let me know what kind of topic you would like to read next :)
Happy weekend!
Human are emotional creatures.
Believe it or not, I had attitude problems in the past. I get angry easily and this is a bad trait to be a trader.
In the beginning when I was still a noob, I would fund a live account without learning how to trade properly. I buy and sell base off moving average, RSI, MACD, and signals.
You guessed it, I burst plenty of accounts. Even if I win some trades, I would lose many more next. Whenever I lose a trade, I will feel angry. When I feel angry, can you guess what I do next? I revenge trade.
I don't believe that gold will not go higher. Let me take another long position.
Wait what the.. my trade got taken out again?
I think this is a stop hunt. Last try. This time the price will sure go higher.
"Opens another long position with larger lot size".
And you guessed it. I wiped out my account trying to catch a falling knife.
Ditch Your Emotions
Keep your feelings and emotions and aside when trading. The market doesn't care if you're happy or sad today. It will do what it wants to do. You can't control how the price move. Neither do I. Unless you have in control billions of dollars. If you do, why are you even reading this?
The problem is not with the market nor your trading strategy. The problem lies in YOU. You are the common factor here. All strategies can be profitable with the right execution, trade and risk management. But why can someone else be profitable but not you? It seems like everything is profitable until you put your own money in isn't it?
When you allow your emotions to take over, you won't be rationale. You will take actions based off your emotions.
If you feel doubt, you will look for confirmation not to take a trade.
If you feel angry, you will take revenge trades.
If you feel happy, you will feel like you won't lose your next trade and get complacent.
If you feel overconfident, you will risk more on your next trade.
If you feel fear, you will close your trade early for small profits.
If you feel tired, why the heck are you still on the chart?
Feelings are subjective and the market has no interest in it.
The Downward Spiral
Trading based off feeling is like gambling. Gambling belongs in a casino, not the financial market.
Let's say, you feel like the market is heading towards a recession. Would you blindly short the market if the price did not give you any confirmation?
This is the problem with you. You let emotions take over your decision making skills. This is why you cannot achieve profitability.
You might be in a trade, price goes against you and you’re in drawdown. You fear that the price will take you out. You cut your trade. Price reverse and hit your profit target.
You could have won the trade by following your plan, but you let your emotions take control of your decision.
When this happens too many times, your profitability decrease significantly. This makes a profitable strategy becomes unprofitable because your trade management sucks.
Not only will you lose money trading like this, but also precious time. How long did it take you to backtest that trading system? 1 day? 1 week?
How many times are you going to repeat this and waste even more time? Even if I give you the holy grail trading strategy, you will still not achieve profitability. It's not the system. It's you.
You will NOT achieve success in trading if you cannot master your emotions. Say goodbye to your financial freedom and a life of enjoyment. The only thing you can enjoy is the occasional small wins that you cut before the trade becomes a runner. You will still be unprofitable.
Follow Your Plan
If I have to summarize how I became profitable, it will be to follow your plan.
Trade what you see because only you know your own analysis. You've backtest enough to see how your edge will play out over a large number of trades. Do not let other people’s analysis interfere with your trades. They could be looking at the 1 minute timeframe, but you're trading on the 15 minute timeframe.
Price is fractal. If price is bullish on the 1 minute, it can be bearish on the 15 minute. Why do you want a second opinion on your trade?
When price shows you what it’s doing, react to it. Do not anticipate what the price will do and assume that price will do exactly that.
But Keeley, it’s so boring to wait for price to come back to my entry. I might miss the trade. I will take a short here because I’m expecting price to go lower and tap into my long order. People want to be in the action.
How many times do you expect price to make a bearish retracement and tap you into your long position? How many times did you actually open a short position and expect your long to get tapped in?
If price did not give you any confirmation, don't take the trade. The market will do what it wants to do. You can't expect the market to do exactly what you anticipate it to do.
Experience
When I was scalping on the seconds chart, I was loving every moment of it. I was constantly in a trade, catching all the movements. If I lose, it’s fine. I would always think that I have more opportunities coming soon. I would expect price to do what’s playing out in my mind.
This was not sustainable as I was taking too many trades within a short period of time. Even on a tight spread account, spread on lower timeframe accounts for a chunk of my risk management. Your trading psychology should be strong when scalping on the lower timeframe. Scalping a few pips per trade is doable but it's stressful.
I thought my trading psychology was good, until I experienced a losing streak. The more losses I experienced during the day, my psychology got affected more. This goes the same for losses in the same trading session. I’d do stupid things like risking more than normal, taking trades that I don’t usually take. I also take trades without confirmation. I used my feelings to trade as I expected price to play out what I wanted. Eventually, the win’s going to come right? This happened for a few weeks and I burst quite a few challenges. I lose quite a lot of motivation and called quits.
I’m quite a lazy person. I do not like to sit in front of my laptop stalking TSXV:SPDR S&P 500 ETF Trust(SPY)$ , TTESLA Motors(TSLA)$ or AAPPLE(AAPL)$ and trade for a few hours straight. I took a few weeks off from charts and reflected. I look deep into myself for answers.
I got the answers. I will try to be sufficient just by trading the higher timeframe. This way, I do not need to sit in front of my laptop for a few hours. I have the freedom to do what I like without sticking to my charts. This sits well with me too as this trading style fits my lifestyle. This way, I can avoid overtrading. I can easily see what I trade because each candle took 15 minutes to be completed. This kept my trading psychology at tip top condition.
Framework
PBJ Framework
No this is not peanut butter and jelly. Let's breakdown the following:
Plan: Know what to look out for. Know what to do before, during and after trading. Before entering a trade, know how much you’re risking. Know your entry signal, confirmation, and stop loss placement. Do you take partial profits? If yes, where will you take the profits? How much position will you take at each partial profit targets? If the price did not meet any of the condition, DO NOT take a trade.
Be in the moment: During the trade, know how you’re going to manage your trade. Do you shift your stop loss to breakeven? Do you take partial profits? Do you scale into your trade? Check your emotions. Are you feeling anxious? Angry? Confident? Tired? Excited? Your emotions have no say when you're trading.
Journal: After closing the trade, journal your trade. Write down how you feel before, during and after the trade. Write down how did you manage the trade. Give it a score from 1 - 5. This will help you in the future when you’re reviewing your trades.
When you have 100 trades recorded, you can finally do your analysis. Look at the times when you trade based on feeling. How do they play out? Are those trades profitable? Look for the common factor on all your winners and losers. The more information you record on your journal, the more analysis you can perform.
Achieving Profitability
Using the PBJ Framework, I see great improvement in my trading skills. I started to be more present and conscious of what I'm feeling.
I recorded almost everything. From my pre-trading ritual to post-trading ritual, I have all the data I need. I know how my emotions change throughout the trading session.
I know how often my edge will play out.
I know which days are profitable.
I know which trading sessions are profitable.
I know which months are profitable.
I know which are my most profitable pairs.
I find peace with losing. Why? I have all the data. I have evidence that my edge will be profitable if I take all the trades that appears in front of me.
I avoided trading on days and session where I have the least profitability. Not only did this increased my win ratio, but profitability too.
I was once unprofitable. Since then, I found consistency and manage to get funded with FTMO and The Funded Trader.
My first payout was small. It's only USD$200 on a $10,000 account. Even so, this is one big step ahead in my milestone. I was targeting one payout for 2023 and I've achieved this target in May. I got my second payout in June. My goal was to get $50,000 funding by end of this year, but I've already achieved it in May. I've now stretched my goal to $200,000 funded by end of this year.
The Ordinary Life
Life always begins with one step outside of your comfort zone. - Shannon L. Alder
To create an extraordinary life, take full responsibility for your actions and decisions. Stop blaming external factors, and focus on the things you can control. Take full responsibility of your trades, your mindset, and your emotions. If you can’t control what others think about you, then don’t. What are the things that you can control? How you treat yourself, your body and your mind. How you react to people and situations. How you think. What you do with your time. The people you choose to surround yourself with. How you treat others. Where you give your time, energy and attention. The contents that you consume.
When you’re trying to do the extraordinary, the ordinary will try to stop you from doing. People don’t like to see you succeed. They heard that entrepreneurship is hard and risky. You could lose a lot of money. They think that they have the best interest in you. They like to stay in the comfort zone and you should stay there with them. They tell you to be realistic. You are not someone incredible of great success.
Anything can happen, especially in the market. You can win with a wrong setup, and lose with the right setup. It’s up to you to take the first step. There will be a lot of what-ifs and negative scenarios in your head when you’re venturing into the unknown. The unknown is scary. But what if it turns out better than expected? What if everything should go well, actually went well? That’s something you can only find out if you take the first step.
Guidance
Trading is the easy part for many people. All trading strategies are profitable if you backtest them enough.
The hard part of trading is actually coming up with an exact trading plan and risk management system. Many of you drown when it comes to a trading plan. Not know where to start when creating one is also a very big issue.
You need to train and strengthen your psychology and discipline yourself. But you need a coach to guide you to the correct path.
This is why even world class athletes like Usain Bolt has a coach. A coach gives guidance and a holistic review on your
You can choose to grow alone. But having a coach an an accountability partner will help you achieve your goals faster. Imagine spending a year learning psychology and risk management, only to find out you were on the wrong track. If you had a coach and mentor, you would have saved yourself one year of trial and error. You could be profiting from the market so much earlier.
Remember, trading is not an easy hustle. It take years of hard work, losses and, breakeven before you can achieve consistent profitability.
Stay consistent. Stay safe. Success is just around the corner.
If you enjoy such content, feel free to click the like button and subscribe for more.
Let me know what are your thoughts and learning points in the comments below so others can learn from you too!
Please let me know what kind of topic you would like to read next :)
Happy weekend!
Prop Firm Funded Trader
Find out more about me here: linktr.ee/kt_fx
Find out more about me here: linktr.ee/kt_fx
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