Trading rules

In order to prevent from committing the same mistakes again and again, I am going to set a few preliminary rules to control my own emotions..

1. Set a max monthly draw down.. (Ranging from 5% - 15%). Stop trading for month once hit!

2. Set a max amount of trades everyday .. (3 - 5)

3. No market orders.. Only stop or limit orders allowed.

4. Trade during market active hours (i.e Eur/Usd [8pm - 12pm])

5. Don't trade before major news release.. Wait till things stabilize (i.e 1 hour after release)

6. Trade 1hr and 4hr time frame. Use 15 min as a gauge of noise.. Also take note of average daily trading range.

7 . Plan a max amount of loss per trade.

Crashed out.. Account blown again~

I am so frustrated and angry with myself.. Again and again, i blown my account due to excessive greed.. I am so below the water now, with a negative net equity (-43%) .. This is so demoralizing but yet I know I must do something to improve my own trading traits...

Instead of putting in more money now to my trading account, I think I will deleverage (reduce my debt) first.. This is to prevent me from doing more foolish things again! I grew my account by volatility and also blown it with volatility.. Maybe this is because I never keep my position size within reason (I overleverage it) and also chasing my losses.

To start everything from scratch is really not easy but I will persevere because I believe one day I will overcome my own foolishness to become a better trader. I need to have a better risk management system in place to prevent me from being rash.. I guess that is the first thing I need to do!

I think I am still not up to standard to manage money therefore I might consider returning a portion and at the same time, growing my account slowly from small..

P.S : Looking on hindsight, the over leveraged trade which I made was a profit at night time.. Im feeling lots of regrets! A 15k loss wld be avoided with an additional 15k profit.. :(

22 July 2011

Trade details
Instrument : EUR/USD
Type : Limit
Direction : Sell
Size : 15
Entry : 1.43770
Stop : 1.44480 (71 pips)
Limit : 1.42350 (142 pips)
Max loss : 1065 USD
Trade style : Multi Entry, Multi Exit (Hybrid of ranging and trending market)

Thoughts
This trade is interlinked to another trade . It was placed in advanced when I placed a market order earlier.. This is a stop order because I only want this trade to be executed if it only moves in my direction. A limit (142 pips) is set because judging from the charts, it might be a ranging or trending market so I want to protect my profit and also at the same time, letting it ride which is possible with my other trade.

The stop for this trade will be set to b/e if target is not hit within a day.

22 July 2011

Environment
- Greece bailout deal penned
- Bullish trade prev day. Surged close to 1.3%
- 4hr chart : Trending down

Trade details
Instrument : EUR/USD
Type : Market
Direction : Sell
Size : 15
Entry : 1.44297
Stop : 1.44797 (50 pips)
Limit : Trail (Distance : 50 Step : 10)
Max loss : 750 USD
Trade style : Multi Entry, Multi Exit (Hybrid of ranging and trending market)

Thoughts
I placed the trade near the intra day high, executing at market order. The short term (10 mins, 1 hr) chart seems to be trending up though mid term (4hr) is trending down so judging the uncertainty, I have placed a sell order at market price with a trailing stop (10 Step, 50 distance) since it is trading near day high (good risk reward opportunity)... Stop will move 10 pip whenever the trade moves 50 pips (1X Risk) in my favor.. The reason I set 10 pips is because this is to give the trade more room to move...

Rather than placing 2 trades at one time, I have placed another trade at 1.44297 (day low + 5 pips) with a profit target . This is because I am uncertain about the trade therefore if it moves against me, my loss will be minimized otherwise, if my trade is executed, my profit can be maximized...