No guesses as to what happened to the last account.
It's the pattern, and one that I am determined to break.
But I wont be breaking bank accounts to do it. Rather I've set myself and annual budget for trying this thing. Had one year with a profit an the next year with a loss. If I look back and honestly assess what I think happened with the profit year, I'd say I got lucky and jumped ship before I trashed the account again. I have a tendency to do some of the classic "don'ts" when it comes to trading.
- don't trade without a stop - the problem here is obvious, if you don't define and limit the losses then you're effectively saying that a margin stop out is your stop, i.e. your entire balance (depends on wher the broker has their server side stop placed).
- don't trade short-time frame - this comes with a caveat, if you can't sit there and pay attention to what's happening. I've found that I don't operate fast enough or instinctively enough to trade the shorter frames. I'm not saying that it can't be done, just that I can't do it. As a consequence of this self-realisation is that I'm shifting toward daily charts, with a eye on trading hourly signals. If that makes any sense what so ever.
- don't use market orders - I am starting to appreciate more and more limit orders. It helps to focus my attention on where I can place a trade, what the stop should be and where I think it will go, my target.
- don't bet the house - trade size is linked directly with account size. Y mistake is to pretend I am a whale and blow everything out the spout at once. I might like the idea of making an extra zero or two, but the extra stress involved in 1pip = 5% of account does not work for me. Position size should be small enough to mean that a stop out doesn't take a big chunk of your account with it.
- don't trade emotionally - revenge trades, angry trades, sad and despairing trades, done them all. I find they don't work for me most of the time. Just enough to feed the gambling urge, but not enough to keep the balance +ve.
- don't be in the market all the time - sometimes it's chopping around or simply doing things that don;t make sense. Maybe it's a news announcement that is coming soon, the bigger, the more jittery things appear. Sometimes, it's actually sensible and the 'right' thing to do to have no trades on. Not even a waiting order.
- don't always do something - this is sublty different but equally important to the point above. Sometimes, the best thing to do is nothing. Sit on those hands. Your trade is in, let it do its thing. Fiddling, adjusting stops, closing early, opening new ones in the same direction. Just STOP.
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