Yet another new and learning experience for June

An interesting June for me as I learnt and acquire new knowledge, also at the same time having an experience in trading. Generally, most trades were done for medium or longer term, managing them as the market develop.

Made a few winning trades but at the same time also made a few mistakes. Nevertheless, still manage to contain those damages and withdrew $500 from the account. Those key lessons learnt are to allow breathing space for the trade especially when it's in the green and once stopped out, just stop trading for at least 4 hours. 

Learning & Exploring on managing losses

Did not manage to recover from last month losses, but just have to lift up my head and push on. At the same time, finding other opportunities, everyone need to survive after all.

Nevertheless, May started pretty well and due to personal circumstances, a withdrawal of $500 was made on the 3rd day of May. No big deal. However, as I commit myself to other opportunity, I had reduced screen time and hence I turned to longer term trading. Nothing had change seriously, it just that I may not have the luxury of time to myself and stay in front of the monitor and take a trade. Now I take the trade when the opportunity come and I would have to set the Stop Loss and leave it running and monitor the trade while on the move. In fact, starting from the second week of May, most if not all the trades taken were done this way.

Above show the result for the month of May, a profit of $162.22, which was quite a good result though it could have been much better. I had runners on a few occasion on the sell side and made quite a killing. However as the direction change, I did manage my stop loss but after being stopped out, I would again find opportunity to sell again. That! Gave back my profit to the market. Realising the mistake and rush-ness in my trade, I either had to set a wider stop loss or be patience for the retracement to reach a resistance level before selling again.

I will have to constantly stay on the sane side and keep a watchful mind to not fall into the trap of doing a trade ahead of time. Patience is still the key!

Recovery, tumble and recovery...

Had to work my way and recover after the frustrating month of March, tried very hard to be immune to those negative feeling and mindset due to the result of the previous month. Kept to my trading plan and strategy only to be hit by over-confident this time round and suffer another hard hit.

Almost went bonkers this time round, but with no road to retreat, I just had to bite on, stomach the hit and move on with a clear mind which I did. Continued to stay sane and move on with the trading momentum. Survived to the end of April, though the end result is a lost but at least I manage to kept my sanity and recover slowly. Stick to the plan, forget about the P7L while trading, count the pips and keep the profit no matter how small it is.

Stressful, Pressurising, Frustrating March

Into the fifth month of trading full-time, without any other income stream. It hadn't been a smooth sailing journey at all and in actual fact full of emotional swing up and down, which had been torturous. There are times where you think that you could cross the finishing line with flying colours while there are times where you start to wonder what you are doing and why you are doing this and that, totally clueless and aimless.

Nevertheless, I find that this journey is so far fulfilling if not for the stresses of life. Stressful because of those bills that you need to pay every month, Pressurising because of the need and necessity requirement of every month, Frustrating because you lose too much when you shouldn't had and even worst when you turn a winning day to loses. All these emotion exist in a human mind and I have to face it, it's not something that can be eliminated. I just have to learn to control them and be more immune to them, be on top of them. But then there's always good side and bad side to it.... Press ON!!!

 

Yet another month of loses, and again those loses came from the lost of control of emotion and ego, turning winning to loses. Nevertheless, did a $1,000 withdrawal and now total deposit for this trading account is $2,000. I am still very much in exploration to find the optimum loses per day. Money and Risk Management is still very much the key to unlock success in trading not forgetting controlling your emotion and ego.

Made some adjustment to my trading plan to prevent big loses and also minimum trade size to 1 lot, hence I will have to maintain a balance of at least $1,500 at all times (that would be almost 80% leverage!). 

It's the Spring Festive a.k.a Lunar / Chinese New Year (CNY)

Started the month making some losses and had been chasing after the losses as well as feeling the pressure and stress of the need to realise some revenue. Especially so after having suffered a great lost at a game of mahjong (down $1,500). I will definitely remember that day clearly not because of anything but the P&L record shows. On the 6 Feb 2018, it show the huge losses I had and the previous night was the day I suffered the great lost in mahjong. 😓😓😅

After that horrifying lost, mainly due to fighting the market to try to regain the losses, I had to called it a day (Live to Fight Another Day) and refresh myself and my mind to continue the following day. I did came back pretty well over the next few days and in fact almost back to breakeven.

It's also the month of the Chinese New Year (CNY) where we celebrate the new spring and visiting relatives and friends, some even took this opportunity to go for a short getaway vacation. As for me, it had been the same routine for the past decade, staying home looking after the household pet dog while my mum and sister go for a vacation. Of course, I also visit my relatives at their home on the second day of CNY and attended gathering with friends.

Sometimes, I just cannot live a day without trading and that sometimes kills me. On the 16 Feb 2018, which was the first day of CNY, I told myself that I should take a break since it was a holiday, but nevertheless a trade was taken which lead to another and because of the losses, one trade followed by another which eventually lead to another huge lost, else that could have been a good week. I was taken in by my own greed and having a view of the market. Had to humbled myself (Manage Your Ego) again and accept the fact that this losses will stay till the end of the month.

Did some wakeup call searching myself and reminded myself on the purpose and objective of my trading and proceed again, back to square one. I also made a decision to trade on higher leverage (1:50-60) to allow for faster track to make a comeback, but with vigilant. Tumbled along the way trying to come back again and bring my trading account back to safe zone, and making mental note to keep my account in profit (>$3,000). No smooth sailing but moved on slowly and progressively in the month of March 2018.

A New Year (2018) with the Beginning of a New Chapter

I was preparing for my In-Camp-Training (ICT) for the new year celebration, though there wasn't any much celebration for me. Something special about this ICT was that we will be out on the first day instead of the usually second week. Nevertheless, I was prepare not to trade during my ICT as I won't be able to monitor the price action as well as intermittent data connection will most likely be experience.

Came back on the end of the first week and saw a interesting opportunity buildup and took the shot, before I knew it I fell asleep only to wake up much later in the evening to find my trade a winner, set my stop loss and take profit and held it over the weekend. This trade was such a runner/winner that my January targetted profit was met with that one trade.

After my ICT, I continue to trade in accordance to my trading plan/strategy and make some losses, however taking the mental note to not to loss back my profit made by the winner earlier in the month.

In general, January had been a great month but I also refresh myself not to take a view but to follow where the market goes. Remembering that profit is a by-product of trading, small consistent win is better than that occasional winner. 

Cautious Christmas 2017 Trading Season

Started December trading with much caution as it's the start of festive season for many. However, there were still much opportunities and with the limited liquidity, I was able to make some profit from the market.

I also manage to accumulated enough to make a withdrawal of $1,000 in mid of December without affecting the trading capital and continued to the end of the month and nett almost $1,000 including the $1,000 I had withdrew in mid month. 👍👍

As of December, I was trading between 100,000 to 150,000 and maintaining sanity is of utmost importance. Especially so when you gain for a few days and then suffer a lost that reduces your size. You will need to fight really hard to ensure that your size really reduced to the planned as most of the time you will want to continue at your last traded size so than regaining the capital is also much easier. Hence keeping you ego under control and having your greed under check are equally important.

Turning into full time Trading by chance

Even though with the perfect result in the month of October 2017, I knew I wasn't ready to make trading my full time job yet for a few reasons, firstly, not having the required capital amount to trade my desired lot size and also it's just one month and that could just be pure luck.

However, in early November 2017, I was laid off from my employment and looking at myself, I knew there wasn't anything else I could do but to fall back into trading full time. I graduated with Diploma in Mechatronics in 1997, but joined the Republic of Singapore Navy as a combat officer for almost 12 years before i left the service and joined this proprietary trading firm which grow and expand into a FinTech firm today for almost 8 years. Though I had learnt much in trading and gained valuable experience as well, there wasn't any black and white to certify that I have the necessary background in trading and training. I obviously can't use my diploma to apply for a engineering job for sure and also with my passion very much still in FX trading, I decided to trade full time and survive till such time that my capital grew to my objective.

And to get everything started, I deposited another $5,000 into my trading account so that I can grow my capital slightly faster. Make some profit in the first week of November and made a withdrawal of $800 to round up my total trading capital to $6,000 ($2,000-$200+$5,000-$800=$6,000).

Thereafter, I suffered much losses, seem like though I had been watched by the broker for withdrawing, of course that's not true. It's basically just your mind playing with you to find reason for your losses. Generally, looking at those days that I make losses were those days where I did not stop after I was stopped out and yet did not meet my daily target marginally or those were the days where I just got greedy and wanted to make more. There were just countless number of days where a good day (make and meet the daily profit target) become a bad day (continued to trade after meeting target and lose it all).

Nevertheless, I continued to push on on this journey that I had chosen as there is no turning back now.

Final Trading Plan & Strategy

After much trial and error, putting in all that I had learnt, I slowly developed my trade plan and make slight adjustment as I go along.

To me, a daily profit of 5-10 pips is very much doable and I built my plan based on that. A daily profit of 5 pips nett on brokerage fee would mean having a 100 pips nett profit in a month. Depending on the size of the trade, and that would determine the amount you earn per month. My objective was to be able to trade a size of 10 lots (1 million) every trade and that would mean $100 per pip, $500 a day and $10,000 a month!

To be able to trade the size of 10 lots using leverage of not more than 1:30, I would need to have a trading capital of at least $33,000, which is something I do not have at the moment and would have to build up slowly. I started off trading with varying size everyday as my capital grow, using a leverage of 1:30, one trade at a time.

Deposited $2,000 into my trading account in late August 2017 and started trading at 50,000 per trade, and on the first trading day I was lucky to have a runner and make quite a number of pips (~40 pips).

On the following day, again I got a runner and made quite a bit of profit as well (~40 pips) only to lose some back on the third day but I decided to make a withdrawal of $200 at the end of the month. Last day of the month, I did manage to make some profit too!

I was quite excited with the result and make a mental note to myself that I will have to continue to maintain my sanity and continue with my result, building the consistency that is very much required to survive.

Nevertheless, Hell came in September, making some but losing mostly throughout the month, netting a lost of $1,700+ 😓😓😓 It was also around this time, late in September 2017 that I came across this post in forex factory forum talking about a simple scalping strategy which I setup on my trading chart and started exploring and using it as my trade opportunity signal.

I also had this excel spreadsheet to help me calculate the size of trade at the start of each day and the targeted daily profit. Having lost $1,700+ the previous month, my trading size drop to 15,000 but I made a decision to continued trading on 50,000, that was a huge risk I am taking. Refining my mental model, I just waited for the signal to show up, take the trade and secure my profit (adjusting my stop loss) when I can, thereafter, see if it can run further and continue to adjust my stop loss. If it doesn't and even if I am below my daily profit target I stopped, taking only 1 trade a day. I was well rewards with a perfect month netting a total profit of $1,500+ for the month.

Readers, you should by now realised that in trading, no matter how much perfection you have in your trading skills, you will still eventually lose money if you do not have a strong and correct mindset. Set your objective and break it into smaller and more deliverable daily/weekly target then you will not feel stressed to be aggressive when you shouldn't be, at least this work for me to control my mind.

Exploring Trading Plan & Strategy

After spending 6 months in Shanghai, China, I continued to be involved heavily in training the FX dealers/trainee, especially after the company setup an office equipped with a dealing room in the financial district. Of course, most of the Chinese students I had spent 6 months training were also selected and employed to be our FX dealers. However, I was eventually pulled out of Shanghai, China after the company decided to expand more aggressively in India. Although the plan in India did not really worked out, I continued to lead the trading session daily in Singapore and training of FX dealers when they were deployed to Singapore for a month stay.

All this training and leading had nurtured me to be more confidence in my trading, but the only thing I lacked of was consistency in my result (P&L). Hence I started to explore more on how to get consistent result, via trading plan, trading strategy as well as money/risk management.

Firstly, I came up with a trading plan for myself, since I am more comfortable with scalping, I decided on small but consistent win. Taking into consideration of brokerage commission, I need to take at least 8-10 profitable trades daily if I were to get out with a profit target of 1-1.5 pip per trade. Tried out the trade plan but still did not get any outstanding result. I also soon came to realise that the downfall of a trader was over trading. Hence I need to cut down the numbers of trades taken.

Next, I also have to manage my money/risk management, so that I do not lose too much or risk too much. With the most simplicity method, I came up with a daily stop loss limit of 15 pips, however I soon realised that at most times, I may need to risk more than 15 pips on a single trade. Still, I need to study more into this money/risk management.

Last but not least, the strategy that I should use for my trading. Since I had been practising price action trading for the longest time, I should evolve my strategy around price action trading. Which I had been doing so but without consistency, there seem to be a missing piece to the puzzle.

~||~

The beauty of things was that I am now based in Singapore and much training activities had toned down drastically. Hence I had a lot of time on hand to explore and trial. I also started participating in forex factory forum more actively. Most of the previous forum I used to participate in had either shutdown or had changed so much that not many were active. Forex factory continued to be the one with the highest participation rate.

In the past, when I trade there was no objective or target, and that cause me to just keep trading resulting in over trading which eventually burn you out and take your profit away. So I came up with a daily target and work towards achieving this daily target which leads to my final objective in trading.

Also through the participation in forum, I came upon a trading strategy involving Bollinger Band (BB) and Smoothed Moving Average (SMMA). This strategy is for scalping and target 8-10 pips per trade, which suit my plan and trading plan. This strategy basically provided me with the signal of an opportunity and through my analysis and resistance & support, I decide whether I want to take the trade.

Onwards with more training opportunity as a FX Trainer

It was almost 6 months after my first training opportunity in Mumbai, India and the team was getting ready for a session in Shanghai, China. There was a briefing session conducted to invited the Chinese university students to register for the 2 weeks training program. After this 2 weeks session, those interested students can continue for the 6 months program.

This time round, I wasn't really involved as another colleague who used to work in Shanghai was identified to be their trainer, but I was told to join in for the first 2 weeks. We flew in to Shanghai, China and settled into the university exchange students dormitory which was like a hotel. The accommodation was situated within the university compound.

During the first day of their 2 weeks session, the Chief Trainer covers the topic on mindset of a trader with a translator. On the second day onward, the students have to go through elearning modules together, module by module, and the trainer were suppose to go through each module asking questions along the way and explaining complicated topics. My colleague was quite quiet and wasn't confident enough to speak up in the presentation and again I did what I thought was the only right thing to do. Hence, I stood in front of the class and went through the modules presenting in mandarin.

It was during one such session while I was explaining in mandarin on the topic we were covering that the Chief trainer came by with his partner for a visit. Having saw me speaking up in mandarin fluently and engaging the students, he decided to let me that over the rest of the training program in Shanghai and that started my next opportunity in training.

Over the next 6 months, I flew in and out of Shanghai, China, with each stay lasting about 2.5 to 3 months as the first year visa can only be extended to 90 days. Nevertheless, we planned my trip coming back to Singapore during the Chinese holidays to prevent disruption to the program.

It was also during this training trip that I took up the opportunity to lead trading via webinar. Wherever I was, I would lead the trading and broadcast via webinar back to Singapore and to anyone anywhere who was given the link to the daily webinar.

Training the Chinese students allow me to sink in deeply those mindsets and I had to practice whatever I preached hence complementing my price action trading. Leading trading via webinar allows me to become more vocal with my thoughts and thought me the all important patience that was very much required in trading. Wait for it to happen and not assume that it will happen. All in all, the time I spent in training and leading allows me to move in yet another step closer toward being a trader.

More training opportunity to become a FX trader

Breakthrough in my trading came about when I was given the opportunity to train. How it all started? I still remember...  It was sometime near the Chinese New Year in 2014 and I was notified that I may be deployed to Mumbai to oversees their training sessions. Being unprepared and not having any financial educational background, I wasn't really sure whether I was up to this task in a foreign land all by myself, especially when most of those that I am going to meet are graduates or undergraduates in finances.

However, I took up the challenge and flew nearly 4,000 km to Mumbai, India. After reaching and clearing the custom at the Mumbai International Airport, I have to find my own way to my accommodation, which was near the university that I was to be at to oversees their training. After settling in to the accommodation and had a good night rest, I reported to the university in the morning the following day and started setting up the training package on the computers in their computer lab with the help of their technicians.

I was to ensure that the training modules that the students who had taken interest in our training are available to them and that any technical issues that arises are handle by me as well as to answer any basic questions that the students may have. Everything pretty much went well with little or no questions asked, since the training package were really very basic and logical.

The following week, after the first week of theoretical lessons, the students start their hand-on on the trading platform and then listen into the trading webinar to start their trading. I went through with the students on how to use the trading platform before their trading session commence. However, due to the internet capacity the university was using, it became apparent that the bandwidth was limited when streaming the webinar and it was quite disruptive.

Having noticed that many students start to become impatience as they find it difficult to listen to the disruptive webinar, I did what I thought was the only right thing to do. I stopped the webinar and put up the trading platform and did the analysis and read the price action development. Explaining along the way, what I would have done as the price action develop and I eventually put in a trade entry into the trading platform and presto, the trade was executed and hit the take profit (TP) in less that 30 seconds, bringing amazement and excitement to the students, which also very much surprised myself.

I continued the session explaining the price action and eventually took another trade which again took profit in less than 30 seconds. This really boosted my confidence as well as the university facilitator, who at this moment walked out of the computer lab and announced to the students that they are in good hand. These sessions went on for the rest of the week and the students also started asking more questions on trading as well as experience trading on the trading platform.

However, due to some admin follow up, the training sessions ended at the end of the second week and I return to Singapore. My take away from this opportunity was really a boost in my trading confidence and that I am able to trade following on those price action development that I had shared in my previous post, Internalizing the mindsets of a trader.

Internalizing the mindsets of a trader

Trade, trade, trade and more trade is the only way to internalise the mindsets and gain valuable experience, this is what we call "Training is in the trading itself".

Initially, at the end of each trading session, we have to review all our trades and complete our trade journal.  The journal is a simple diary of the trade you had taken, stating the reason why the trade was taken and after the trade is done, what is the outcome and what was your thought. In the beginning, not much effort was usually put into the journal, especially when a trade goes wrong and I have to find reason to explain why I did the trade. However as time goes by, I realised that many things are learnt and pick up from the journal. Hence, when I have a winner, I would goes into detail on how I had identified the trade, what were the price action I saw that allows me to decide and took the trade. On a loser, what had I assumed that resulted in me taking the trade as well as where were the trade taken in respect to the support and resistance.

Over a period of time, doing the journal diligently and religiously, I realized that I had a better understanding of the price action as well as what are the price action development that allow me to make a winner trade. The journal also, in a way, allows me to track the type of trade that I take which usually turn out to be winner. With that, my statistic is formed and it allows me to take into consideration of the type of trade that I should generally take with higher confidence then the others.

Below are trade that I generally will take without much hesitation when the price action develop as what I had planned.

The formation of two higher lows, and a move for the break of the previous high to form the third higher low.

Flag breakout indicating the continuation of the bull move. First, the price action break out of the channel, buildup and remain above the channel.

Market tested the bottom twice, forming a double bottom, and manage to buildup near/at the neckline before it breakout.

After the price reach a high and retraces, it buildup with a series of higher lows and test towards the previous high again.

Looking at higher time frame also helps to determine whether there are support or resistance ahead, this will give the potential of the trade. Generally, there should be a space of at least 1:3 ratio before the trade can be taken with ease. For example, targeting for a profit of 1 pip, there should be a potential space for the market to move 3 pips before the trade can be taken with ease.

Taking a step closer to being a FX Trader

Continued to trade on my live account using the ABC system and make some but loss more... burst my account and had to top up so many times that I lost count. At the same time, learning from the forum and employing them on my live account as well. Somehow, it seemed that I do have some beginner luck as I always make some good trades with new system but eventually all profit goes back to the market.

I was getting frustrated most of the time and even fear started to creep in when I trade. One day, during our usual chatting session on the forum, this person nicknamed "mac" offered to meet me and share with me on how to trade. I appreciated his offer and arranged for a convenient time to meet up. It was also around the same time that I responded to an advertisement on the recruitment of FX dealer by Six Capital. I attended the briefing session with my childhood friend and was impressed by the content that was briefed. I just had the feeling that this had to be the way to trade for a living. Hence after much consideration, I signed up for their 6 months Trainee Dealer Program (TDP).

I also shared with mac on my decision and intention to attend the TDP. He advised that I should therefore concentrate on the training and hence we eventually did not meet up. I attended the first theory session of the TDP, which generally covers the basic of FX trading, topics such as support & resistance, trendlines and chart pattern as well as the mindsets of a trader.

There are generally three types of basic chart pattern, continuation pattern, reversal pattern and consolidation pattern. Firstly, the Continuation patterns are Flag and Triangle.

Head & Shoulder, Inverted Head & Shoulder, Double/Triple Top or Bottom are Reversal patterns.

Consolidation patterns are Rectangle and Triangle.

The six mindsets of a trader. 1) Don't Lose, 2) Don't Hold, 3) Don't Risk, 4) Trend is you Friend, 5) Manage your Ego and 6) Live to fight another day. I had to internalize the six mindsets and hence I wrote a creed to help myself remember them better.

"A Trader Don't Lose in Trading, so if we dunno or not sure, we don't do. And if we do, we Don't Hold so that we Don't Risk, by not holding we minimize our exposure time (risk).
We always trade with the trend because the Trend is Our Friend. We Manage our Ego so that we are emotionally detach from the market and if we had a bad day, we stop trading so that we Live to Fight Another Day!"

After the theory session are completed, it's purely hand-on trading experience, internalizing the mindsets and mastering the skill. During each trading session, the trainer will analyze the market condition before the trading session start and along the way, explaining how and where a trade can be done or how the price action develop allows one to do certain thing. The trading sessions are indeed useful and help a lot on one learning curve.

However, my conclusion, I realize that learning to trade is really as easy as 123, but to master them and how long you take to master them would depends on the individual. Especially internalizing the 6 mindsets, it's more than just to memorize and remember them.

Exposure to FX Trading

Flashback to the year 2006 (should be correct as far as I can remember), I attended a seminar held by an afflitate and without much hesitation, I signed up on the spot for their FX trading course with FX1 Academy with their tagline, "Trading is as easy as ABC". The course fee of $3,000++ was guaranteed with 10% interest refundable should you be not satisfied with the result at the end of the two weeks course.

Over a weekend on Saturday and Sunday, we went through the basic topics on FX trading and their ABC strategy which were actually available if you had befriended Goggle. However, people of my generation... well, we do use Goggle but not to the extend of making them our way of life, hence it's only very much after that I realized what I learnt was available FREE on the internet. Below is a video found in YouTube on the ABC Trading System.

After attending the weekend theory session, we were to put our knowledge and skills to test on a DEMO account of their appointed broker, which I can’t remember the name, this broker had also eventually been merged with another broker, now known as ibfx. 

We were taught and to employ the strategy or system on USDJPY. Each day, I would just open my DEMO trading account and watch the USDJPY chart to develop the ABC as you had seen the the video above. There were some good trades and some losers. At the end of the trial period of the DEMO account, I had to opened another to continued practicing. Nevertheless, the result wasn’t too convincing as the overall result in losses and not profit. 

We were appointed mentor from FX1 whom will go through your trading chart and coach you accordingly. I religiously sent my trading charts daily to the mentor and mostly the reply were to continue practicing and keep up the good work. 🙄 Losing trades were left unexplained even though the ABC were developed, hence the routine continued... look for ABC development and place your trade... then repeat and again and again...

At the same time after being exposed to the FX trading arena, I also started to participate in trading forum such as Asia trading forum and forexfactory. I was rather active in Asia trading forum and got to know quite a few regulars and formed our private chat room as well. For the latter, I was more on the sideline just reading what others had posted. 

After the FX1 course period which was only two weeks, trading result with the ABC trading system continues to result in losses but I continued using the system since I was clueless of others. While learning from the others through the forum, I also read about reviews on FX1 Academy. Many were like me who had after attending the course, still clueless and not able to make profit with their trading system. There were also posts on getting back their course fee was guaranteed when they signed up. Through some advise, I finally decided to request for the same.

After submitting my request to my mentor, I was told to send my trading charts for review and process of the refund. The reply to my refund request eventually was that I had not traded enough number of trades and that I had changed a few DEMO account hence my refund cannot to acceded. Of course I was pretty upset with the reply but nevertheless I took it as a stepping stone to being expose to FX trading. I also opened and funded my live trading account and started trading live using the one and only trading strategy I know.