$EURUSD - stopped out to the tick

After only several hours, the swing short $EURUSD from 1.3231 was stopped out to the tick for a -31 pip loss.  I got the high print of the day so far.  Better luck next time!

EURUSD 1 min chart

$EURUSD charts - short entry at 1.3231

Charts with explanation of short entry at 1.3231:

It starts at the daily chart level, where a confluence of a trendline, 61.8% retracement, and price takes place.

EURUSD daily

At the timeframe to help trigger the order, there's another connect 2 points and extend trendline in confluence with an overbought stochastics indicator.

EURUSD 15 minute

Historically, these swing trades get stopped out more than 50% of the time at my original stop, especially with the relatively tight stops I use in relation to the target objectives.  Since I'm usually targeting a profit of around 10R (R=initial stop loss amount), the numbers work out even if I'm wrong often.

Closed $AUDUSD for +207 pips

After nearly 1 month, the AUDUSD short I entered on 3/26 was exited yesterday for a profit of +207 pips.  Based on my initial risk of 40 pips, this trade returned about 5.1R. 

The 1.0250 area provided solid support, even after relatively bad economic news released late Monday night, which indicated to me that there was a decent amount of strength supporting this pair.

While the +207 pips initial sounds like respectable outcome, this trade was held for nearly a month, so another way of looking at this is that it didn't quite average +10 pips a day.

Update: $AUDUSD short from 3/26

Hard to believe I haven't been shaken out of the $AUDUSD swing short at 1.0521 from 3/26, but assuming I don't jinx myself due to this post and get stopped out within minutes once this post goes live, I'll continue to hold this until I get a clear signal that the move is over or until it approaches one of the targets in my original post.

$AUDUSD - 240m chart

One thought I had based on the chart above is how relatively large the swings have been (> 100 pips) since I entered this trade (nice opportunity), vs. the absolute P&L I currently have.  On a risk/return basis, I'm over 4R on this trade (currently about +175 pips, original risk = 40 pips) and was as high as 7.5R at one time.

When I look at all the swings, they add up to well over 1,000 pips, so I can't help but think what if I was able to capture just 25% of those moves?  Yes, probably faulty thinking, especially since I could have been stopped out within minutes once I entered this trade, or perhaps this could have dropped nearly straight down to parity instead of going somewhat sideways.  But I can't help but imagine the possibilities.

Not yet ready for prime time

This week had a lot more family related challenges than usual, including a sick kid as well as having to be a single parent.  And whenever I'm in single parent mode, I do my best not to trade at all.  I've had too many bad experiences in the past.

However, I did get a few trades in yesterday (tisk, tisk) and I did something I've never really done before.  After reading Denise Shull's book Market Mind Games about really doing your best to feel your emotions, I did that -- especially when I got into the impulsive (revenge) state of mind.

And wow, not sure what happened, but it sure did touch a nerve.

In the relatively short time I traded, I had a few semi-revenge related trades.  And although my loss for the day yesterday was far from the worst, it was probably one of the worse days I've ever had in terms of how I felt.  Strong feelings lingered on well into the evening.  It was not pleasant.

Opening myself up to really feel what's going on seems to have opened up a can of worms.  Perhaps I've been repressing my feeling for far too long? 

I can only hope that this is one of the first steps to transform myself into an effective trader.  Similar to the various states that water goes through -- ice, water, steam, water, ice -- I believe in the end, it's good to shake up and really change my mental state of mind and being so that I can better explore what's there, shape it, and put it back in better condition.

What does this all mean? 

My mental game is not ready for prime time.  No matter how many great trading strategies I'm knowledgeable about, if I can not maintain the proper state of mind, I will not be able to execution the strategy properly. 

There have been many instances where Renato would call out one great trade after another based on his Diamond Setups system, and I would either be too selective on which signals to take, or mismanage them once entered.

I have tons of data via my trading journal on Tradervue of all the revenge trades I have taken and it's clear to see the significant harm I've done to my P&L on those trades alone.  This simply shows a great lack of respect for my money trading. 

Believe it or not, I actually used to do better back in the days when I was playing blackjack, since I respected and feared the casinos!  If I can simply cut just half of my revenge trades, I would be a halfway decent trader.

So once again, it's time to continue what I was doing on Spring break and to reevaluate everything I'm doing, create a plan, and follow that plan to achieve my goal of becoming a consistently profitable trader. 

One year down, many more to go...