Day Trade Journal – Day 8- June 7, 2023
TRADE #1 OVERVIEW
Forex (Oanda-MT4)
PAIR: EUR/GBP
LONG/SHORT: SHORT
LOT SIZE: 0.84
ENTRY:0.86043
EXIT: 0.86004
STOPLOSS: 0.86059
PNL:
Trade Analysis and Insights:
Entry
After identifying five confluences or indicators suggesting a potential continuation to the downside, I decided to adopt an aggressive approach and entered a trade at the same level as the last candle where the three-line strike pattern appeared (Orange star), but due to spread, I was filled at a lower price than expected.
Exit & Stop loss
3 pips stop loss and 6 pips take profit.
Before trading, I analyzed three crucial factors: the EMA 21, ATR, and a significant price zone at two levels. The EMA 21 helped me determine the market trend, while I closely examined price patterns and trends. To mitigate risks, I identified key price levels such as the support zone and EMA 21. By taking all these factors into account, I aimed to make informed trade entries and establish effective stop-loss strategies.
Lot Size
84,000 units or 0.84 Standard Lot or 84 micro lots.
We allocated 84,000 units, following a 1% risk management strategy for each trade and also have a attainable trade. To account for this approach and potential short-term sell-off, we adjusted our allocation size accordingly.
Trade #1 Result = Loss (-$80.39)
Reflection on Trade
Always consider the pips, spread, and, most importantly, the numbers you input for your allocation size. By doing so, you can avoid moving your stop loss unnecessarily to accommodate your trade. Planning ahead and cutting losses quickly is crucial to prevent significant losses. It’s important to maintain emotional control and be both ruthless and disciplined when it comes to your price points.
Improvements to be considered:
Must not let emotions takeover, practice cut losses and never add on your losing trade.
TRADE #2 OVERVIEW
Forex (Oanda-MT4)
PAIR: USD/JPY
LONG/SHORT: SHORT
LOT SIZE: 0.21
ENTRY: 139.250
EXIT: 139.990
STOPLOSS: 139.366
PNL:
Trade Analysis and Insights:
Entry
After identifying major stop loss zones and considering the higher timeframe for trend continuation, I entered on the same level as EMA 21 and have my stop loss level 2 resistance points zone above to accommodate any sudden price movements that might take me our prematurely.
Exit & Stop loss
13 pips stop loss and 27 pips take profit.
Prior to engaging in trading, I carefully evaluated three essential elements: the EMA 21, ATR, and an important price range represented by two levels. The EMA 21 was instrumental in identifying the prevailing market direction, while I diligently observed price patterns and trends. To minimize potential risks, I pinpointed significant price levels, including the support zone and EMA 21. By considering all of these factors, my objective was to execute well-informed trade entries and establish robust stop-loss strategies.
Lot Size
21,000 units or 0.21 Standard Lot or 21micro lots.
We adjusted our allocation size to 21,000 units, adhering to a 1% risk management strategy for each trade, while also considering an achievable trade. This adjustment was made to accommodate our approach and account for any potential price reaction on plotted zone levels.
Trade #2 Result = Loss (-$25.49)
Reflection on Trade
Always consider the zones where prices might react and observe if the price fails to break through those levels. This can potentially indicate an impending reversal, prompting you to consider taking profits even if the price doesn’t reach your desired take profit level. Failing to do so could turn a winning trade into a losing one and impact your mental capacity for trading effectively.
Improvements to be considered:
Set stop loss to breakeven if prices fails to break on major zone levels to minimize risk.
Overview of trades
Trades taken: 2 Trades
Win rate: 0% (1/2)
PnL: -$105.88
Managing emotions while trading and avoiding costly mistakes, such as moving stop-loss orders, can be challenging but crucial for successful trading. Here are some tips to help you handle emotions and make more rational decisions:
- Develop a Trading Plan: Having a well-defined trading plan that includes entry and exit strategies, risk management rules, and profit targets can provide structure and help reduce emotional decision-making.
- Stick to Your Plan: Once you have a trading plan in place, discipline yourself to follow it consistently. Avoid making impulsive decisions based on fear or greed. Trust in your strategy and the pre-determined rules you set for yourself.
- Set Realistic Expectations: Understand that losses are a part of trading and that not every trade will be a winner. Set realistic expectations and accept that there will be ups and downs. Avoid chasing unrealistic profits or trying to recover losses quickly, as this can lead to emotional decision-making.
- Use Stop-Loss Orders: Implementing stop-loss orders is a vital risk management tool. It helps limit potential losses by automatically closing your position if the price reaches a predetermined level. Once you set a stop-loss order, avoid moving it unless there is a valid reason based on your trading strategy, not emotions.
- Practice Proper Position Sizing: Determine the appropriate position size based on your risk tolerance and the size of your trading account. Avoid risking too much on a single trade, as it can lead to increased emotional stress. Use position sizing techniques such as the percentage risk per trade or the fixed dollar amount approach.
- Take Breaks and Manage Stress: Trading can be mentally and emotionally demanding. Take regular breaks, both during trading sessions and between them, to clear your mind and reduce stress. Engage in activities that help you relax and maintain a balanced mindset.
- Analyze Your Trades: Regularly review your trades to learn from both successes and failures. Analyzing your trades objectively can help you identify patterns, refine your strategy, and reduce emotional biases.
- Seek Support and Education: Join trading communities or find a mentor who can provide guidance and support. Educate yourself about trading psychology and emotional biases to better understand your own behavior and develop strategies for overcoming emotional challenges.
Remember, emotional control and discipline are key to successful trading. By implementing these tips and continuously working on your mindset, you can improve your ability to make rational decisions and avoid costly mistakes.
“Emotional control is the foundation of successful trading. Without it, even the best strategy can crumble under the weight of impulsive decisions.”
John Smith