FOMC meeting announcement 2015/01/29 8:40 AM GMT

Yesterday, we all followed to FOMC meeting announcement. Generally, the market is very cautious in the hours before the announcement and very volatile in the first minutes right after the announcement. Here comes the question how to trade it? The answer is very simple for the day trader - do not trade it! Stay away in the sidelines and wait first reactions to calm down and the market get sober; unless we are entering a chop fest and in a couple of minutes monthly gains could be erased.

Econoday is a good economic calendar that I use as to have in mind important announcements, reports etc. that might have impact on the market and price action.

How to recover from a big loss 2015/01/22 8:39 PM GMT

Taking and accepting losses is the part of the game when it comes to trading. There is no other job in the world where you could have your monthly earnings of hard work wiped out for a several minutes. It could be very devastating and the sober and right way to react to this is to not allow emotions take over. Then it is important to go in the side lines and stay away from trading for some time, recapitulate your trading strategies, plans and rules. It is a good idea not to jump into trades again in a hurry with the idea to restore your losses at once as such emotional move will lead only to bigger losses and nothing else.

What I do is after I have stayed some time away from the market, I go hunting again as trading is very alike hunting - patiently, I go out, look for my prey, then set up the trap and only after that I could catch something so in this sense I start watching the market, looking for good and very sure win entry point, then I enter and shortly after that I take profits no matter how small they are, it is important after a big loss to start taking small profits, bit by bit rebuilding your confidence.

On the other hand, losses are our school so to say. The trader learns their job the hard way by losing money. Some say that you can know somebody only after you see them losing money. That is very true, when a person is losing, it reveals their inner part, it awakes devils within and makes their brain boil. The answer here is one word - control. As soon as you learn how to control in such a hard situation, you will be one step ahead of other traders. Okay, after this lyrical retreat, I go on with a few last words about learning from your losses. The loss will be indeed totally devastating if one doesn't learn anything from it. That is why, I recall in my mind the losing trade: entry point - why I entered there, was it as per my rules and strategy, what turned wrong, did I stop the loss at right levels and after figuring all out, mind it as to evade to repeat it. I don't say never repeat it, as in trading it impossible.

In trading it is very important to set firm rules and plan which to stick to. When I started trading, I established this practice to set an assignment with goals to be reached as well as parameters so to say; also writing some king of a trading journal apart from having account statements is very useful as the trading is constant learning and ability to write down and then read and go through past trades and decisions is the part of the process.

For example, one of my first assignments was to trade every day or almost every day as without real practice it is not possible to acquire the needed skills for this job. I can say that since setting this assignment it is still active and am actively trading. This helps quite a lot understanding the market on everyday basis as well as notice some features of the underlying instrument which understanding comes with everyday practice. The second important goal I set for myself is to be consistent in my performance. For 4 months there I have managed to keep good profit rate. Then I got too self-confident which kind of ruined my performance. This was a lesson which showed that over confidence is not good as well as too big euphoria about profitable trades is not good.

That is why, now I am starting a new assignment which would follow the following rules:
- to trade only S&P500 - this is the instrument I've been following for many years now and I know the best;
- to initiate trades only when sure it is a good trade - never over trade;
- take losses and never sit on a losing trade in hope it will turn direction;
- take fast profits when market uncertain keep profitable trades when strong trending market;

Okay that would be all, I will stick to this plan and will post here updates as well as my trades and returns.

2015/01/12 2:37 PM GMT

BTC SPX 2036.1 +7

2:35 PM GMT

STO SPX 2043.1

<< home