My Millionaire Goal

I realize that my greatest weakness in trading is riding my winners… Like I mentioned multiple times before, I am extremely risk-averse…. Thus, I never had problems cutting my losses… in fact, when I recently read in a forum that a lot of people do not use stop loss… I was totally beyond words… Couldn’t believe it… to me, that’s insane… But well, to each his own… I guess as long as it works for you, it’s fine…

Anyway, back to topic… though I always cut my losses… I never ride my winners… out of fear and greed… I normally close my positions for a small win, only to see the trend continue for a substantial period of time…

I always know that the adage “You can never go broke taking profits” is wrong… Many successful traders had explained how silly this concept is… because you need your big winners to cover your losses and your trading overhead… so, it is important to have many small wins and a few big wins… Nonetheless, I always freak out when I see a profitable trade turn against me… and choose to take whatever profits is left or even to close at breakeven (or a small loss)…

Therefore, I’ve decided to work on my exit strategy… I do have a ‘well thought out’ exit plan… but I need discipline in implementing it… I need to convince myself that my exit plan works… As a result, I’ve decided to “collect evidence” (screenshots)… and post them on my blog… (check it out here)…. that way, I can refer to them whenever my fear kicks in… hope this works….

I’m reading the book Enhancing Trader Performance: Proven Strategies From the Cutting Edge of Trading Psychology by Brett N. Steenbarger… The first chapter got me thinking… I realize I never really understood (or tried to understand) myself…

I thought I am a person that needs stability… even though I am self-employed, can’t stand the routine of a 9 to 5 job, and was very miserable when I was bonded for 5 years in my previous job….

I thought I am good at following rules and a mechanical system suits me best… even though when I was a Math student, I never focused on the “How”, but focused more on the “Why”s… I always tried to memorize as few formulae as possible… but rather seeked to understand the concept behind the formulae and derived them myself….

Anyway, I’ve come to some conclusions about myself:

1. Analytical but emotional at times
2. Seeks stimulation
3. Extremely risk averse
4. Likes the challenge and mental stimulation of solving a problem
5. Strong need for freedom

I am not sure what trading style suits me best… though I have a vague idea… well, at least I know what does not suit me…

The forex market had been range trading pretty much the whole of yesterday (Mon)… Today, I finally see some movement… However, unfortunately till now, I’ve not spotted any MACD Divergence that I am confident of trading…

I intend to start trading with real money as soon as I spot a good chance… but the irony is, when I was paper-trading, MACD divergence were spotted almost everyday… now that I am ready to try with real money… I can’t find a single trade… Not that I am stricter with my selection now… There just isn’t anything suitable to trade… Well, actually, there are some potential trades based my reading of price action… but I am still a novice in that regard, so I am not confident enough to trade them without confirmation from MACD…

I’ll be patient… cause the ability to overcome fear and greed is the ONLY way to win in trading…. Here’s an article written by a fellow forex trader that I think makes a lot of sense… and it kind of answers a question that I kept harping on in some of my older posts… “What is my edge in Forex trading?”…