16th June 2014 – Day 6
Was taken out of the trade on the stop loss overnight. So the scores are 5 trades in (half way) won 2 and lost 3… still over all £300 up on the trades though.
Have been thinking about it over the weekend, my story is that with all the news around Iraq and the TV news footage that the US will likely make some kind of announcement, the Dow might fall again as a result. That’s my story anyway. Spoke to Nick at 9am and his view was that the market will move on from Iraq and start looking towards other things such as economic data etc. Anyway, I placed a trade to buy the Dow at 16,740. Immediately it went red (not good) and has continued to get worse since. The trade has now been on for an hour and it’s negative £58.50. Going to logout now and see what happens later in the morning, nothing I can do about it now anyway. Logged back in around lunchtime, market it up up up and I know to move my stop loss up too. Now I can only lose £50 max and still can gain £300. I’m thinking that the trade will be a good one and I’ll be enjoying more profit very soon. 10 minutes later, the numbers are tumbling quickly and my first thought is that if they continue to fall my now reduced stop loss will take me out of the trade. Should I put it back to where it was or should I leave it alone. I don’t know so I ask Nick… erm well that was quite clear. I should leave it where it is. First telling off from ‘Yoda’ and I leave it alone. While we’re on the phone the trade hits the new stop loss and I’m taken out. Not sure what to think, I’m still in profit overall but I guess I’d kind of assumed that the trade would be a good one and my 3:10 (at worst) would be secured. Hmmm? Not going to trade for the rest of the day and instead have a think about it, I’m still up £250 overall. I can totally see where people go wrong with this but I’m committed to sticking to Nicks rules and so tomorrow’s a new day.
Today was a good learning day for Ali I believe. He had a new trade, which moved substantially towards his target so I persuaded him to move his stop loss, like before, to reduce the potential he could lose from his current position of a profitable trade. All we can do is what is right to do at the time we do it, everything else is just hindsight, predictive thinking and noise. Once we position a stop loss we only ever move it to reduce our potential loss, we NEVER move it to increase a loss. We have to accept that some trades will win; some will lose and some will be taken out on reduced stop losses or break evens. As Ali’s numbers illustrate, if you practice this you don’t need as many winners as losers to make good returns. Ali has had double the number of loss making trades (4) as he has had winning trades (2) yet he is still £250 in profit. Believe in the rules and follow them, detach from the outcomes, this stuff works!
