I have been on a winning streak and now nervous to take new positions

Hi Guys,

I have just started trading (well spread betting) and I started with gbp 80 in november and now I am at gbp 600+; I am a newbie and I think i got lucky by being in and out of some good trades.

Now I am getting slightly nervous of taking new positions. I dont want to feel too cocky and open new/bad positions and at the same time I dont want to be scared and not open any good trades (i think i am over-analyzing new potential trades...)

How do you guys deal with this? any ideas?

I trade on breakout patterns and normally hold on to my trades until the pattern is broken.. thats it, very simple strategy..

anyone?? will be good to know how you deal with this..

mylin_m19 posted:
I trade on breakout patterns and normally hold on to my trades until the pattern is broken.. thats it, very simple strategy..

Keep doing what you've been doing. Your fear of loss is preventing you from future gains, and I suspect this is because you might not have a clear money management plan. A sensible stop-loss and trailing-stop strategy will give you the confidence of knowing potential losses 'before' you enter a trade, plus help you secure breakeven and systematically lock-in accrued profit as a trade progresses.

Hi Gary,
I do have a stop-loss at the moment but it is sufficiently far from the price level, it prevents me from going in a loss but I dont want to loose the accumulated profits. How do i decide where to place my stop-loss?
Thanks,

i guess u need to lose some trades n practice how to handle that emotionally, since eventually u will face some losses,
but the idea iits not preventing losses, but its only how to minimize losses...

to give u a general idea about how to place ur stop-loss...
when u decide to enter a trade, u can use closest support n resistance levels, which in ur case the boundaries of the shape or the pattern which already broken out signaling ur entry...

make sure to aim for 2-1 risk-reward ratio... so that if ur win ratio was only about 34% u will break-even,,,

Good luck :D

You will lose all your profits I gaurantee it.

Not because I am being negative, as I will make consistent returns from here on out; but more importantly, you dont really know what you're doing. You've just said it.

I'd take your money out and enjoy it, come back once you've developed a system where you understand 'random distribution of outcome' and expected win streaks and losses.

You can argue with me all you want, I am not interested. Mark my words, you'll remember this message if you continue trading the way you have been 'luckily' as you have said...

Hi Mylin,

You have made a good work and i tell you congratulations. From what i can read in your post, i think that you are a new trader.

Well your fear might lead you directly to a margin call and indeed you should deal with it very seriously and carefully.

These are some of the most important reasons for fear while trading :

1 - Not having a clear and pre tested strategy. What i mean here is that you need to have a written strategy.
2 - In case you have a clear strategy, then you just simply don't trust it.
3 - I think that you don't have a trading plan ( like a business plan ) Which will tell you what are your targets and how you should achieve them
4 - One of the most important point is a money management policy. If you have a clear money management policy then you don't have to worry about the losses that might occur because if your R:R is 2:1 or higher, then you can lose 50% of your trades and will still profitable ( You should know that making 1 to 2% a month will put you at the high of the trading industry)
5 - The problem might be the confidence in yourself. You might lack confidence in yourself and you should work on this point.

N. B : If you don't put stop losses, you will get a margin call and you will make of yourself a minnow so the sharks can eat you. Why i am telling you so ?? Just remember the 7 July 2005, The terrorist attacks on london . The trading statiosn stopped working and nobody was able to close the trades which resulted in a lot of marging calls while those who had a stop loss, it was triggered. Remember the EUR/CHF ( november 2011 ) 1200 pips in just 1 minutes, those who had not stops, got killed. Always use stop losses and not very tight so the big sharks don't hit them.

Watch out when you trade and don't risk more then 0.5% on a trade as you are a beginner. Forget all the hype and scam of the get rich quickly and manage your account as pro.

Say to yourself that having an account that is making between 12 and 15% a year with a drawdown of no more then 5 to 7% is extremly excellent and having such a record for only 2 years can make you get hired in the best banks and companies in the world.

Trade well and stay safe. Good luck.

Tradingexpert.

Interesting.. I just read an article, 'The tale of three traders' from Tim Morge... the third trader.. reminds me of your dilemma. Read it.

https://www.medianline.com/articles/A%20Tale%20of%20Three%20Traders.pdf

Thank you ! That is really helpful. I am doing things very differently.. Sorry for giving a detailed version but just want to know if my strategy is correct well workable...

1) my starting capital was 80 pounds - I decided to trade currencies with low movements such eurgbp, usdcad, audgbp.. I put on a trade with stop-loss at of 40 pounds simply using DMI/ADX - in the event of loss I would have lost 40 pounds

 2) That trade became a winning trade and soon I was at 40 plus total capital at 120. I put on another trade in the same currency with a loss of 40 pounds again and shifted my other stop-loss up 40 points - in the event of loss I would have still lost 40 pounds.

3) That trade became winning trade again. So I put on another trade and kept doing it until I had a net min profit and then I stopped putting new trades I just started shifting my stop-loss and locked minimum profit.

4) Then I put on a new trades on some other currency and did the same using dmi/adx. I was lucky enough to be right this time too. So I put on new trade again. So i am currently trading three currency pairs.

I might loose my current profits by if trades hit their stop-losses (in which case i still make profit but not as much I have currently). For example if my stop losses are hit I will be at 250 from current 600 but still up from my starting capital of 80... I dont want to move the stops closer because then I might lose the future profit potential. How do I decide when to take profits or when to let the profits go... as my profits are constantly moving. Hope this is clear?

quicksilver that was awesome .. ! Thanks a ton!

Thanks quicksilver.. just saw your post - reading it now

any feedback on the strategy guys?

what u r doing is a well-known way of trading they call it scaling in and scaling out of a trade, the problem is u r risking 40 out of 80 GBP, it means 50% per trade thats too much!!!!

hmmm about when u should take profit n stop moving, this is a debatable subject... some traders prefer to assign take profit level before entering a trade ( advantage: not to let emotion to interfere, n making the system much more mechanical system)...
some traders manage their take profit n stop loss as the trade progress they call them hybrid traders,

there are many ways to manage ur take profit as ur trade in progress, i guess some of the simplest ways are... depending on the market volatility.. or by using some indicators like:
1. parabolic SAR.
2. 2 moving averages ( fast n slow) n watching for the cross between them...

i tried to give u simple ideas here...

hope thats help!

This is very risky strategy.
Scale in/ Scale out strategy in other words.
But may be you have good tactic signal for 'get in' and could be good.
If you are in positive resault. But keep in mind that in negative it is quick hard death of your account, your mind, your calm will be flush, your eyes will stop see reality and you will make more mistakes than you think.
One day trend will stop, and at this moment you have to stay with feet on ground. Than next month you can consistantly loss becouse everathing can stop work. Than next month you can be back in ride. But from begin again. And it is very frustrating.
90 percent chance is that without experiences you cannot stay alive.But there is no other way to get experiencis. So Keep good works.

elerik posted:
This is very risky strategy.
Scale in/ Scale out strategy in other words.
But may be you have good tactic signal for 'get in' and could be good.
If you are in positive resault. But keep in mind that in negative it is quick hard death of your account, your mind, your calm will be flush, your eyes will stop see reality and you will make more mistakes than you think.
One day trend will stop, and at this moment you have to stay with feet on ground. Than next month you can consistantly loss becouse everathing can stop work. Than next month you can be back in ride. But from begin again. And it is very frustrating.
90 percent chance is that without experiences you cannot stay alive.But there is no other way to get experiencis. So Keep good works.

Nicely put! 😎

Ok Thank you!

So, I will do the following:

1. Risk only 1% of capital
2. If my trade turns profitable i.e. moves x pips to my favor I move my stop-loss x pips. x depends on n days market volatility.
3. If it does not turn profitable within n days i.e. does not moves x pips to my favor - I take profit or stop my losses
4. If the trade is already in profit, I take profit when the parabolic sar changes

What do you think guys? Does this sound reasonable?

if i may share my thoughts, but i would like to test the scale in strategy once,i would take some points into consideration, suppose as u said i would risk 1% of capital as max exposure ( in all my trades i wouldnt risk more than 1%), so i entered a trade with 25 pips risk which is already 1% risk of my capital... then the trade went into my favor with 25 pips, i would move me stop loss to break even so that my risk now is zero, right?! but i still think the trend will continue, so if i wanna scale in i will put another trade with 25 pips risk again (1% risk) so both of trades have the same stop loss but for the first the risk is zero n for the second one it will be 25 pips ( 1% risk) n i will proceed with the same strategy... all u wanna confirm in this situation that u have long term trend...

i didnt test that before but i would like really to test it :D

Yes I agree -

1. Risk only 1% of capital
2. If my trade turns profitable i.e. moves x pips to my favor I move my stop-loss x pips. x depends on n days market volatility.
3. If it does not turn profitable within n days i.e. does not moves x pips to my favor - I take profit or stop my losses
4. If the trade is already in profit, I take profit when the parabolic sar changes
5. If the trade is in profit and moves another x pips, then I open a n new trade with stop-loss at x pips.

back test that ... try to take ur profit at pre-assigned level once... then try to scale in as ur point 5... compare both results...