I have been trading for several years now and have only started to take it seriously in recent times. Whilst I have had a decent 1st month scalping the 6E, I am currently experiencing a significant draw down and have done a total review of my trading and the mistakes I am making.
This sets the premise for creating this online journal. I have been diligently journalling on OneNote, but have realised that my mistakes resurface on a consistent basis. This is hindering my progress as a trader and I hope that with the creation of this journal, it will make me more accountable for the mistakes I make as I do not want to look like a fool in the public sphere.
My scalping system
Timeframe: 100 tick chart for execution
Target: 6 ticks (1st target), 2nd position as runner
Hard stop: 6 ticks (this is my hard stop, but I will try to get out of the trade at a lesser loss if I think my edge is gone)
To put things very simply, my trades are extremely short term (an average of 3 minutes or so). My entry criteria is two fold. I utilise a simple moving average crossover to initiate entry (on the 60 tick chart). My bias is filtered with a 2 Range chart with a Guppy Moving Average on top of it. I use basic price action to determine where and when to scalp. It is an extremely simple and efficient system plagued by mistakes from the trader.
My Mistakes
My largest psychological trigger is due to rapid price action
I have identified rapid price action as one of the biggest reasons I falter in execution. When there is rapid price action, I realise that my emotions heighten as I am extremely fearful of missing the move. Thus, in my trading, I plan to STAY AWAY from all relevant news releases, 5 minutes before and after the release. Most of my losses have come from mis-trading rapid price action as I abandon all my rules seeking instant gratification. This is something that I have to constantly note and avoid.
I sometimes pre-empt the MA crossover, which leads to unnecessary losses
This is something a little more subjective. But I have realised that as I am only taking 4 ticks out of the market each trade, the key to having a high win rate is TIMING and not PRICE. This means that I rather be LATE and WITH THE TREND than EARLY to secure a better price. The key behind my system has to be a high win rate. Yet I realise that I am so anxious to secure a good price that I pre-empt my own trade signals. This is certainly a costly mistake that I hope to eradicate.
Even though I have a trend filtering mechanism in place, I still am persistent with taking the counter-trend
While I do have a rule to take a counter-trend scalp (when there is a double top/bottom formation and signal manifest for a CT trade), I find myself taking too many counter-trend trades when all I should be doing is to take scalps in line with the trend for maximum expectancy. This is another issue that I have to address ASAP.
Overtrading
The final mistake is a cumulative effect of the prior mistakes. By adding up all the mistakes I make, the end effect is that of over-trading. It is not uncommon for me to be able to execute 10-20 GOOD trades a day, but the emphasis has to be that of "GOOD". When I have a bad day, majority of the trades do not fall in this category. I will not set a limit on the number of trades I take a day as that will be counter-productive, but I will be measuring the number of trades I take that DO NOT follow my rules, for that is essentially what I seek to fix.
I hope that in the course of journalling, these mistakes would be ironed out and I can slowly improve as a trader.
I usually trade the European session and sometimes the EU/NY crossover.
I understand that this introduction is brief and I will be filling in information when required.