747 - Trading in the zone

I finished reading 2 great books, reminisces of stock operator, and trading in the zone. Both books really gave me tremendous insights into trading. They are recommended by an expensive course, which I did not go.

Just a few minutes ago, I completed trading in the zone. Some of the great knowledge I learnt:

• Memories are like energy. When something bad happen to us, we will register it in our brain. When something reminds us of it, it will generate negative energy. 
• Like say for example, I fear the dark a lot, due to the many impressions of it from horror movies. However, this negative energy can be diminished, if I dare to face it step by step, or for the brave, a big bold step.
• Memories cannot be forgotten, but energy can be taken away from it (negative experience) to make it docile. The energy can be transferred to something more positive, like the joy of enjoying a good night sleep.
• Mainly, the book talks about the psychological factor of trading, due to fear and greed. And the psychology he teach can help you to counter the negative energy accumulated from trading. Trading should not bring you any bad energy, but only operating objectively and creatively.
• In terms of trading, think in terms of probabilities. Act like a casino operator.
• Trade in sizes of 3 lots, and take profits along the way.

Overall, although I feel that I am not very emotional when it comes to trading, I feel that this book is a must read for all traders. It is really different from the same bullshit in other trading books, and really opens up my mind.

747 - just some thoughts

when to start : 
Look out for support/resistance zone, look out for Candle signals (pins, engulfing)

when to stop : 
Look out for the next support/resistance zone, place Stop Limit before it, in case the trend continues.

747 - what could have been

My previous trade (long), which I set the Stop Loss too high.
The Stop Loss should have been below the support zone.

747 - both failed

Longed the above, but re-adjusted stop loss too high

Long the above, the stop loss is set below the support zone, which is ok

The morale of the story for the first graph, set the stop loss below the support zone. Respect the zones. It is important to trade from zone to zones. Stop loss before a zone. Limit stop also at a zone.

764 - same trade, different perception

Enter the trade.
It is on the supporter zone.
It has a bullish engulfing candle.
So there is better probability that it might be bullish.

Added Stop below the more common support zone.
Added Limit before the next obvious resistance zone.

765 - so

So, what can be my edge?

Looking at charts again, the more stable edges are still resistance/support, coupled with price actions. The long pins and also big engulfings.

They have a better probability of an expected outcome.

I will switch to 4 hour candles, and trade more often, and hold trades for a shorter period of time. To shorten the duration of my trades, I will be trailing it, and taking profit when it moves strongly the other way.

763 - what is my edge?

From the book (Trading in the Zone), it emphasizes a lot on your internal battle. 

It said that you can have a simple strategy, and still be profitable, as long as you are emotionally stable.

So the question which I have been searching it, what is my edge?
What is something that happens more often, which has higher probability of happening?

782 - EUR/USD closed

I was long on EUR/USD.

So whats the lesson to learn?
I should have exited at next resistance level (around 1.37).
Not to sell immediately, but just put a Stop Loss, in case it keeps rising.

In addition, as I plan to become a shorter term trader, I should take profits before resistance zone, to skip the battle that will escalated between upward and downward pressure.

Looking back, the 2 previous trades that cost me to lose money are due to not respecting the resistance/support zones.

868 - trading in the zone

Currently reading the book, which just arrived from Fish pond.
The book is better than I expected, even though it is still emphasizing on conquering yourself rather than teaching you new techniques.

But that is exactly what the book is trying to explain. Maybe it is your own mind's psychology that is the most important in trading.

Currently, one of the most awesome thing I learnt is that, if the author has to choose between one person with very good analysis skill, or one with very good mindset but lousy skill, he will choose the latter. You can still earn money if you have a good psychology, and very basic skills.

Fear and over-confidence is the two worst feelings in trading. Good traders are able to control both feelings.

845 - defensive trading

I should not be afraid of trading, as long as I trade defensively. Focus on not losing money, rather than winning money.

Added the trade below.

There is support there, and something like a dark cloud cover there.
Hid my Stop Loss under the support army.

I should also focus on reaching a target, so that I have a sense of direction what I am doing, and trade with a purpose. I figured to myself that if I reached SGD 100k, I will tattoo my forearm. Just like a friend of mine who marks his achievement with a tattoo.

For the win!

907 - how to plant stop loss

Hide behind a resistance/support zone.

Because if price is edging to close you out, maybe the zone will be there to defend you and fight back. It may be the place where many people are planting their Stop Buy to enter the trade, and push the price back up again.