Accountability and Reassurance

Trading this month has been rough. I'm up, but it's still rough. Specifically, I'm up a lot on the gold trades that I took early in the month and then slowly gave back the profits on subsequent trades that didn't pan out. There are a few reasons why they didn't pan out, which I'll get into a bit later.

As a consequence of these trades not panning out, I've finally made the bullet to use a proper journaling software. I purchased EdgeWonk sometime last week and got it set up.

I think this is a critical step in my development in order to stay accountable. It's not so much to keep track of my stats (i.e., win/loss ratio, win rate, reward to risk ratio, etc.), but rather for accountability. While I've drastically reduced the number of questionable trades undertaken, they still come up once in a while. I think the reason is that I still have a tendency of trading on impulse or the fear of missing out.

How EdgeWonk solves this problem is that it holds me accountable. With every trade that I take now, I have to go through the process of explaining it. Specifically, I enter notes that utilize analysis on at least two different timeframes and I attach a minimum of two charts.

For example, this was my explanation for a recent CADCHF trade that I took.


While this trade didn't pan out, you can see that I went quite a bit in-depth into my reasoning for taking this trade. The notes might not make sense because I referenced another CADCHF trade I took just a bit earlier. The trade didn't pan out so this was a re-entry on a slightly different price level and signal.

Over on the "Advanced Trade Data" tab, I have attached two charts.


I make an effort to attach two charts per trade in order to hold myself accountable in the sense that multi-timeframe analysis was performed.

My initial thoughts on EdgeWonk is positive overall. I think this is a great tool to me keep me accountable and have a more quantitative view of my performance. I've noticed that I took less trades, or less trades were taken on impulse. I've been going through the thought process of each trade more and more.

This leads to the second half of my post - reassurance. Psychologically, I've been struggling a bit for the past two weeks. I've been on a bit of a losing streak where certain key levels that I've been closely watching haven't been playing out well. While not all trades were losers, I can say with certainty that a majority of them were.

Typically speaking, a low win rate isn't problematic. It's entirely possible to lose 4 trades in a row and get everything back on the 5th because of the high reward-to-risk ratios in place. Unfortunately, having a few losers does change your mentality a little bit. For me, I have a tendency to be a bit more protective of the profits earned on any trades that have turned a profit.

This does have consequences, which I can highlight via this EURUSD trade that I took. Before I do, let me explain why I'm attaching a TradingView chart instead of my broker's chart in EdgeWonk.

EdgeWonk does have a trade planning feature. However, I find that it's too technical into setting entry and exit numbers. I publish ideas on TradingView when I identify major opportunities. Unless I make a note in the comments saying that the trade setup is preliminary or that it's being monitored, I do take a position on these ideas. What's great about TradingView is that it shows you the chart setup at the time that you published the idea and you can hit the play mode in the future to see how this idea panned out.

Playback is more advantageous to me as I can view what I could've or should've done depending on how price moves. Without any further delay, here's my EURUSD idea. Here's the link.

At the "#2" mark, that's where I planned my entry in my actual brokerage account. After the initial wave up and then down, that's where I closed out my trade. This was just a bit above breakeven because I feared returning my profits and absorbing a loss. It's foolish of me to think this way as I already listed sound analysis into my bullish view. Consequently, I didn't capitalize on the larger reward to risk ratio needed to compensate for my other string of losses. I realize this is psychological, especially after experiencing several losses.

EURUSD 1-Hour

There's not much I can say about this other than that it's something I'm working on. As a bit of a reassurance, I've started playing poker again. I took a bit of a break this month, which I believe also affected my trading mentality.

Today, I did my standard multi-tabling of eight SNGs. While these stats are based on quite a small sample size, I did find a bit of reassurance in them. I got paid out on over half of these SNGs and my stats consisted of a low flop rate (under 15%) and a high showdown win rate (over 80%). This reassures me and, more importantly, reminds me of my trading style.

I'm not a scalper. I'm not looking to pick up chips here and there. I enter in play when the conditions are right, specifically the hand that I'm dealt and the seat positioning. I'm able to be patient and wait for the right moment. This is, admittedly, something that I still struggle with in trading. When I'm not in a position, I feel like I'm missing out. This is especially so when I observe others posting gains on trades that I never took.

However, I need to reinforce myself on a few points:

  1. They're showing winners, not losers. They could show a huge win, but they could be hiding a huge loss as well.
  2. You know yourself better than you know them. Focus on your strengths and trade with those strengths. Just like my gameplay, I can afford to be patient since, after all, more trades does not equate to more profit.
  3. I know that scalping and low timeframes do not work for me. I have a hard time filtering out the price action in the noise and I just have never been successful with it. Why should I keep trying to trade in these wild swings instead of waiting for larger accumulation and weakness in larger timeframes where I do better?
  4. Can't trade without money. It's better to sit out rather than making a sub-optimal entry.

On a final note, to apply takeaway I got from Scott Adams' book that I recently finished, here's my updated system:

  1. Trading-Mentality continues to document my thought process, trade highlights, and personal development.
  2. TradingView continues to be my tool for planning trades.
  3. EdgeWonk will document the actual trades undertaken for accountability.