Eejit's Guide

[INVESTING · FOREX · REAL WORLD]

This is the part of trading people usually leave out. The part where the trade was going well… until it suddenly wasn’t.

Summary

The Trades Were Going Well

At one point this month, the forex side of the challenge was up close to $30 overall.

USD/JPY and GBP/JPY were both moving well.

The trend direction looked right, the setups made sense, and honestly I thought I’d probably got the trades right.

I genuinely believed they would keep going higher.

I was even tempted to move the stop losses up towards break even to lock something in.

But I didn’t.

I thought there was still more upside left in the move.

Then It Spiked Down

Very quickly.

What annoyed me most was how aggressive the move was.

Normally these pairs might dip around 0.5–1% before continuing.

This move dropped over 2% in a very short space of time.

Stop losses got hit almost immediately.

And then came the worst part.

It started bouncing back up afterwards.

Not massively below my stop loss either, which somehow makes it more annoying.

Watching Profit Disappear Feels Different

I think this is the part most trading content leaves out.

Losing on a trade is frustrating.

But watching profit disappear before taking the loss feels worse somehow.

It’s like losing the money twice.

• first mentally counting the profit already made
• then emotionally watching it disappear
• then finally taking the actual stop loss

That’s probably the hardest psychological part for me personally.

The Temptation To Jump Back In

I was very tempted to open another position almost straight away.

The move down had been so aggressive that it felt likely the price would bounce back quickly.

And honestly, I still believed the original direction was right.

That’s what makes it dangerous.

Because sometimes that thinking is correct.

But sometimes it’s just emotion trying to recover the loss immediately.

This time I held off.

A few years ago I definitely wouldn’t have.

I probably would have:

• opened another trade immediately
• moved the stop loss further away
• or tried to average into the position

That usually ends badly.

The Stop Loss Still Did Its Job

Even though it annoyed me.

The stop loss prevented a much bigger loss.

I lost around $25 instead of potentially losing $50 or more if I’d started interfering with the trade.

That’s the annoying part about good risk management.

Sometimes it still feels bad even when it worked properly.

Looking Less Has Helped More Than Expected

One thing that has definitely improved recently is spending less time staring at the app.

I’ve realised there’s very little I can actually do once the trade is live.

Looking at the screen constantly doesn’t magically make profits increase.

If anything, it probably makes emotional decisions more likely.

The more you watch every movement:

• the more tempted you are to interfere
• the more emotional the trade becomes
• the easier it is to abandon the original plan

I think sticking to a system only really works if you actually allow the trades to play out properly.

Final Thought

I still think the original trade idea was right.

But that doesn’t really matter if the stop loss gets hit first.

That’s trading.

The important part for me this month wasn’t the profit or the loss.

It was not reacting emotionally afterwards.

That’s probably the first time in a long time I’ve managed to do that properly.

Watching profit disappear still annoys me though. I don’t think that part ever fully goes away.