Nowler's Trading Journal

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Old Sep 26, 2017, 9:11pm   #1
Joined Sep 2017
Nowler's Trading Journal

Hello fellow traders!
My name is Gavin and there are a few reasons that I am writing this journal.

1) To document my journey from new trader to... dare I say it... to a trader making a modest but comfortable living.
2) To facilitate learning (my own and yours)
3) To get constructive criticism (I like criticism, but ONLY if it's followed by a solution/alternative)

As a new trader (Forex and a few commodities) I have been profiling what seem to me to be successful traders (but not exclusively very wealthy traders), trying to find commonalities and then comparing these to myself and then working out what I need to adapt to. Therefore, in order for new traders who read this to know who I am I'll give a little personal background information about myself (upbringing and what led up to trading) and then my trading stats so far, my favourite forms of analysis, and my goals/targets and whether they were a success or failure. Transparency is assured and if you require any further information then I will be happy to provide it, within reason of course.


A little background on myself:
- I am a 30 year old lower socioeconomic male who grew up in a volatile single parent home

- I've had quite a lot of torment in my life and had difficulty in school too, eventually leaving early at age 16

- I spent the years between 16-20 going between construction work and unemployment (busted hip - replaced).

- At around 20 years of age I began to "mellow out" a bit and decided to pursue personal and professional growth; becoming a qualified fitness instructor and soon after a mental performance coach.

- At 26 years of age I decided that a bachelors in psychology was right for me and in 2016 I graduated (Note: in Uni I found out I was dyslexic) but have been largely unemployed since then (pushing 2 years), picking up a little construction work here and there (welcome to unemployment after university lol).

- Since I was finding it so difficult to get a job with just a Bachelor's in psychology and couldn't pay off my current student loan quick enough in order to get another one to complete my masters in a reasonable timeframe, I was forced to reevaluate...long story short, I was seduced by the world of trading, not just because of the money, but the freedom to roam. It seems to fit perfectly with my nomadic and minimalist mentality. The freedom with a modest income means more to me than being very wealthy a tied down. No interest in having kids either... I would go demented if I had to look after a kid for more than 24 hours




Trading Background Info:
- I have zero experience with business and economics

-Hated maths in school where I did foundation maths at inter/Jr. cert level (at age 16 for those of you who don't have the same education system) but learned statistics in University- average results in my stats exams

- The first time I heard about trading was about 5-6 years ago when my friend was trying to explain this new thing he was looking into. I had no interest and totally forgot about it until about 5 months ago.

- To be completely fair with myself, I have put in a lot of time researching trading. As I am largely unemployed I have plenty of time to spend learning. And that I did.

- I mainly watched video tutorials because my most efficient form of learning is a blend of verbal with visual aids. I will read, and do, but my reading comprehension is not good and would find myself needing to read the same line 4-5 times before I grasped it. Whereas with the verbal/visual method I soak it up quickly, especially if I can attach myself to it in someway.

- I will listen to almost anyone about trading if they give me the impression that they are worth listening to but I will not believe something unless I see evidence for it. Being highly skeptical has improved my life significantly and I implore new traders like myself to adopt the same skepticism.



The people/organisations I have been learning from (all free):
Keep in mind that I have a sort of rule where I will only stay learning from one person for a limited time. This is to avoid idolising them and making fatal errors of judgement. I may go back in the future, but I remain as objective as I can.

Some of the material that noticeably influenced my trading (some of which I have now disregarded as being maladaptive to my personality or incorrect, but still helped to get to the next stage) included that documentary where Lex Van Dam took in a few non traders to see if he could make them into profitable traders in a short space of time. I've also learned a few things as a novice from watching youtube videos from the likes of Warren Buffet, Anton Kreil, Ukspreadbetting (I only recommend the youtube channel with any of these), Trading 212 videos, and just a general browse around stumbling across useful individual videos.

I have read a decent amount from the Investopedia website and sometimes they even have animated videos explaining things to me I set up a Twitter account too and only use it to follow a small number of people/organisations; ECB, FED, BoE, BoJ etc... and a handful of people I have deemed worth listening to (but not always agreeing with). The Wall Street Journal, The Economist and RT also. I like to get a wide variety and then I do my best to filter out the crap and conspiracy theories. I will occasionally read some of the comments to the aforementioned Tweeters just to get a general consensus/sentiment.

My broker provided some educational webinars and educational tools/features on their trading platform (but all the while remembering that they have a conflict of interest as market makers). I literally soaked up as much as I could and loved almost all of it! As I said earlier, I am largely unemployed so have plenty of time to dedicate to this. While I do sit down specifically to work at/learn things, I will wander around...listen to a few songs, watch an episode or 2 of something, etc... so it's not like I have a set timetable for learning/trading or am super strict with structure. I am however thinking about trading and new information quite a lot, even if only for a moment or two; when I'm eating, showering, relaxing.

It's become more of a way of life now as opposed to being seperate. Something totally unrelated will spark an idea in my head too and then ill write it down and find out the answer asap. I highly recommend that you have a pen and small note pad on you at all times! I was told this over and over and over... I knew that there was a decent chance that it would be useful but I still procrastinated until about 3 weeks ago when I began to write things down. Trading terminology I don't understand, a question that popped into my head, an idea I have about a strategy etc... Write it all down! Even if it's only a few key words. I now even have a nice hardback that I write each trade into (most of the time). It has already helped me to ensure I run through a mental checklist at least before I enter a trade. I also have a notepad that I typically use on a Sunday when scouting for day/swing trading opportunities during the coming week (including corrections to my analysis during the week itself) and another notepad for brain farts and scribble work. You may not need as many pads as I do... but certainly use at least one!




Trading Stats:
- Tried Options and basically gambled on nothing other than guessing - lost €70 in under 2 weeks.
- Opened a demo with Oanda on May 10th, 2017 @ 21:35 ( - placed my first demo trade @ 21:42 on the NZD/CAD (Short) and closed it 2 mins later
- Opened my live mini account with €20 on the May 19th (9 days after opening demo)
- Leverage has been 50/1 since then
- Apart from a little beginners luck I was slowly but steadily losing money. By the end of month 3 I was down to 42.5% of my account (spread over plenty of trades though)
- Got it back to 62.5% over month 4 which brings me to yesterday.

Note: My reason for jumping to a live mini account only 9 days after opening my demo account was the realisation that it's not representative of trading with real money. I didn't see much point pretending that I was trading only to be slapped in the face by reality when I started to put real money on the line. As mentioned above, I do have a little psych education so I was already aware of the mechanics behind some of the thing traders have to battle with. I was ready to take on that dimension of trading education while also learning the dimension of chart analysis.

I still have rookie impulses (albeit fewer and fewer as time passes) and woke up yesterday "morning" after losing 15% of my account on a Brent Crude Oil trade. I hope your alarm bells are ringing when you read 15%? Before you give out to me, let me explain.

Since I am only using a mini account I am pushing my boundaries, seeing what works, what works for a while, and what simply doesn't work at all. I had been increasing the amount of capital I risked bit by bit with each subsequent winning trade (back to 1-2% if I lost a trade). I was up to about 10% of capital per trade at one stage but only because this is a mini account. I don't want to experience failure, but if I am going to experience it then let it be under controlled conditions (mini account and always using stop losses and take profits). When I see what doesn't work or isn't sustainable I'll drop it before I transition to a big live account. I use this mini account to practice the practical and psychological side of trading. I am learning invaluable lessons and I am being hyper critical of myself. I have not encountered a single bad trading situation where I didn't learn anything from. It's all hands on education.

While I am comfortable with risk I quickly identified ways of managing it. From almost the very start of my live account I adopted a decent risk management strategy. I realised that if I limited my risk to 1% of my account then I could make 99 more mistakes before I was out of the game. This allowed me to comfortably try out various strategies, knowing that my stops were in place and protecting me from catastrophic damage. Almost 5 months later I still plan my trades, apart from the declining impulsive gambles which I am successfully addressing. When I place a trade I already have my stop and take profit planned unless I have a valid reason for not doing so (eg. direct hedging with another account etc...)

I don't know what type of trader I am yet.As I said, I am less than 5 months into it at the moment but I think I'm a day trader foremost, then a swing trader second. I do not particularly like to have trades running while I sleep but nowadays I can sleep fine, so it's "ok". At first I was a nervous wreck! I do however prefer to close out all my trades before bed.





Operating System:
- I mainly just trade from a laptop and use the mobile app to check in on or modify a trade if I'm away from the laptop. I do sometimes connect an external monitor to my laptop and put my trading platform hub on 1 screen (so I can always see the core of my account) and carry out analysis on the other screen.
- I also use my phone and tablet to carry out any research needed (sometimes the laptop too but id like to stop using the laptop for anything other than trading).


I cannot remember some of the specifics from the first month or 2 but below are my objectives during the first 4 months.


Starting goals/targets:
- To learn how to trade well enough to assess whether money can actually be made.

Result: Seems likely - With careful money and risk management one can certainly make money trading (I'm trading Forex and a few commodities). More trading time needed to be sure.


Month 2 goals/targets:
- To make money!

Result: Failed - Couldn't turn over a profit in month 2. More practice/study needed. Noticed that I am able to make winning trades but that my losing trades outweighed the winners. Must filter and only take the higher probability trades.


Month 3 targets:
- To stop turning over a monthly deficit
- Reduce the win/loss ratio to even or in favour of wins.

Result: Mixed Results - Did manage to significantly slow the rate of declining capital due to learning the basics of trading but still lost money this month. As far as reducing the ratio of losses/win, this was huge success! I went from around a 30% win rate to about 60% due to cutting out (as much as is realistic for a newbie) gambles on gut feelings and also employing Autochartist market scanner to identify opportunities with at least a 70% probability rating. Note: I was not only relying on the market scanner. I had been trying out all the stuff I was learning. It was around then that my macro economic analysis was improving and I was able to identify possible trades based on things such as inflation, interest rates, economic statement releases. I was however giving the market scanner a bit too much credit when it identified a trading opportunity. I would take a lot of the 70% probability trades it would identify, not carrying out enough of my own analysis. This resulted in a hit to my win/loss ratio.


Month 4 targets:
- To stop turning over a monthly deficit
- To further improve on my win/loss rate
- To only take trades that offered at least a 1:1 risk/reward but preferably more

Result: Successful - Managed to bag a bit of growth this month due improving on my understanding of chart and macro analysis. Managed to further improve my win/loss rate simply by educating myself more. In regards to the market scanner, I only considered opportunities which the market scanner rated as 80%+ and I would also only take the trade when my own analysis matched up. Often I would place my take profit target a little lower than the market scanners target after frequently missing out on profits due to price slightly missing out on the target. Only taking (98% of the time) trades with at least a 1:1 risk/reward is a huge factor in turning over a profit this month. Many of my trades were more than 2:1 which meant that I could in theory only win half of my trades and still turn over a profit.


Month 5 target:
- To increase my capital risk size per trade (mini account of €20) and push the boundaries in order to see what is possible.






This is all I have time to write at the moment but I will come back tomorrow and add more so that we are totally up to date and will only have to pop in once a week with an update and then the result at the end of each month.

Last edited by Nowler; Sep 26, 2017 at 11:36pm.
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Thanks! The following members like this post: IceMan
Old Sep 26, 2017, 9:26pm   #2
Joined Sep 2017
Nowler started this thread Transparency is very important to many people, so here is verification of my account details (eg. creation date and balance)
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Last edited by Nowler; Sep 27, 2017 at 12:03am.
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Old Sep 26, 2017, 9:26pm   #3
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Nowler started this thread Post 3 reserved for future additions/editing
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Old Sep 27, 2017, 1:40pm   #4
 
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Good luck
Maybe have a look at the new video section I started and contribute some more too ?
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Old Sep 28, 2017, 12:20am   #5
Joined Sep 2017
Nowler started this thread I was going to add some stuff to my original post but for some reason I cannot edit it anymore. Maybe I used up all my edits yesterday with all the typos, haha.

Anywho...

The sort of analysis I typical run before a trade is difficult to explain because it's not strictly defined yet. I am not Picasso, nor did I pass art in school (or maybe I did...who knows!) so I do not draw all over my charts.

As standard my charts include:
- Candlestick charts
- Simple MA's (10, 20, 50 and 100) (truth be told I don't actually use these much anymore)
- MACD (12, 26, 9)
- Bid and Ask price lines ( helps with setting take profits for scalps/short-term trades)
- Little icons below the chart which let me know when there's economic news
- My cursor projects a horizontal and vertical line
- Trendlines are set to project out to the edge of the screen
- Dark background so that it's easy on the eyes during long periods in front of the screen

My analysis depends on the type of opportunities the market is offering me. I am trying to get into a strong habit of sitting down on a Sunday and work out where the best opportunities will be in the coming week from the macro side of things. I am basically looking for strong and weak currencies (Forex trader) and then trade the strong/weak pairs, looking for opportunities to the side of the stronger currency. When working out a few weak/strong pairs I am also looking for important news/economic statements being released. I will look into those and work out whether I can increase the probability of get the direction right. Also worth noting, I get alerts to my phone when the news is soon to be released as well as alerts about various other happenings in the market.

Once I have a rough idea of where to look, I then look for setups in the direction of the pairs that my analysis led me to believe.

When looking for setups I am using things such as:
- Support and Resistance
- Triangles (particularly those with a horizontal line)
- Fibonacci
- Identifying key areas with trend lines (channels)
- Reading the story that the candlesticks are telling
- Waiting for retracements in strong trends

When I see potential setup, I will look to my MACD to check that there is momentum behind the move. I'll also take a trade if the candles are printing a new high/low, but the MACD is not doing the same (divergence).

I also use Autochartist market scanner which I can filter to scan the market for 80+% opportunities. I then will check those out and if my analysis agrees with it being a decent opportunity, then I'll take the trade. Putting in my take profit and stop loss either immediately or within seconds (stop loss is typically immediately).

I initially was only risking 1% per trade which as I mentioned in the first post was great as it allowed me to try out a lot of things with the comfort of knowing that if it went wrong that my account was still strong. Then during all of the experimentation I decided to start increasing the capital put on each trade, getting up to around 10% or so per trade. Apart from my silly impulsive mistakes, this went well. I made 20% in a week and then 11% the following week (obviously i'd need to do that for longer before I would consider doing it in a big account.

This week hasn't really allowed me to trade much (bad internet, visitors, headache) and there's only 2 days left so I doubt i'll do much trading til next Monday.

My goal for this month (month 5) is to increase my capital risk size per trade (mini account of €20) and push the boundaries in order to see what is possible. I had unofficially set 15% per week as my target but I think I will bring that back to 10% per week and see how that goes. Obviously we do not win everyday, so when I say this, I am keeping that in mind... but from what I can see, I feel I could make on average 2% per day x5 days (10%/week).

As a matter of fact, what do you folks think about me aiming for 10% per week?
I will not try to force it obviously. If the trade isnt there then it isnt there... I'll class anything over 5% as a successful week.


I was doing some projections (with increased risk trading- around 5%/trade) to see what sort of money could be made by making 5%, 10% and 15% per week and only taking out 10% of the month profits.
While the 5% doesn't look great, the 10% would be awesome!

My calculations may not be right, so check it yourself if you are going to use this for yourself.
I made a mistake when calculating month 1 (damn dyslexia - got 2 numbers the wrong way around), so for that month we are just taking out €46, not 10%. I only noticed the mistake after I had finished and rather than redo it all again, it's easier to just take €46 as my wage for month 1...

- Starting Capital: €1,000
- Growth Aim: (10%/week OR 2%/day)
- I only get paid 10% of what I made that month and 90% goes back into the account

By my calculations (and only taking €46 in month one) my 10% monthly profit wage isn't worth talking about until around month 9, by which case is what I get now on disability/unemployment benefit.
If I waived my 10% wage for the first 5-6 months then I would be able to come off of disability benefit sooner.

The beauty about being so poor is that €1000 per month is a decent wage.

I dont know if 10% per week is possible with a good level of consistency but I will try it. If it doesnt work, what harm? I reevaluate and go again. Maybe later down the line we are all looking back laughing at the time that I suggested making 10% per week
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Last edited by Nowler; Sep 28, 2017 at 2:15am.
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Old Sep 28, 2017, 2:15pm   #6
Joined Aug 2015
Hi Nowler, that's quite a detailed introduction there. You remind me of myself regarding the reason for trading and also your being so detailed.

Do you have a trading system? I didn't see anything like that in your post. With trading system I mean a specific setup that needs to be triggered, a specific entry and exit point + stop loss etc. If you are just trading based on the current knowledge you have you will always be trading differently and you won't know what works and what doesn't work. A second disadvantage is that it's very easy to let your emotions influence your decisions that way.

Edit: Nevermind, I somehow missed the last post. Make sure your system is detailed and that there is very little room for interpretation. After you made a statistically significant amount of trades evaluate it and tweak where needed, or throw it away completely if it's a disaster. Rinse and repeat until you have something that makes you money.

Last edited by DrSafari; Sep 28, 2017 at 2:25pm.
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Old Sep 28, 2017, 3:48pm   #7
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Quote:
Originally Posted by DrSafari View Post
Hi Nowler, that's quite a detailed introduction there. You remind me of myself regarding the reason for trading and also your being so detailed.

Do you have a trading system? I didn't see anything like that in your post. With trading system I mean a specific setup that needs to be triggered, a specific entry and exit point + stop loss etc. If you are just trading based on the current knowledge you have you will always be trading differently and you won't know what works and what doesn't work. A second disadvantage is that it's very easy to let your emotions influence your decisions that way.

Edit: Nevermind, I somehow missed the last post. Make sure your system is detailed and that there is very little room for interpretation. After you made a statistically significant amount of trades evaluate it and tweak where needed, or throw it away completely if it's a disaster. Rinse and repeat until you have something that makes you money.
Hello Sir!
Thanks very much for the feedback.

I often find it difficult to explain things to people (probably due to dyslexia) but very often I understand it in my head, it's the transition from thought to explanation that struggle with. Which in this setting doesn't matter that much because as long as I understand, that's half the battle.

I am still lacking quite a lot when it comes to trading lingo, but I believe many would class me as a "Discretionary Trader"? I understand that many people take a particular system or set of criteria and look only for that in the market. While I wouldn't try to convince that person otherwise, I just don't like it. I do understand the benefits of such an approach but just like in life, I don't want to tie myself down. I do have a strategy, but it's more of an encompassing strategy as opposed to a narrow and specific one.

I fully realise the elevated risks involved with discretionary trading as opposed to a set narrow strategy. Discretionary trading requires more self-control and opens such a trader up to making more psychological errors than someone with a specific plan.

Where some people focus on finding and perfecting a good tool to which they scan the market for opportunities suited for just that tool, I on the other hand have been spending the past 5 months adding multiple tools to my tool belt. In my head, this means that no matter the market behaviour, 1 of my tools should fit the job.

Where many people look for their 1 setup in a market, I listen to the market and see what it's offering. For example, I know that markets are ranging something like 70% of the time. This means that the majority of the time, the tools I will need will be for ranging markets, For example; channels and triangles would be what id be looking for then. Perhaps mean reversion for channels and then breakouts for triangles (and channels also).

So if markets are ranging 70% of the time or so, then they are trending around 30%. Tools I would be looking to employ in a trending market would be pullbacks on trends (getting in with a beautifully defined risk) and Fibonacci retracements/extensions.

On top of all of this, I try to have somewhat of an understanding to the state of said currencies. This adds further confluence to a potential opportunity. Also, having a bit of an understanding of the health of a currency allows more opportunity when I see important news is about to be released.

This is the current plan anyway and as you said, gain a statistically significant data set to work with and then see what does and doesn't work. I am constantly questioning myself and my trading decisions. It doesn't eliminate all the bad decisions but I have see a huge difference, for the better. I realise that I will not win them all. I realise that some days/weeks I will lose money. I realise that I am not a god. I just try to keep pressing that refresh button in my mind and take each new trade as it comes.

Hopefully it works out!
Maybe someone might even offer me a job if they see that I can make consistent returns on investment.

Note: The rules I have which are present is any trade I take is: Always have a stop loss (normally a take profit too) and get in when there's still value in the move, checking MACD to provide confluence
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Old Sep 28, 2017, 4:00pm   #8
Joined Aug 2015
Ok, fair enough. As long as it's a deliberate choice of being a discretionary trader which it obviously is. I still wouldn't recommend it for someone new to trading but we all have to walk our own paths. Maybe you will overcome your sense of being tied down in favour of the advantages of using a well defined system... or not and you will be succesful being a discretionary trader! Either way, I wish you the best.
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