Tiny Trading Account Challenge Day 4
January 11, 2018
Don’t let your losers exceed your winners. It’s a cardinal rule that traders have heard many times and for good reason. Reasons like today when I allowed one good, but poorly executed trading idea wipe out all of my gains from Days 1-3.
On Day 3 of the Tiny Trading Account Challenge I was feeling really good about my progress as I’d already put myself ahead of my planned gains by approximately one day. However, my eagerness to build a cushion to help keep me on track during the inevitable choppy trading periods resulted in me taking on too much risk. I then closed out the trade at a loss at about the worst possible price and reversed directions compounding my overall loss. Fortunately, price consolidated for a number of hours allowing ample time for me to reassess and come to the conclusion that I should have stuck with my initial trading idea. I closed the short trade and reversed just in time to profit from a large bullish move, recovering approximately a quarter of what I’d lost.
Today’s loss is certainly a setback, but not one that’s insurmountable. My estimate is that it will take me until the middle of next week to climb out of the hole that I dug and put myself back on track towards my goal of growing a tiny trading account from $1,000 to $100,000 within a 1 year period of time.
What Contributed to My First Losing Trading Day
- I bought into a bull trap
- I took on too much risk
- I placed too much certainty in price taking the path of least resistance
- I second-guessed my analysis and closed my winning trading idea at a loss
- I reacted to price by reversing my trade and not sticking to my game plan
In the following video I review the Forex trade that resulted in my first losing day of the Tiny Trading Account Challenge.