You Win Some. You Learn Some. Mindset is Everything.

Stephen W

I am a Technical Forex Trader & Analyst.

Trading the markets on behalf of Samuel and Co Trading in Watford. I am a Technical Trader, here to take on the game and turn the sceptics into believers. Join my journey as I release weekly technical analysis and trade breakdowns - opening the floor to feedback and conversation.

This week I’m taking a slightly different approach to my article and analysis. I want to focus on the importance of structure and mindset when it comes to trading, hopefully, to also help other beginner traders out there understand the importance of these fundamental factors.

For those that may have been keeping up to date with my articles over the past couple months would know I’ve had a very successful run in trading Oil, which is by far my favourite and most successful market to trade. But what comes with a string of winners also can lead to a false sense of confidence in your trading ability and mindset, especially for beginners. I’m still at the beginning stages of my trading career with only 12months of trading experience and actually only around 8 months experience of live trading. It’s been an up and down journey, to say the least, but I continue to embrace the lessons this lucrative industry continues to teach me.

For anyone who knows me knows I’m a big believer in, “You either Win or you Learn” and this also goes for life outside of trading. In life, we have to take ‘losses’ or how I’d like to call them ‘lessons’ in order to learn and progress as an individual – and trading is no exception.

With a 71% win ratio after 38 trades taken on Oil, it has definitely become my favourite market to trade, main reason being; it highly respects technical analysis and suits the style in which I like to trade. So recently, I decided to attempt trading another market, being, Gold. All whilst believing I could trade it in the same style I have been on Oil – and this, is not the case.

Below I’ll run you through one of my losses (out of a fair few), this one though, was 100% my fault and not the markets; as I went against my strategy rules and criteria and didn’t trust my original analysis – everything I tell other traders starting out ‘not to do’ - which then led to the trade moving exactly where I wanted it to go as originally predicted - I’m sure we’ve all heard of this happening or experienced it for ourselves right?

So Instead of making back profits from previous losses, I ended up giving the market more of my capital. It’s at this stage a lot of traders would give the whole “Trading’s not real, it doesn’t work, it’s all a fugazi” – being the famous words of Matthew McConaughey in Wolf of Wall Street.

However, for me, this is just another hurdle and stepping stone in my journey of learning the skills of a professional Trader. Did the loss hurt? – Yes, it did. Will I let this stop me from succeeding? – No way.. This has just made me more motivated & determined to achieve my end goal and dreams.

I Win. Or I Learn.

So let me run you through my mistakes and what I shouldn’t have done –

Before I begin, here’s a snapshot from my analysis last week that I already had lined up and all I had to do was wait for confirmation to enter the market -

Below, you can see how the market reached the 1403 level I had displayed and hit my first level of support upon a downside breakthrough of the ascending triangle trendline.

So the first stages of last week’s analysis were pretty much bang on. Now on the 1 hour chart, I’ll show you where I went wrong -

1 Hour

Firstly, 1 - We had price forming within this rising wedge which usually indicates we may have a sell-off coming into action. 2 - Along with bearish divergence on the RSI – also indicating the bulls are running out of steam. 3 - With my final confirmation to enter short coming after a double top formed at the 1432 – 1434 resistance zone. So here is where I entered my short position and had my profit target sitting at 1404 value.

Now, comes my mistake, a few hours after entering I saw a bullish pin bar form and instead of just holding tight and trusting the original analysis I closed my sell position and entered long. Only to find the following hourly candle close was a huge bullish engulfing pin that engulfed the previous 8 candles (one of my favourite confirmation setups – and confirming my original analysis even more so).

Thereafter, the market proceeded to break through the rising wedge, continued to fall and also broke down through the ascending triangle trendline - hitting what would have been my original profit target the following day (on Thursday 1st Aug). Resulting in a loss that should have actually resulted in a 2:1 reward/risk profitable trade.

Hopefully, this breakdown sheds some light on how you can be your own worst enemy in trading – you can either let it get to you, put you down and complain that the market is ‘always against you’. Or you can face up to it, take responsibility and use this lesson to learn from and try to avoid doing again in the future. This is where the skill of trading only makes up 20% of your success and the other 80% is made up of your mindset.

You Win. Or You Learn.

Before I leave you, however, of course, we don’t want to end on a downer do we:

So let me end the show with another lovely Oil trade taken on Wednesday that hit my take profit 24 hours later.

Oil 4 Hour –

After a bearish run mid-July, the market pulled back and rejected the .618 Fib along with 4 hour hanging man candle close I placed my short entry. Closing me out the following day for a 2:1 reward: risk and 108 pips profit.

That feels better :)

Thanks for your time today and as always, I look forward to your thoughts.

image sources: uk.tradingview.com

Disclaimer: Any statements non-factual in nature constitute only current opinions, which are subject to change. The information presented in this article is not a specific buy or sell recommendation and is presented solely for informational purposes only. Not to be taken as financial advice.