Thursday, February 25, 2016

Bad dream

I woke up from a horrible trading dream this morning. I was daytrading (something I don't normally do), and opening positions via market execution. After I opened a position, I'd enter my stop loss a few seconds later.

I was trading on the 5M AUDUSD chart, and opened a long position. As I tried to type in my stop loss and enter it, MT4 (my trading software) began to freeze and become unresponsive. The AUDUSD suddenly started to crash, and I remember desperately trying to close the trade. But because MT4 had froze, I couldn't do anything. 

In my dream, I had an $8,000 account. After about 10 seconds of frantically clicking on my screen, MT4 finally began to respond again and I closed my trade. My account's balance had fallen to $2,900 in a matter of seconds.


- trade small so a catastrophic move won't wipe you out (my position size was obviously excessive if I lost $5k in a few seconds)
- enter your stop loss WITH your order, not AFTER 
- don't trade short-term (longer-term trades give you more time to respond)