How I Turned A Profitable Day Into A Huge Loss

Today we will talk about an early trade on the DAX that I took while waiting for the Strudel Trade. This is "How I Turned A Profitable Day Into A Huge Loss" OVERTRADING! I made several mistakes today and we will address those . All in all I know I over traded today. I made good trade early on for a nice gain. I should have quit trading then. The next trade made a really stupid move and lost it all. Normally I would revenge trade but since It lost near 5% of my account I sat on my hands.. The next day I read this post on the APEX forum that really brought things into perspective for me  Start With $15,000. Add $15,000. Lose All $30,000 In 3 Days

Sometimes you just need to know when to walk away.

 

Its a pretty big news day with several medium and high impact events during my trading hours... You will notice I also show the news events in the hours leading up to my trading time. I do this so that I can understand what impact the earlier news may have had on the chart. All that news at 5am definitely affected the DAX and the FTSE and set the tone for the market that day.

 

News 7-14-15
News Events 7-14-15

 

 

Most important events on this chart affecting my trading is the US news occurring from 08:30 to 10am. I knew that news can greatly impact the market but I hadn't traded through it before. I was about to see just how much it can effect the market.

 

Early DAX and 7-9AM Strudle Trade

Here we see the 1 hour chart for the DAX. I opened this early on the 6-8am strike time to prep for the 7-9am trade. Initially I felt the 7am candle would bearish in keeping with the trend but it experienced a small retracement.

DAX 1H-7-14-15 0705
DAX 1H-7-14-15 0705

As I watched the price go bullish on the 1H chart I saw a potential trade on the 6-8am Strike

DAX 1H-7-14-15 0709
DAX 1H-7-14-15 0709

Here is closer look at my trade on the 5 minute chart. I noticed a resistance level  at a strike on the chart so when price went bullish sold 10 contracts at $18 then set a WO for another 10 at $30.

This was WO filled a few minutes later as price increased. I still need to work on being patient and getting my entry price. I find that i have been pretty consistent at projecting where price may go. I should set working orders, and let price come to me.

Your order was executed on: Tue Jul 14 07:00:26 EDT 2015. The details of your matched trade are shown below for your reference:

Trade Details:
Contract: Germany 30 (Sep) >11463 (8AM)
Expiration: Tue Jul 14 08:00:00 EDT 2015
Direction: SELL
Quantity: 10
Price: 18.00

A few minutes later my WO was filled.

Your order was executed on: Tue Jul 14 07:07:10 EDT 2015. The details of your matched trade are shown below for your reference:

Trade Details:
Contract: Germany 30 (Sep) >11463 (8AM)
Expiration: Tue Jul 14 08:00:00 EDT 2015
Direction: SELL
Quantity: 10
Price: 30.00

 

 DAX 5M 7-14-15
DAX 5M 7-14-15 Chart (The chart is wrong should be -20 @ $24)

 

 

 

Strudle Entry Rule: If the 7am candle is confirmed green (bullish) then buy the strike just below the open of the 7am candle. If it is red (bearish) then you sell the strike just above the candle.

 

With 13 minutes left on my initial trade, every thing was looking sweet. I knew I would be holding the 8am until expiry so I began to look for an entry according to the rules of the DAX strategy. It settled ITM for a $480 profit. The 7am candle was still bullish with only 13 min left to close, traveling in a sideways action so I thought it would close bullish. A small bearish candle gave me and improved entry so I grabbed a price at market. I bought the 9am 11434 strike +10 @ $71 and another 10 when price dropped to $66.75

 

635724570732756922

 

 

As I watched over the next 25 min to my horror price didn't go back up it kept right on dropping towards my strike.  Also at this point I had gotten so involved in my trading I had forgotten about the news due to hit at 8:30am. As the price crossed my strike I got nervous and when the next candle appeared to want to continue this trend. I puked out and sold my 20 contracts for a $420 loss.) My thinking for closing this trade was I entered to early before the 7am candle was confirmed. The 7am candle closed bearish and the hourly chart was in a downtrend. so I was holding a trade that didn't follow the Strudel rules or the trend. This loss pretty much wiped out my previous win after fees from both trades was factored in.

 

635724607109097529

 

 

The next candle after I sold the price shot up!!!!  IF ONLY I HAD HELD!!!! I need more patience. Now I was looking to get in a position that followed the rules for the DAX trade. When that price shot up this let me get an entry on a position of -10 @ $18... I set a WO for another -10 @ $30. When it was filled had a chance to add 10 more at $40+ but I hesitated and didn't get in until $25. The market took a dive on the next candle.The negative news hit at 8:30 am and drove price down. it was then I knew this trade would settle in the money...15m later it settled ITM for a $1200 profit. I didn't realize it then, I had gotten lucky... if the news had been positive, I probably would have lost that trade as well.

 

 

9-11AM FTSE Brunch Trade AKA "The Meltdown"

So now I was $1200 ahead for the day this is where I should have stopped trading. But no not me. I wanted a win on the FTSE. $1200 isn't 5% of my demo account but its more than I usually make in a week at a regular job. So I waited for what looked like a good set up. at 9:30 the market took a dump I jumped all over it selling the prior resistance.

 

 

635724662757960462
FTSE 5M Chart 9:43am

 

Then it had quick reversal and I used the increase in price to get 4 more contracts.  Price started rising again and then just before 10 am my computer crashed. It was 15 minutes before I could get on the chart again. The news at 10 am had the market exploding to upside and I was screwed for the 6678 strike. Little did I know how far it would go. You keep thinking it has to come down right? No it doesn't. So I exited the trade with a loss of roughly 2/3 my funds risked.  Then I decided I wasn't gonna let this trade get away with a loss and I place a large "Revenge Trade" against the trend (again) Below is a step by step of my Meltdown Trade  When the dust settled I was out $4000+

 

FTSE 5M-7-14-15 FINAL

Keywords: binary options trading log, FTSE, DAX

 

OK you have read this far thank you so much! Now its your turn to take action. Tell me what do you think I can do improve my trading? Tell me what will you do this today to improve yours?
Dustin Donham

Dustin Donham

Webmaster / Trader / Marketing Guy at Forex Forge
Dustin is a humble student of the markets, traveler & all-around badass. When not trading he works with private clients to improve their online marketing efforts. Fo sho.

He enjoys outdoor activities, a perfect day for him would be a trek to remote waterfalls followed by a some whitewater paddling or a bike trail ride.
Dustin Donham

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