It’s better to take a small, manageable loss and be ready to enter the trade again at a different price, than to exit with a few quick pips, only to see the trade escalate into a 3-month monster. The problem is that it doesn’t feel like that when you’re in the moment. 20 pips is 20 pips, right? 4 of those and you can put your feet up for the rest of the month.

This week I picked an entry on the NZD / USD which went immediately in my favor, but found myself trying to find reasons / excuses to exit with a small, tidy profit.  I’m pleased to say I held my ground and instead just moved my stop to zero. I may very well make nothing off this trade, but I could also end up with 500 pips, and that for me is worth the risk.

The challenge with trading is that the monsters are rarely visible from the surface. You can only see them by putting your head under the water. Sometimes you have to hold your head down there for so long, that every nerve in your body will be screaming at you to get out. All that’s visible from the surface are a few quick pips here and there, which in the long run will be vastly outnumbered by your losers. Have patience though, because the monsters be out there, and they’re the only thing that can save you.

And what a week to kick off with! There’s a lot happening in the markets at the moment, with many pairs continuing their established trends, but thrashing around while doing so, offering very little in the way of clear entry points. It’s more volatile that I was hoping for to be honest, and so for the most part I’ve been more of an observer this week.  First trading days of the year, followed by NFP data on Friday, meant this was no place for the novice.

I did make a few pips selling the EUR/JPY, but was guilty of cashing out too early on this one. The price had reached a significant level of support which it hadn’t broken since February 2015.  In anticipation of a pull back, I cashed out when it started to reverse off the mark, and set another pending order below the level.  This was swiftly taken out by a false break, and the price eventually moved back beyond where my original stop loss had been. So in practice, I ended up with +66 pips, where I should have taken a loss of 30.  Not bad you might be thinking?  Not really.  In this particular instance I’ve benefited, but in the long run, that kind of short-term thinking will make it impossible to capture the big moves, which is what my trading is all about.

January 1st 2016. This is the day my journey begins. Five long years lie ahead of me, but the prize at the end of it is well worth the effort; true financial independence.  2015 was a great year for trading. I exceeded my target of 60%, and stuck to the same system all the way through. That’s not to say it was perfect.  There were long stretches of time when I didn’t trade, either because I had already reached an arbitrary monthly target, or just because life got in the way.  These are the things I need to work on this year, as I start to treat this venture more as a business than a hobby.

So I’m starting the year full of confidence, and excited about the future. There’s no trading to report today because the brokers are closed for the bank holiday. But on Monday, battle commences.