Method
I will be trading price action only on a 4HR time frame. To begin, I will only trade a single currency pair, the GBP/USD.
I will be trading off of what can be called thrust bars. A thrust bar is a bar that closes above the prior bars highs or below prior bars low. This indicates a shift in the perceived value for on ongoing auction. You can read more from Jack Schwager, if you'd like.
I will trade both with the trend, and counter-trend. The trend will be determined visually, by locating HH, HL, LH, and LL.
Support and resistance will be taken into account as well as trend lines. My stop loss will be placed behind the most recent swing high, or behind the current bar previous bar, dependent on market volatility. I will at times move my stop to break even. I will, at times, trail my stop, either with a set pip value, based on market volatility as well, or by trailing the most recent candle or doji.
A trade might be closed out early if a thrust bar forms in the opposing direction.
Implementation
I will implement this method by allowing myself to trade for 15 minutes six times per day, or about 1.5 hours a day. I have an alarm set on my iPhone and can manage trades or place orders from there. I am prone to distraction. This will help combat that. I will simply be checking the close of each four hour bar and placing/managing orders.
I also will not be demo trading this method. I myself am of the notion that demo trading is unhealthy for a trader, as it creates a sort of false psychological environment. As a result, my initial account balance will be relatively small, and my risk relatively high per trade. As I compound, risk will be decreased and additional deposits made.
Do note that this is a method, not a system. I hope to develop a feel for the market that is lasting, capable of improving, and adaptive. This journal will be updated once a day.
Progression
At the end of each month I will look over the previous months trades and attempt to project what would have been perfect execution. This will occur on the last day of each month. For each month that my performance matches up with the projected performance, let's say to the tune of about 90%, I will allow myself to add a currency pair to my repertoire.
Do note, that this only applies to accurate execution, not profitability, as I hope to reward diligence, not profit.
I'm operating from the notion that by devoting myself to a certain system diligently, assuming it has a positive expectancy, profit will come. Success is a byproduct of the goal, which is consistency, not the goal itself.
Outlook
My goal is to place an average of one trade per day per currency pair with an average risk to reward ratio of 3:1, risking 1 to make 3. I will never take a trade if it does not at least offer as much upside potential as I am risking. My hope is to risk 5% of my balance per trade and win two-thirds of all trades. These hopes are high, so be it.
Hopes
I hope to compound and develop enough consistency to go full-time by June of 2012, earning a decent six-figure income.
Potential Additions
I thoroughly enjoy scalping and will do so on either the 5M or 15M TF using the same method as mentioned above for a couple hours a day when possible. This will be during the U.S. session and most likely on the EUR/USD, due to the low spread.
I will be trading price action only on a 4HR time frame. To begin, I will only trade a single currency pair, the GBP/USD.
I will be trading off of what can be called thrust bars. A thrust bar is a bar that closes above the prior bars highs or below prior bars low. This indicates a shift in the perceived value for on ongoing auction. You can read more from Jack Schwager, if you'd like.
I will trade both with the trend, and counter-trend. The trend will be determined visually, by locating HH, HL, LH, and LL.
Support and resistance will be taken into account as well as trend lines. My stop loss will be placed behind the most recent swing high, or behind the current bar previous bar, dependent on market volatility. I will at times move my stop to break even. I will, at times, trail my stop, either with a set pip value, based on market volatility as well, or by trailing the most recent candle or doji.
A trade might be closed out early if a thrust bar forms in the opposing direction.
Implementation
I will implement this method by allowing myself to trade for 15 minutes six times per day, or about 1.5 hours a day. I have an alarm set on my iPhone and can manage trades or place orders from there. I am prone to distraction. This will help combat that. I will simply be checking the close of each four hour bar and placing/managing orders.
I also will not be demo trading this method. I myself am of the notion that demo trading is unhealthy for a trader, as it creates a sort of false psychological environment. As a result, my initial account balance will be relatively small, and my risk relatively high per trade. As I compound, risk will be decreased and additional deposits made.
Do note that this is a method, not a system. I hope to develop a feel for the market that is lasting, capable of improving, and adaptive. This journal will be updated once a day.
Progression
At the end of each month I will look over the previous months trades and attempt to project what would have been perfect execution. This will occur on the last day of each month. For each month that my performance matches up with the projected performance, let's say to the tune of about 90%, I will allow myself to add a currency pair to my repertoire.
Do note, that this only applies to accurate execution, not profitability, as I hope to reward diligence, not profit.
I'm operating from the notion that by devoting myself to a certain system diligently, assuming it has a positive expectancy, profit will come. Success is a byproduct of the goal, which is consistency, not the goal itself.
Outlook
My goal is to place an average of one trade per day per currency pair with an average risk to reward ratio of 3:1, risking 1 to make 3. I will never take a trade if it does not at least offer as much upside potential as I am risking. My hope is to risk 5% of my balance per trade and win two-thirds of all trades. These hopes are high, so be it.
Hopes
I hope to compound and develop enough consistency to go full-time by June of 2012, earning a decent six-figure income.
Potential Additions
I thoroughly enjoy scalping and will do so on either the 5M or 15M TF using the same method as mentioned above for a couple hours a day when possible. This will be during the U.S. session and most likely on the EUR/USD, due to the low spread.
Found a way to detect where the market will turn.