It has come to my attention that we are in the midst of an exciting time in the financial markets. Correlations are being thrown out the window; fresh all-time highs and lows are being printed across several markets; and we are bearing witness to the unfolding of a chockful of events, which we can all interpret and participate in, through the medium we have come to love and hate - trading.
I have decided to commit to the task of maintaining a journal here at Forex Factory, which will serve as an electronic notepad of sorts. I will jot down my thoughts about trading, as well as my interpretations of various events transpiring across the markets I dabble in. In so doing, I hope to have others who have divergent points of view to speak up and add to the discussion, for in providing me with their interpretations, my trading experience will be enriched, and my development will be sped up.
A Short Auto Biography
I harboured an interest in entrepreneurial activities from an early age, and like most individuals, decided to take to the internet to tap into its potential. I became lost in web design, advertising, paid to post programs, games with real cash economies etc. However these generated cents at best and were definitely not worth the time I was investing into them. It took being ripped off by what was turned out to be a Ponzi Scheme, for me to decide that I had to approach this from a different angle.
One day, my browsing was interrupted by a pop-up which seemed to evade my pop-up blocker - an advertisement for eToro, which painted Forex as an easy way to make comfortable sums of money with little to no experience. It all started with this pop-up.
After playing around on demo, I directed my attention to learning as much as I could about Forex, taking the traditional route through the BabyPips School; reading countless forum posts; the Systems Forum etc. I was enguled by the colorful magic of indicators, leading me to stumble across a method of trading Bollinger Bands which I had tweaked beyond recognition with a mountain of rules for different situations, which provided me with small, marginal profit over back-tested data. Being wet behind the ears, seemed good enough for me! Besides I had read Trading In The Zone, I was willing to accept losses because they were out of my control - my psychology was completely in check!
Luckily I was unable to trade this method, because during NY and London hours, I would be stuck inside the classroom. I then learned about mobile trading through OANDA, and thought that my problems would be solved, but my dreams were crushed when I realized that the Mobile Platforms had no indicators.
In so doing, I was forced to begin a long quest to develop a trading methodology independent of indicators. I did not do away with them because I have an aversion to them, or because I wanted to proudly say 'I trade naked Price Action; indicators are lagging!' - but because I had no choice. That being said, I have nothing against indicators, nor can I be of any help on the subject since it is not my area.
The quest turned out to be a fruitful one, and I learned more about Forex and Financial Markets in general than I would have ever imagined. Based on what I gathered, I painstakingly joined bits and pieces together to create what seemed like a working methodology to me; one which I have confidence to trade, because I understand it thoroughly.
How Do I Trade?
It is hard to drill my methodology into an easy-to-understand format, but essentially what I do is:
- Find out what is going on in a marketplace
- Having a firm grasp of what's happening, look for a low-risk area to enter
- Let the trade run until conditions have changed such that the mature position is ripe for harvesting
My interpretation of what is going on, my criteria for a low-risk area, and how I determine whether conditions have changed, have a hint of discretion embedded within them, which most importantly, works for me. I am not stating that this is the only way to trade, nor is it the most profitable, but if it can increase my account size steadily, then it's as good as any.
Goals Of My Trading (in no particular order)
- To increase my account to the point where it satisfies the requirements for a Prime Brokerage
- To be able to sustainably afford a Bloomberg Terminal/Reuters 3000 subscription
- To expand to the futures market
Hopefully I've covered all bases for now.