A Guide to Consistent Trading

OK lets get this going… The year is now on and I am ready to make things happen.

Each day I will post my trades that I took and reasoning behind my decisions. The format for the calls will be:

Entry:
Direction:
TP 1:
TP 2:
S/L:
Strategy:

The system that I use is a very basic no frills strategy whereby I base all of my trading decisions on Support and Resistance levels. I primarily trade breakouts of these levels but am also testing other systems, I will let you know when I take a trade which system I am using.

The key to the success of any trader is to understand that we are merely looking for a slight edge over the market… we all win and lose trades but the key is staying in the game. Most systems can make you money… As long as you have the right money management installed and you consistently trade your plan then you will be profitable in the long run.


You also have the slight issue of emotions but if you learn to trade your plan and understand that everything is probability and nothing is certain then you will gradually start to understand and indeed welcome your losses as an opporunity to learn something new about yourself, the markets and your system...
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I welcome any questions or insights…

Micardo

Good luck with this thread

I wish you a very profitible 2007

Well unfortunately today has been a really slow day again... I am currently waiting for a break and sustained move beyond 1.9340 before making any sort of decision to trade and it doesn't look all that likely...

If I do take a trade I won't be keeping an extremly large stop as the past few days have shown how indecisive the market currently is which make whipsaws all the more likely...

I'll keep you updated...

Good luck Micardo.
I also trade support and resistance breakout. I also trade Mouteki trendlines break in One Hour chart. Give it a try.

stick to the basics and believe in consistency and you should do fine. Remember, strategy is the very least important. Strategy comes and goes when market changes.

the trader's job: identify patterns in the market's behavior that represent an opportunity (your strategy) and then to determine the risk of finding (logical stop loss) out if these opportunities will play themselves out as they have in the past (that's it, no expectations, no emotions, anything can happen)

the meat and potatoes:
1. Psychological management
2. Risk management
3. Money management
4. Fundamentals/technical analysis (strategy)

Five truths of trading/market:
1. Anything can happen - all it takes is one trader anywhere in the world to make a phone call, press a button

2. Don't need to know what's going to happen next to make money- can't know anyway because of #1

3. Random distribution betweens wins/loss for any given set of variables that define an edge- meaning that your strategy, out of 20 trades, can yield you first 14 wins, last 6 losers, first 5 losers, next 5 winners, next 1 loser, final 9 winners. Meaning you don't know how the chips are going to fall, but you believe without a doubt your edge over enough trades will show you consistent profits. Every trade is different, and no two trades are alike.

4. An edge is nothing more than an indication of a higher probability of one thing happening over another- that's it. Be the casino and let the edge work through enough trades to show you results.

5. Every moment in the market is unique- goes back to #1. Make sure you get this one down. This one has implications on emotional response (which, should be none or at a neutral state when trading). If every moment in the market is unique, you can't have any expectations. When you don't have expectations, you can't view information from the market in any perspective but neutral (just clear, objective information). Not only is this important pre-trade, but it is also important when in trade, and when exit as if one trades with emotions, the mind will automatically filter out negative information that's contradictory to one's expectations, which clouds the reality of what the market (which is in a neutral state, tells you).


a trader is a money manager that looks for extremely high yield returns (compared to a hedge fund), so act as if you are a fund manager managing a very sizable portion of money which you are responsible, you will not likely to lose the dicipline then

Trader1580, Thanks for posting. It sums it up. You hit the bullseye.

Hi Guys sorry I didn't post this earlier but I got so tied up last night...

Entry: 1.9646
Direction: Long
TP 1: 1.9666
TP 2: 30 Pips Trailing
S/L: 30 Pips
Strategy: Breakout

Trade Total: 20 Pips
Pip P/L: 20 Pips


This was a nice little start to the week... Really I was looking for a few more pips profit but there just wasn't enough volatility in the market to sustain any sort of a move, so the market hit my first TP then I moved my stop to BE and got stopped out... How ever 20 pips for the day is not to be sniffed at...

Entry: 1.9649
Direction: Long
TP 1: 1.9669
TP 2: 30 Pips Trailing
S/L: 30 Pips
Strategy: Breakout

Trade Total: 10 Pips
Pip P/L: 30 Pips

OK This trade didn't quite pan out as initially anticipated... Everything looked really good this morning and the break seemed right so I entered. Unfortunately the market messed about at around the +10 pips mark for an hour which is when I decided to exit half of my position. For me I knew the news was due out and I didn't think the market had enough to hit my first TP before the news so I took half of my position off with 10 pips profit and left the 2nd lot on at Breakeven with a view that this was now a free trade and if the news is positive for the Pound then I will benefit and if not then my worst case is +10 pips.

Well it turned out that +10 pips was what happened... It could have been better but at least I am protecting my capital...