Trading Styles

I have been trading since 2003. Its been a long road and I have definitely learned alot of trading methods and techniques over the years. I'm sure for those in the same boat, you know what I am talking about. You read about a system here, a book there and every now and then you get a crazy idea that you want to test out to combine different styles or methods.

So far, I have not had success in growing my account. One week I will do something that is profitable, the next I will give it back trying something else or trying to improve the original plan. Other times, I simply place stop losses that get hit so I siwtch to non stop losses only to find myself in draw down, but with small position sizing, I get myself out of the situation and my account grows.

I guess my question goes to those out there that ARE making it and making it consistently. What makes you successful? What method of trading do you prefer? Do you like taking large lots and small targets and stops or smaller position sizes with larger targets and stops? Do you prefer hedging to plain stop loss?

I have been trying pretty much everything in my forex tester software. It seems many techniques simply do not work or are too slow or requires alot of baby sitting due to market reversals etc....

The only thing I have found to be consistent is to take breakouts and close for half position size while moving stops to break even and then allowing the trade to ride out. Many times the second half of the position gets stopped out and I only earn half the profits, while the next trade may get stopped out completely for a full position eating previous half profits away.

Its a bit frustrating. I understand risk to reward, but earning 3 times the reward to risk in many cases doesn't pan out and I find myself stopped out more times than I hit my targets.

I'd like to leave this thread an open discussion to discuss any insight or successes you may have found if traveling down a similar path...

If you are successful, what would help provide as a confidence builder is how long you have been using your method and what you do to stay consistent and stick with the rules.

My technique is to find an edge in the market, a consistently reoccuring pattern / inefficiency and then exploit that.
What I have found as well is that it is incredibly hard to be net-profitable over the long-term with an intraday system, cause trading costs will eat up all your money. Thus I stick to higher time-frames, so that trading costs have a minimal impact on my profits & losses.
In my opinion, the best techniques have low win/loss and very high risk/reward ratios. But that's just my belief, I might be wrong with that.

Always stick with higher timeframes, adjust your position size to your risk level, take solid price action signals from obvious levels. Minimum risk to reward is 2 to 1.

So, you've been trading almost a decade and you're still struggling with this?

Start there. That's your most obvious problem.

Our brains all work differently. I'm consistently profitable trading breakouts in certain conditions but I consistently fail trading reversals, chart patterns, fundamentals (not the news), technical indicators and most everything else. If that's what works best for you, stay focused on it and make it your own. Sorry I can't suggest anything more useful.

And yeah, the 1:3, 1:2, 1:1, 1:250 risk:reward only applies if you have a working approach. But also consider that you don't have to abide by this. For example, my approach depends on home runs to offset a whole lot of small losses, and risk:reward can't apply.

And there are other conventions you don't have to follow if they hurt your trading.

I hope this helps,

Rob

Well for me it's higher time frames. I rarely trade anything below the daily. And now we have a toddler running about the house trying to look at a 15m chart just isn't an option.

I always follow the trend. If I am trading the daily chart I will be making sure I am going the same way as the weekly.

I struggled with stops for a long time. It's the old fear and greed thing. I now use a two bar stop and that seems to get me out of losers quickly but lets profits run.

I don't use any real kind of system. All I look for is a positive move in-line with the main trend and I take a position. Very simple, very boring but it works for me

You're trading too much.

There are fewer possibilities to open profitable trade than you think.

Many traders open charts, and they start looking for a place to trade. They're searching, searching, and searching until they finally find it. And mostly this is just imagined profitable place to open a position. They just have to trade - if a possibility doesn't exist, they are going to 'invent it'. They are looking for patterns, and when there are no ones, their minds will 'create' them. Because they need to trade. Right here, right now. They are intraday traders.

If you have mindset that you have to trade every day, that there are possibilities every day, that you can make money every day - you are wrong. This is just random hit-and-run trading. Sometimes it works, sometimes doesn't. And from what you have written I presume that you are that kind of a trader.

Look how fast other traders on this board open a position, after they have opened their charts.

You have to wait and observe. Like traders on other markets.

It doesn't matter if it is only one trade a week or one trade every two weeks. You just have to adjust your position for your trading to make a financial sense.

Do a test. Check for how long can you observe price action without pressing buy/sell button. Don't be surprised if you discover that you are addicted to trading. And if you're addicted to something - you will fail no matter what you do. You have lost ability to think critically.

Check how long you have to wait for the opportunity to show itself. You must do these checks to know what is the frequency of appearing of the profitable opportunities. Without that, you will always fear that if you haven't been trading for the past three days, you're never gonna press that button.

You don't have to learn much of new systems or methods. You already have what is the most valuable thing in trading - experience and screen time. I'm sure you know many times by your guts what's going on on the screen.

And don't look what others are doing. If they make profits, open trades - it doesn't matter.

Slow down. Wait. Stay calm. Get rid of forex addiction.

Give yourself whole month for waiting. Say to yourself - If I won't open any position this month - doesn't matter, this month I don't trade. And check how long you have to wait for the real profitable opportunity to appear.

Re-discover forex. Not by trading this time, but by observing.

awesome post!

There is something you need to understand.

And that is the law of large numbers.

If you have an edge, the law of large numbers say that you will be profitable given enough trades.

1)Start with an edge. if you don't hvae one. Stop and find one b4 proceeding.
2)Understand that an edge doesn't always work.
3)Let the law of large numbers do its thing.

Discipline is something you have to discover for yourself. Maybe when trading for a living becomes a "must" instead of merely a "want" then you will finally see the way.