5/26/13 Update:
Wins: 0
Losses: 4
After reading "Trading In The Zone" and through the past 6 months of trading experience, I have come to firmly believe that being a consistently profitably trader is truly 80% mental and 20% analysis. Much of my sporadic win/loss streaks and overall failure of trading successfully so far can (in my honest opinion) directly relate to my lack of trading discipline and mindset of a trader.
I have over-traded, been over-leveraged, held on to losing positions for too long, cut winning positions too short, cut positions that would have been major winners while they were in the negative before they even hit my stop loss, and then watched them bounce into major profit... pretty much everything a trader shouldn't do.
I've learned that I generally trust my analysis, but I do not trust the actual execution of my orders. So that is why I am setting these strict rules that I will follow for the next 6 months, and I will monitor every trade I make to analyze the ones I lose and why I lost them.
My 3% For 10% Strategy
A great trader on this forum once said that you can take 6 currency pairs and monitor them throughout the month. Throughout the month look for the absolute best possible set-up that each pair has to offer, and only take that absolute best set-up. Use a 30 pip stop loss risking 3%, and 100 pip take profit level, yielding you 10%. Winning all 6 trades would yield you 60% for the month, winning only half would still put you at an excellent 21%. It allows for growing an account quickly, and also trading very conservatively... the best of both worlds as he called it.
My strategy is a twist of this idea. Each day sometime between the close of the New York session and opening of the London session, I will open one trade with a 36 pip stop loss and a 120 pip take profit level, risking 3% per trade.
I am allowing myself to trade any of the 24 pairs that my broker allows (all combinations of the major 8 currency pairs minus a few) but I can only open a single trade per day. With one trade allowed per day it gives me a solid plan of action, allows me to trade regularly, but still limits me from over-trading.
I will not take this one trade lightly as I know that each trade has the potential to yield 10% of my current account balance. With this strategy I will have what I have lacked before, which is clear cut rules, not being allowed to close positions early, I can't overtrade, etc...
This strategy will teach me discipline, and will give me clear goals since I know exactly what to expect day after day and week after week. Based on a month to month outlook, and estimating 20 trading days per month.
0 wins, 20 losses - -60%
1 win, 19 losses - -47%
2 wins, 18 losses - -34%
3 wins, 17 losses - -21%
4 wins, 16 losses - -8%
5 wins, 15 losses - 5%
6 wins, 14 losses - 18%
7 wins, 13 losses - 31%
8 wins, 12 losses - 44%
9 wins, 11 losses - 57%
10 wins, 10 losses - 70%
11 wins, 9 losses - 83%
12 wins, 8 losses - 96%
13 wins, 7 losses - 109%
14 wins, 6 losses - 122%
15 wins, 5 losses - 135%
16 wins, 4 losses - 148%
17 wins, 3 losses - 161%
18 wins, 2 losses - 174%
19 wins, 1 loss - 187%
20 wins, 0 losses - 200%
Although the months won't end exactly like one of the percentages because each lot size will be calculated based on the current balance instead of the beginning month balance, it still gives a good idea of what can happen. It can be seen that I simply need to win 5 trades to be positive for the month.
The Rules
1. One trade opened per day between New York close and London open (sometime after market open on Sunday).
2. Stop loss is set to 36 pips and take profit is set to 120 pips.
3. Lot size will be according to risk 3% of current account balance.
4. Once a trade is opened it cannot be closed and stop loss/take profit levels cannot be changed.
5. Once a trade is opened for a particular currency pair I cannot open another trade for that pair until at least 3 days have passed and the previous trade is closed.
I will be trading based on Price Action/Support and Resistance. I do not use indicators nor moving averages. I also like to enter trades that correspond with current fundamental analysis/overall sentiment. I find that technicals aligned with fundamentals seems to work best.
A running total of won/lost trades will be updated regularly in this first post, and I'll link a trade explorer after the first trade is entered.
Wish me luck!
Wins: 0
Losses: 4
After reading "Trading In The Zone" and through the past 6 months of trading experience, I have come to firmly believe that being a consistently profitably trader is truly 80% mental and 20% analysis. Much of my sporadic win/loss streaks and overall failure of trading successfully so far can (in my honest opinion) directly relate to my lack of trading discipline and mindset of a trader.
I have over-traded, been over-leveraged, held on to losing positions for too long, cut winning positions too short, cut positions that would have been major winners while they were in the negative before they even hit my stop loss, and then watched them bounce into major profit... pretty much everything a trader shouldn't do.
I've learned that I generally trust my analysis, but I do not trust the actual execution of my orders. So that is why I am setting these strict rules that I will follow for the next 6 months, and I will monitor every trade I make to analyze the ones I lose and why I lost them.
My 3% For 10% Strategy
A great trader on this forum once said that you can take 6 currency pairs and monitor them throughout the month. Throughout the month look for the absolute best possible set-up that each pair has to offer, and only take that absolute best set-up. Use a 30 pip stop loss risking 3%, and 100 pip take profit level, yielding you 10%. Winning all 6 trades would yield you 60% for the month, winning only half would still put you at an excellent 21%. It allows for growing an account quickly, and also trading very conservatively... the best of both worlds as he called it.
My strategy is a twist of this idea. Each day sometime between the close of the New York session and opening of the London session, I will open one trade with a 36 pip stop loss and a 120 pip take profit level, risking 3% per trade.
I am allowing myself to trade any of the 24 pairs that my broker allows (all combinations of the major 8 currency pairs minus a few) but I can only open a single trade per day. With one trade allowed per day it gives me a solid plan of action, allows me to trade regularly, but still limits me from over-trading.
I will not take this one trade lightly as I know that each trade has the potential to yield 10% of my current account balance. With this strategy I will have what I have lacked before, which is clear cut rules, not being allowed to close positions early, I can't overtrade, etc...
This strategy will teach me discipline, and will give me clear goals since I know exactly what to expect day after day and week after week. Based on a month to month outlook, and estimating 20 trading days per month.
0 wins, 20 losses - -60%
1 win, 19 losses - -47%
2 wins, 18 losses - -34%
3 wins, 17 losses - -21%
4 wins, 16 losses - -8%
5 wins, 15 losses - 5%
6 wins, 14 losses - 18%
7 wins, 13 losses - 31%
8 wins, 12 losses - 44%
9 wins, 11 losses - 57%
10 wins, 10 losses - 70%
11 wins, 9 losses - 83%
12 wins, 8 losses - 96%
13 wins, 7 losses - 109%
14 wins, 6 losses - 122%
15 wins, 5 losses - 135%
16 wins, 4 losses - 148%
17 wins, 3 losses - 161%
18 wins, 2 losses - 174%
19 wins, 1 loss - 187%
20 wins, 0 losses - 200%
Although the months won't end exactly like one of the percentages because each lot size will be calculated based on the current balance instead of the beginning month balance, it still gives a good idea of what can happen. It can be seen that I simply need to win 5 trades to be positive for the month.
The Rules
1. One trade opened per day between New York close and London open (sometime after market open on Sunday).
2. Stop loss is set to 36 pips and take profit is set to 120 pips.
3. Lot size will be according to risk 3% of current account balance.
4. Once a trade is opened it cannot be closed and stop loss/take profit levels cannot be changed.
5. Once a trade is opened for a particular currency pair I cannot open another trade for that pair until at least 3 days have passed and the previous trade is closed.
I will be trading based on Price Action/Support and Resistance. I do not use indicators nor moving averages. I also like to enter trades that correspond with current fundamental analysis/overall sentiment. I find that technicals aligned with fundamentals seems to work best.
A running total of won/lost trades will be updated regularly in this first post, and I'll link a trade explorer after the first trade is entered.
Wish me luck!
"If you won't risk the usual, you'll have to settle for the ordinary."
Will follow your thread!
