I’m Ready To Trade
April 10, 2006 by Trader Rich
{mosimage}I have decided to start trading again tomorrow. I'm physically and mentally ready to get back in the ring. This doesn't mean I will enter a trade just for the sake of trading. What this does mean is that I will start looking at the charts more closely and if I encounter a good setup, I will enter a trade.
After I posted this, Craig actually asked a great question. Will you be using the same trading system?
Here is my answer.
I'm going to be using a discretionary trading system which was kind of what I was using the first 10 weeks of the "project" when I was having success. I'm going to keep it relatively simple with trendlines, MA's, the Squeeze, and The Wave. Like I said, I will be using discretion so for example, just because a pair exits a squeeze doesn't necessarily mean I will enter a trade. I will also be trying the 2%-3% money management rule. At no time will I violate the rule of risking more than 2-3% of my capital.
Popularity: 1%
Loading ...
Will you be using the same trading system?
I’m glad you asked. I’m going to be using a discretionary trading system which was kind of what I was using the first 10 weeks of the “project” when I was having success. I’m going to keep it relatively simple with trendlines, MA’s, the Squeeze, and The Wave. Like I said, I will be using discretion so for example, just because a pair exits a squeeze doesn’t necessarily mean I will enter a trade. I will also be trying the 2%-3% money management rule. At no time will I violate the rule of risking more than 2-3% of my capital. Any thoughts?
Never used the “Squeeze” indicator so can’t comment on that, but Money Management is paramount, I learnt that the hard way (doesn’t everybody), the hardest part (I think) is figuring out how big a stop loss should be as it depends so many factors. In the end, I think just keeping it simple is the key, 90% of indicators lag so badly that I fail to see how using a bunch of them together is going to improve the situation. (I think the magic ingreediant is discrention) But anyway, Good Luck!
Craig, what is your main trading strategy? Thanks.
WMA (5, 20, 100) + RSI (14) + Momentum (14).
Look for 5 & 20 cross + Momentum cross + RSI in correct place, only trade in direction of 100 WMA.
Looked for Fib + Pivot Points to ID support/resistance.
Traded on 4 hour charts, fairly standard I’m afraid.
My basic aim was to ride large trends.
Had some limited success, but when I looked back it was not the system that was the problem it was the usual culprits (over trading, not letting winners run, trading without stoplosses, you know the drill…). The system would correctly identify a trend, but my piss poor trade management would let me down.
Let me qualify this with the fact that I have only been doing this for about 4 months, so I’m still very much the beginner. Great thing about this blog, is that it is encouraging that other people have the same struggles (and overcome them), the candor with which it is written is a breath of fresh air compared to much of the on-line crap about forex (the message boards are shockingly bad).
Thanks for the kind words. I’m with you when it comes to message boards… Some good stuff can be found but it isn’t easy. I never really liked them either. Too many people bragging about success and also the ultra-shady characters that seem to flock to forex…
One of the things which staggers me is the lack of questioning of obviously flawed assumptions. (e.g. That prices move towards MA’s, indicators based on standard distrubutions (Bollinger Bands, CCI)). Somebody pops up on a message board with any old half backed idea and suddenly a cult springs forth, no one bothers to questions the basics (not publicly, at least).
Which brings me to a question I have wanted to ask since I started reading this blog, some time back you seemed quite enthusiastic over the ‘Woodies CCI’ system, then nothing more really gets mentioned.
I was wondering why you went off it? I went to the web site and was put off by statements like ‘You must take the price off your charts, because this is what Woody does’, seemed a bit, well…cultish.