March Profits
March 14, 2007 by Trader Rich
I've managed to pick myself up from last month's disaster and gained a little confidence today after both my h-system and reversal trades profited 60 pips total. I was able to jump on and off for the downward momentum in the European session and then jump back on and off for the upward momentum during the US session. I'm currently up 36 pips or a return of investment (ROI) of 5.4% for the month of March. I've decided to take Ed Mamula's advice on calculating profits for reporting my progress here. If you want to check out Ed's post titled, "Pips vs. Percentages Part 2" you can do so by browsing to http://edmamula.com/2007/03/09/pips-vs-percentages-part-2/
I've started my trading reorganization plan by rewriting the rules for the two GBP/USD trading systems I use. I've also redone the trade tracking spreadsheets I use to store more detail. I realize that I need to keep more detailed records regarding my trading systems so that they can continually be optimized.
As for all of the other technical analysis I wanted to learn more about specifically fibonacci, chart patterns, and carry trades, I'm not going to pressure myself to look into learning these any further at this point in time. I received a comment from Motu of Auckland, New Zealand who got my mind back on keeping it simple:
I think we're all guilty of thinking if we knew more it would make us
better traders. But IMO that is a dead end road. Some really successful
traders use very simple stuff. Have a read of "The Logical
Trader" by Mark Fisher…his ACD system is a nice blend of statistics
and discretion…plus he still uses it (see thelogicaltrader.net for a
book excerpt) - and it is very simple to use. Alternatively, Phil McGrew's stuff really works….and I'm certain Phil is the real deal in terms of trading himself.You
mention "it's strange that I spend so much time optimizing and
organizing this website but I don't translate this over to my forex
trading and studies."The reason for this IMHO is that site
maintenance it is not as stressful as trading! On the other hand,
trading profitably is incredibly boring…or should be. I think many of
us would be better off leaving our money in a portfolio of carefully
chosen CTA's…
Thanks Motu.
I am going to continue reading Nicole Elliot's book on Ichimoku which I could possibly use for position trading the USD/JPY in the future.
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60 pips is good. I am up 300 pips for march on gbp/jpy. Isn’t making money great
Using percentages to track your trading progress is definitely the way to go.
It offers the best baseline for comparing your progress month to month, year on year.
With percentage change figures on your whole history of trading you’ll be able to compare how you are doing now to how you were doing 12, 24 or 36 months ago. You’ll be able to more easily see how consistent you are, and if you’re meeting your stated objectives.
Following up on Motu’s excellent comment, it really comes down to accepting down at a deep level that you really don’t need to know everything to make money at trading. Researching more and more indicators and systems is not what will bring you success.
There is a certain amount of trading knowledge that you do need to gain, but after you have acquired all that you end up with diminishing returns which only serve to side track you from your ultimate goals.
I wrote a related article about this a while back, looking at how traders need to be able to cope with the uncertainty in what we do, which is linked to in the Website button.
I absolutely agree with the comments that are encouraging us to keep it simple. Having more technical indicators to look could possibly increase our confidence, but beyond a certain point, it really doesn’t increase our accuracy. I’ve heard it said many times that a man with one watch always knows what time it is and a man with two watches can never be sure…