Weekly Diary – Slow Trader Fund 7th November 2015

I will provide the fund amount the first Saturday of each month, or close to it.

We are 7% up on our original investment:

Snip20151107_8

The name Slow Trader refered to my trading style. Namely my steadiness in terms of: ‘the tortoise and the hare’. It was not intended to refer to the pace at which the fund will grow. I’ve moved from indicator based trading to raw charts and price action trading. This is definitely a trading style where the stabilisers have been taken off. And, as with that analogy, once we are comfortable without the stabilisers we can achieve so much more.

I have been very cautious only trading with small amounts over many months. We have not missed opportunities because in price action trading there are several opportunities daily. What is important is that we learn how to read the charts with a high level of confidence. Moreover, we need to be able to manage our trades correctly varying our approach, depending, for example, on the trade scenario: trend (breakout or channel) or trading range, swing trade or scalp, scaling in or not, scaling out or not, and on each trade we need to consider a positive traders equation.. only to mention a few.

The trading amount will build naturally. I wouldn’t like to say if it will take a couple of weeks or a couple of months. It will just happen at the right time. A professional price action trader to go from okay (that is if her fund survives the learning stages) to successful would take 3 to 7 years. I feel that this timeline has been reduced for us due to: my previous trading experience (I wasn’t going in cold to price action trading) my full-time dedication to the process (a luxury most traders starting out cannot do) and sharing my day-to-day learning with my son (James) where we have been able to bring each other along much more quickly than someone working alone would be able to do.

Snip20151107_11

Above is the 5 minute chart of the EUR USD from yesterday. As we can see, we took a buy at the blue arrow and sold at the green arrow. Actually, we scaled in and scaled out but the result overall is the same. We had done this eleven times over the last couple of days without a loss. However, what I’m about to show proves the need to maintain an overall awareness to what is happening in the market.

Snip20151107_16

The blue box above is the same chart information as the first chart. The reason it looks all squashed up is because of what happened a few minutes later: the announcement of the monthly nonfarm payroll in the USD. This large movement distorts the vertical (y-axis). I don’t trade these announcements. They are difficult to predict. Often moving significantly one way only to reverse. The S&P 500 weakened due to the announcement but in the chart above the US dollar strengthened. Also, short or long spreads (the spread is where a broker makes her profit) increases dramatically during these volatile moments. The bottom line is that it is essential to know about these events and if we don’t have a stratergy – stay out.

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