I am taking our ‘Slow Trader’ hedge fund out of commodities and any medium or longer term trades. We are going entirely into day trading and trading a single item – which at the moment is the currency pairing GBP USD.
(Medium-term trading of commodities is an excellent way to trade, but we need to focus 100% of our efforts and, for us, that is day trading).
It is not possible to day-trade until a trader reaches a particular stage in his or her ability to read and manage in the lower timeframe charts. I think that we are close enough now to this ‘stage’ that we can touch it.
To believe that it is possible to day-trade the lower charts is like asking some of us (non-athletes) to run a 4-minute mile. If we did not know better because we can watch the Olympic games, we would quickly conclude that the 4-minute mile is unachievable; we would probably give up and defend our egos with comments such as ‘it’s not possible’.
For those that do achieve the 4-minute mile (incredible as that is), they will get nothing from it other than personal satisfaction. That is because all the wins, the glory (the profit) is being able to go a few seconds under 4 minutes.
In our day trading, we feel that we are now achieving the equivalent of the 4-minute mile. We are currently day trading where we can almost guarantee a breakeven at the end of the week.
Why choose day trades over medium-term trades? For us, it is because day trading is definite and finite. Trades finish before the end of the day. You are not waking up to a real shocker. In Andrew Tobias’ (updated) book ‘The only investment guide you’ll ever need’, he explains how he was in a hedge fund that after five years increased his fund 4.5 times – soon after five years it was at zero. And that is the thing with hedge funds, the unpredictable, explosive nature – both up and down.
My aim is different to this. I want to increase our fund in a regular (almost predictable) way.
Our trading desk: