If our restaurant served fish and chips one week and a’ la carte the next, both sets of customers are going to be disappointed at some point.

As with what we serve at the restaurant (within reason) we have to be clear in what we represent in trading.

Most of our Slow Trader contributors are slightly north of 60. Okay, all except you SA. But you’re close enough for it not to matter.

Therefore, you’re looking for the fund to do something interesting within the 3 to 7 year period. The younger readers, those under 45, can opt for our share ISA idea, a 20 to 30-year investment.

These are the two options. (1) a dynamic fund that uses lower time frame charts; and (2) a long-term ISA investment based mostly on fundamentals.

We like the short-term and the very long-term. We don’t want what 99% of the investment market is using, the medium term investment idea. For the long-term investors, they expect to go through a few market crashes. It’s part of the game. The long-term investors look at this as an opportunity to buy more at lower prices. The Slow Trader is a type of hedge fund that trades both long and short. The fund rides the wave whether it’s going up or down. Everything else in a market crash, the 99% of the investment market, gets stuck in no man’s land with a significantly reduced portfolio.

For the Slow Trader fund, we’ve had some glaring blunders and some moments of brilliance. We’ve benefitted from taking the time to trade the 5-minute charts over the last year, as the lessons from this were vital. However, we’re delighted with the early results from trading 4-hour charts.

We’ve traded shares from the daily charts but were significantly more successful coming back to the 4-hour charts. Therefore, we now trade a selected mix of currency pairings (FX), commodities and FTSE shares using 4-hour charts.

We have three trading opportunities a day 8 am, 12 pm and 4 pm. (8 pm is a consideration for the FX and commodities-the share market is closed at this time-but as the market goes into the night it has little movement). With the 4-hour charts, we can trade many more markets than is possible with a lower timeframe chart, and we are more likely to benefit from an extended trend.

The fund remains up by 8%.

The last month has been a time for what can be called ‘backtesting’. In other words, development of trading strategies by using historical charts. As in any practice, most benefits gained when tests are as realistic as possible. And I would say that in many ways, backtesting is more exhausting because of the equivalent of several days of trading in just a few hours. But backtesting is an essential part of a traders life.

For the fund, live trading starts again this Monday. It begins slowly, that is with small risk and builds as proficiency builds. The build-up is subjective but I would expect to go to full fund entries within 2 to 3 weeks.

I aim to achieve a monthly gain of 5% to 10% going forward. I use this as a guide to help me balance risk. No trading day is the same, but it is reasonable to expect to find between 5 and 15 sound trades per day. My maximum risk (for our fund size) starts out small but builds to about £400 maximum risk per trade. More often than not I will take a half risk (£200) on most trades.

I provide this information so you can see how a traders day is a constant consideration of gaining an edge through good chart reading and awareness of risk, reward and probability. And as this gains in momentum, day after day, the 5% to 10% monthly gain is not ambitious but very achievable.

Taking a month to backtest can be frustrating to (you) the investor. It is indeed a luxury that most fund managers do not have. However, most funds lost more than 10% last month. Just a thought.

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

We are 7% up on our original investment:

The name Slow Trader referred to my trading style. Namely my steadiness regarding: ‘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 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.

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.

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. 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 of what is happening in the market.

The blue box above is the same chart information as the first chart. The reason it looks all squashed up is that of what happened a few minutes later: the announcement of the monthly nonfarm payroll in the USD. This significant 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 report 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 strategy – stay out.