Slow Trader

Tag: strategies

  • Trading time is valuable, but some things are important

    Sometimes I have to knuckle down and get the basics done.

    For me, this week, that has included a rewrite of my strategies. Relatively meaningless, I hasten to add, to anyone else that is not a price action trader.

    On a similar note, it occurred to me that a reason that losses take many times longer to make back – than they did to lose in the first place – is down to not modifying price per pip timely and correctly. I’ve reviewed this and put in place what I feel is a reactive but practicable risk management adjustment.

    Moreover, short-term trading demands consistent long-term screen time. I have to say ‘no’ to almost everything else. Otherwise valuable trading time disappears. This week I lost three days, Tuesday to Thursday (which means the whole week because isolated trading days are not ideal). This was to travel and support an old friend at his mother’s funeral. Saying ‘no’ is okay, but some things are important.

  • A neutral few days

    A neutral period looking for re-entry opportunities, but nothing taken this week.

    USD CAD seemed to take-off only to pull back to the weekly support line. A good buy opportunity now – or a few pips lower.

    Brent crude oil is at a position – that we projected a few weeks ago – that is ready to short. We will take shorts from the hourly chart (rather than the daily) as we feel oil is more easily managed from the hourly (rather than the daily) chart.

    Silver provided a reasonable re-entry short opportunity on Thursday. Missed that, but a second chance may present itself again this week.

    Gold has dropped just over 30 pips from where we took profits at the end of last week. Now likely to drop a further 20 pips before meeting a monthly resistance line. If we get a retrace we will take a short as gold has the potential to drop a further 70 to 150 pips over the next few weeks.

    We have listed a new page called strategies. This is written (and added to and changed most days) in a short format – as if we are preparing the ground for a computer algorithm. Therefore of little meaning to a non trader. However, it provides an idea of the precision involved.

  • Trade with this in mind or buy a lottery ticket

    Here’s a trade by list that gives me an edge. Not only in trading but in business too:

    • Know the rules and follow them
    • Don’t lose money
    • Make a little money
    • Make a lot of money

    Know the rules: good management is the same. One of the primary things that my bank manager looks for, before he will loan to my business, is a management team that knows and follows the rules. This is as important to him, if not more so, than the underlying value of the loaned against asset. In trading it is no different, management of the rules and strategies needs to be clear and followed.

    Don’t lose money: very obvious in hindsight. But in the heat of a trade, patience is not always the first thing that comes to mind. Patience is essential, but not to the point of paralysis. The oxymoron is that losing money is part of trading. After all, trading is a 60% certainty at best. The important thing here is only lose what we judge comfortable to lose. If we lose more than what is comfortable then refer immediately to ‘know the rules’.

    Make a little money: if we work hard to make small amounts of money in trading then the big stuff will come eventually. If we find ourselves passing this part and going straight to ‘make a lot of money’ bit, then we need to quickly refer back to ‘don’t lose money’.

    Make a lot of money: this happens automatically if we do the first three consistently. It doesn’t happen any other way unless we find ourselves with a lucky lottery ticket.