Hello all,
Since I started I’ve been a total bomb and I realize why - I did not approach trading in a very structured way - more like “oh look, there’s a head and shoulders”, “Let’s take a trendline bounce”, “get on top of the range”, etc. Stop placement was more pip based than technical level, etc. You might say it was a period of wild experimentation and a search for soul.
My discipline went through its early stages of idiocy (loosening stops, adding to a loser, etc), and I understand all too well its importance. My biggest problem is strategy and structure.
I am trying right now to work on developing concrete, well defined trading strategies. I don’t want to call it a “system”, because it seems that my personality is ill suited to absolute blind execution of a system (esp. one that heavily leans on technical indicators). I’m more of a person who likes to have the ability to make a determination on the spot, not simply work like a computer program. I also think that as the market changes, a person can adapt better if adopting a discretionary approach rather than a very rigid system.
That said, does anyone have any advice how you developed your strategies? I would imagine one way is to take a look at what’s already out there that suits your personality, and begin modifying it in a way that works optimally for you.
My approach right now is to develop three basic strategies: trend, momentum breakouts (news), and range oriented.
My philosophy is that first I need to do “pre-screening” every day, that is:
- Identify all relevant support/resistance levels and trendlines, check what is happening on the weekly, daily, and four hour, see where the 200 pd moving average is sitting.
- Check for news release times, in order not to get stuck in a trade during an important announcement,
- Determine which pair is trending, ranging, or consolidating at the moment.
After that, I need to identify what strategy would be appropriate for which pair at the moment, the trend strategy, the momentum breakout strategy, or the range strategy. Then, look for the setups as they develop, and act on them.
How is that so far?
Thanks for any and all suggestions…