Hey guys, newbie at trading here! I’ve been lurking for a while and finally need to reflect my strategy to get some good criticism. I’ve experimented with an abundance of strategies, (…Including trades with no Stop-losses) but I’ve finally settled onto something I like and would like some opinions. (Especially from people using similar a similar strat.)
My strategy relies heavily on establishing a strong position whereby it aims to minimize the chances of the trade being lost. I’ve been drawn to this strategy due to its “Real-time” decision making, where I can judge the market for myself base on its momentum and movement within a given timeframe. I believe long-term trend recognition is as equally as important to recognise whether a Bear/Bull position is more favorable, but the trade will not heavily rely on extrapolating possibilities to establish a position.
[B]It relies heavily on the:
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Market Awareness: (Mine is 12h+ per day. This is important since trades are limited to distinguished opportunities. I try not to trade for the sake of being in a trade. or at least I try to remind myself.)
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Timely Execution: (To capture and maximize the potential position)
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Strong Sentimental / General Economic Analysis: To recognise which market is favoured over the other.
(This is important; It determines how long my trades should run.) -
Decent Fundamental Analysis: All significant Resistance/Support levels realised.
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Discipline. (By far the hardest one to train)[/B]
An example of a ideal entry position would be:
[B]Sentimental analysis suggests that the US Economy is recovering at a faster pace than the Euro-zone. This is supported by strong recent economic indicators (Housing Permits, I.Claims Whatnot.)
However, EUR/USD managed to spike to a high resistance level, moving 150pips in less than 15 minutes. A perfect trade position would be established at the high-highest significant resistance level that was recently visited.
[/B]
In theory, this should be the one of the safest positions (As in the long-term, it is suggested the the market will favor USD) and where I can mitigate losses.
Here’s a recent example of such a trade from this week: (EUR/USD) Left, (AUD/USD) right.
I screwed up a bit with EUR/USD and entered at a sub-optimal position. Waited a bit too long to see if it would rebound.
My usual trade specifications:
Utilised Margins 1.5k/15k Average entry. Ranges depending on perceived strength of positioning. (Adjusted by hand on the second)
Very tight SL: SL range is 10-19pips. This is moved into defensive position once the trade goes into minor gain.
(All or nothing)
TP: Adjusted by relevant significant resistance/support levels and sentimental analysis. (“How long can I let it run?” etc…). (Minimal is us 3x the SL)
Repositioning: If the trend continues against my trade and hits my SL, I may reposition 1-5 minutes later giving the market to breath and advance, and re-enter at another resistance/support. Defensive stops help me reposition without losing.
This really tests my discipline and patience. Hasty repositioning and trying to swim against the stream really chips away at my balance. Not good.
This strategy seems robust enough (It must be right? It seems like a pretty popular strategy), and relies more so on execution, patience and discipline.
Resources I used: Bloomberg, Forexcrunch, Oanda “Position Ratios”, The Economist.
Indicators used: SMA, RSA. (To determine the plausibility of the postion. Farther from the average the better.)
However I have inefficiencies I want to address… :19:
But I’d like some opinions of blatant weakness in the strat beforehand to get some genuine, unbias criticism.
(Before I state my concerns.)
Cheers.