Okay, so this is the first month into this… “experiment”. I’ve interviewed a total of 6 traders so far so am a little ahead of you listeners out there. But not to worry I’ll be releasing all of the interviews in future episodes each week on the 52 Traders podcast. So make sure you subscribe if you haven’t already, so you can join in and take your trading to the next level too.
Due to the hectic schedule I’ve had arranging interviews, setting up this website and working out how to get my podcast up in iTunes and the like, I’ve done little in the way of actual trading. And what trading I have done has been sketchy to say the least.
My starting point
I’ve been using a few systems given to me by one of my old subscribers (from my automated currency trading days). He decided to leave the automated trading alone and headed down the manual path after finding an affordable mentor he could learn from.
Late last year he was able to share with me some of the systems he’s now using with great success – one of which utilises the Trendline software you can download at the bottom of this post.
Unfortunately, he’s wanting to keep these systems private (for now) as they’ve made him consistently profitable for a number of months. But this update is about my trading, so the point I’m trying to make is that the strategies I’m using at the moment are the strategies my friend has developed.
A shaky start!
Here’s what April looked like from a profit point of view (or should I say ‘loss’):
As you can see it wreaks of a trader who has no idea.
When I look back at why I ended up here, and recall what the first 6 traders told me, it’s very clear that I’m breaking a lot (if not all) of the rules these guys have been preaching in the interviews. The good news is, I actually realized this on my very last trade of April and took action. So I’m hoping May will show more consistency in the right direction.
- I took a break near the start of April after exiting a few long term trades I’d found myself stuck in. I wanted to try and stop some of the bad trading muscle memory I’d put in place, after Ray Burchett’s advice pointed out that placing trades without a system was just like building bad muscle memory. As you can see from the remainder of April, I didn’t quite achieve this as I foolhardily went about my trading in a bang and smash manner. Not good. But at least I can now see that I’m doing things wrong.
- Patience is the key as highlighted by Serge Berger and reiterated by Norman Hallett with his quote (that I’ve already used several times) “It’s better to be out wishing you were in, rather than in wishing you were out”. Often I’d find myself jumping in just because there was a lot of action and I didn’t want to miss out, especially when I had losses to chase.
- I don’t really have a system I can call my own at the moment, so I’ve been jumping around grabbing what I could from others without really understanding what the underlying thinking is – even though it’s been explained to me in some cases. One of the common factors the traders I’ve interviewed so far have is that they all seem to be self taught (to a certain degree anyway). While I’ve been trying to track down people to teach me the “secrets” maybe I needed to be educating myself, like Norman suggested with his other quote, “If you give a man a fish he’ll eat for a day, if you teach a man to fish he’ll eat forever”. Two really good quotes from Mr Hallett, no wonder he’s written a book of trading quotes.
- I can’t seem to stay in trades long enough, I exit too early and often they become profitable after I exit. I think coming up with a system that I feel confident about may help this along with good money/risk management so that I’m not on the verge of blowing my account every time I place a trade.
- Money and risk management is the one I’m really struggling with – because the account is small in my eyes at $400, I feel that if I blow it then it’s not the end of the world (so a boom or bust mentality). Hence, why you’ll see (if you click on the chart above) my account statement has varying levels of risk against each trade, so no consistency and some much higher than 2-4% of my account. My suggestion to myself is to change my trading goals – so not trying to aim for 100% return after 2 months (yes, ridiculous I know).
Trading goals for May 2015
- Develop a system of my own to trade based on the Price Action methods mentioned by Serge and Norman
- Only trade these systems I create (no other systems)
- Aim for a total of 4 trades for the month of May (thinking being, I’ll be less inclined to trade when I shouldn’t and more inclined to pick only the best and most obvious set ups)
- Trade lowest risk possible for each trade. Ignore profit for now and focus on trading right versus making money.
Wish me luck and leave a comment if you found this helpful, if you liked/didn’t like this format or if you have any other hints/tips for me.