ForexSpirit

About six weeks ago I jotted down a few notes that I’m going to now list here. At the time I was mentally comparing and contrasting the long and short term methods of trading that I’ve been experimenting with.

At the time I deemed these notes to be my trading truths:

• I suck at timing trades.
• Is there really any advantage to taking numerous smaller trades on a daily scalping basis versus taking fewer potentially intra-day trades when all I really want to achieve is a 10-20% monthly return? Smaller trades mean less time spent in market which provides less exposure to major market moving events/news.
• Still really like idea of having large losses offset by large winners and numerous bread and butter (small/medium sized) trades generating bulk of rising equity curve.
• I have a definite propensity (scorpion) to quickly try and make back losses; this weakness is exasperated in shorter timeframes.
• December 07 downfall was directly tied to having 20:1 gearing in place with multiple trades in multiple currency pairs open at once all going against me simultaneously.
• I do not want to be in the market at key reversal points, which normally occur around highly volatile events (NFP, ECB/Fed rate announcements).
• I’m now sceptical on long term advantages of averaging down on losers, especially on <100 pip averaging entries.
• More comfortable trading just one currency (EUR/USD) rather than multiple.
• I can see definite advantages to pyramiding profitable positions but haven’t figured out a way to introduce this aspect to my trading as yet.
• Even though markets are more volatile than they were 3 years ago, I feel I have a better grasp on the medium term trend outlook. In BWILC days I was far too focused on the long term trend and did not react promptly to corrections and other medium term shifts.
• Look to use varying degrees of gearing based on confidence in trend direction. 1:1 at shifts in trend; 5:1 when fully confident trend in place.

These notes are primarily interesting in that they were probably the first serious consideration in quite a while to re-evaluate trading on the higher time frames.

Another nudge came from reading the free reports that are available on The Gestalt Shift.

I even traded last week from the longer term perspective, using only 1:1 geared entries, and had a pretty good week too, racking up just over a 5% return for my efforts.

Am I back to almost trading the BWILC way for good? Too early to tell, but it certainly seems that way for now.

Part of this comes from looking back over my trading for the previous three years. For a year and a half I was doing pretty well. Pulling in small, consistent positive returns. Thinking I had it all figured out I upped the ante and promptly screwed the pooch. Cue the next eighteen months spent chasing my tail, trying to find another method that suits me.

The inklings of thought I have now are to revisit the time when I was doing well and just put in place measures to guard against what screwed me over. Up till now I didn’t see how I was going to be able to do that successfully which is why I’ve shied away from attempting this course of action.

I’m not sure if I’ve come up with a solution that I just hadn’t thought of before, or if I’m just now better mentally prepared to follow through on enacting my solution but it seems like I’m about to try and find out either way.