Is Trading What You Think?

I have not been posting for quite a while.  Making some adjustments in my life and spending some time to think about trading.  Of course, I am still trading constantly. :-)  Anyway, some thoughts I have here that I posted to my private group of friends...


I have been thinking hard these days, why there are people who can make it in trading, and those that can't.  Is there a secret formula? 

My conclusion is still hard work.

Method:

You can trade the simplest method all you want.  It would work.  However, the issue is not (at least not so much) about the method, it is about how you manage yourself as a trader, manage your risks and money, and make proper decisions. 


You need to find your method(s) or system(s) that suits your temperament, your availability of time, your capital, your financial objectives for trading, your way of thinking, and something that you could manage well in terms of time and effort.

Money:

No matter how you want to trade, get into the market, get out of the market, you need to have a clear idea of how you want to manage your risks and money.  Or rather, how you make use of your money to earn more money.  This department requires you to spend time to constantly review it and put your system(s) to test.  For those that came from T3B or any other schools, this department is vaguely touched on, so do not under estimate the amount of time required.  Spend a lot, a lot, a lot of time and efforts.

Mind:

As a trader, you need to know yourself very well.  How you make good decisions and how you make bad decisions.  In fact, many traders make stupid and illogical decisions.  You need to train yourself such that it only boils down to only good ones and bad ones. Journalizing is one of the best way to know yourself, what affects you and how to improve yourself.

Holy Grail:

There is no holy grail.  I believe all would agree on this but many (including people in this group) are still chasing it without knowing.  Get someone to sit down with you, tell them about your plans in detail.  If you realize that you cannot do it, then it is clear that you might be heading no where in your trading journey.  And my advise is, it is time to think about it.  

Time:

Let's assume all traders would need 10,000 hours to train themselves is true.  If you only use 1 hour to train yourself every day, you would need 27 years to achieve success in trading.  If you can put in 10 hours, then 2.7 years is what it takes.  And I can tell you this 10,000 hours is necessary, and I have clocked it.

And the hours you spent must have purposes and provide training for yourself.  Sitting in front of the laptop and monitor market does not count, or discount 90% off the hours.

Think about it.  Work on it.  

Week 15 GBPUSD - End of Week review

GBPUSD did not make any move for the week.  Trades have been done on intraday taking small profits.  Let's see if next week would have any opportunity.

Week 15 GBPUSD - Quick update

Possible retracement coming.

Week 15 GBPUSD - New opportunity

Most USD pairs have given strong evidence that price might go higher in coming weeks (obviously not straight line up).  And one thing that we won't know is how high it can go.  As long as there are HH and HLs forming, buy on dips would be a good strategy from week to week till the market change its condition again.

Week 14 GBPUSD - Thursday update

After coming from Malaysia over the weekend, had some hard time trying to catch up with the market.  Somehow, I think slower than the market than usual.

Anyway, with the rate news coming out tonight, I guess it's a waiting game now.

Week 13 GBPUSD - Thursday update

Price has been struggling, during the last 3 days, nimble play would be most profitable.  Buying low and selling high in LTF would have worked out pretty fine.

So far, big picture has not changed.  And we trade according to what we see, though we might have a different plan in mind.

In my opinion, if you are trading setup by setup, i.e. you do not have an overall plan, in the long run, it is very difficult to make decent money out of trading.  Don't forget there would always be periods where no matter how you trade or how you adjust to the market, you just can't make money.  And during such periods, if you can't control your risks, that is most likely the end of your trading career (got to make it sound serious :-P, but seriously, it might happen...)

Below is just an update

Week 13 GBPUSD Tue 12pm Update

Though we might have the bigger picture that price may break low, the question is we do not know when.  With new market information, we see that price might be moving up before any possible down move.  Thus it's either we do a buy now then sell later.  Not forgetting price has dropped a lot, it might need some retracement and if it forms an ABCD, then it would be perfect.

If you are an day trader, then it would be easier to follow the price development.  If you have less time to trade, then waiting for a good sell setup at the imagined point D would be a better choice.

There are many options in trading, even a sell at current price may not necessary means you would lose.  It all depends how you plan and manage your risks unless price shoots all the way past last high without good retracement.  (Hint* grid trading)

Week 13 GBPUSD Big Picture

Below is one of my plans if price broke low in coming week(s).  i.e. I would plan to sell on every rally.

ok... correction.  "Every" sounds too certain.  Main plan is to sell as long as bearishness is sustained.  :-)