Raghee Horner: ForeX Trading for Maximum Profit: The Best Kept Secret Off Wall Street
I haven't been trading much this last week because of Chinese New Year celebrations. It is our equivalent of Thanksgiving and Christmas all rolled into one weekend.
This year, I bravely decided to cook dinner for the family. So I was busy slaving over a hot stove instead of slaving over a tepid computer. Unbeknownst to me, my mom also took it on herself to make more than enough food to feed an army. So my slaved-over gigantic pot meals became gigantic left-overs.
If that didn't beat all, I caught a bug. So I spent most of the early part of last week on a cocktail of drugs. And most of the day and the nights - huffing and puffing into a box of Kleenex.
After all those painfully learnt lessons of when I should not be trading, I did practice some discipline and not trade on the busy family days.
I know that I did sit down to trade on the few days when I wasn't rushing from one end of Singapore to the other. (My sister lives on the north part of the island - in tiny Singapore - a 30 minute drive is a significant distance - at least mentally!)
I can pleasantly report that I managed to have a nice 5% return for the week in my trading account - just by trading less. As you know, my target to be consistent for this year is just 15 to 20pips per day. I figure if I can consistently get the pips daily - I can scale into more contracts.
I just checked and noticed that I traded only 2 days last week.
Monday 23Jan2012 - Reversal at London Close
This is one of my favorite trades if I can stay awake for it.
I have been noticing for awhile now that EURUSD has a tendency to reverse just after London close. That is if it has been going in a single direction all day.
There were a couple nice reasons for this setup:
1. Bossilator reading at 539 - so it was nice for a counter-trend
2. The 160+ pip move up stalled at 1.3050 (a significant 00 and 50 level) resistance.
I was happy to take it out at 15pips. Since I had a tight stop at 7pips (since this was counter-trend) - back at the SMA200.
I traded 3 times that day. Looking at this, I probably should have stopped after I did the first trade. But as usual, an easy win on the first trade always lead to itchy fingers later in the day. This is something I am working on curbing.
Trade 1 (+12pips) (detailed view)
This was a classic Bossilator counter-trend trade with a quick 2:1 profit. Very tight stop of 6pips. I was happy to just take it out at 12pip profit since I didn't really have to spend that long preparing for it.
I figured, if the market gives it to you - just take it and run. Of course I should have taken it and run all the way to the next day. But I didn't and I had to learn a lesson on Trade 2.
Trade 2 (-9pips)
This was the trade that was just one of those quickie losses. I had taken it based on a resistances failure and me really looking to counter-trend. Looking back, I can see it was too early for a counter-trend, with Bossilator at 340. But I had gone ahead anyway. The thing that saved me was the very tight stop at 9pips just passed the SMA200 - which was my entry point.
Trade 3 (+10pips) (detailed view)
This was the quick reversal of Trade 2.
I did have a quick sense to go in the opposite direction of Trade 2 - after the support held at SMA200.
If I had planned for it earlier I would have stuck to the Trifecta trade and help on to Fib 0 after a stop at Break-even.
In any case, I was happy to exit at 10pips since it recovered the trade 2 loss. Mentally, it was all I could take for that day.
So this was a typical trading. I was quite happy that I managed to stay calm enough to manage the last trade and the day ended with plusses instead of minuses.
So when I looked back at last week, it went quite well for a week where I traded much less than a normal trading week.
True to the spirit of letting the market show itself to me, I think I did that successfully last week.
I am hoping that this is a sign of things to come.