Last week was a fun week…also a very successful one to boot. I traded less last week then I ever have in my entire trading career – conversely I had one of the best week’s percentage wise that I have had in a long time. 12.6% increase in my account size and I owe it all a more focused, intentional approach to my trading decisions. I have moved away from indicators (almost completely) and just “feel” the market and respond to price… I know it sounds like some sort of Zen Voodoo magic, but it’s not, I can feel the markets and when I am about to place a trade I know how successful I will be by my guts reaction. I am learning to tune into that innate sense that everyone has when making decisions, “Is this the best choice, out of the many, that I can make.” A sense of right or wrong.
Below is my set up that I use to trade the Eur/Usd:
Daily Chart, 4H Chart, 1H Chart and 30Min Chart
65 SMA (I never trade into it, the longer the time frame the more price respects – I use it on Daily and 4H)
MACD (only on the 1H and 30Min for timing my entries)
Whole #’s (1.29xx, 1.30xx, Etc.)
I risk just about 3% on my trades with a 100 pip Trailing Stop. I rarely close my trades before they hit the stop, even when I am in profit…If I notice strong S/R area, I’ll tighten my stop as to protect more profit. I don’t use Take Profit orders – this would be like predicting the market and I am trying to not do that.
My reasoning behind whole #’s is because that is what the big boys use…Jacko, over at his thread, out lines that the major players are the market movers and if they see something it is usually near the whole #’s. By the way – Jacko trades 200 standard lots at a time, $2000/pip – I believe he knows a lot of the market movers so I trust his logic.
And then we come to the Anti-Hedge, this is another Jacko tool that has proven to be one of the most useful tactics I have EVER learned. The Anti-Hedge is this – an order that gets you back into the market where your stop got you out. Now there are conditions that have to be met in order for an AH to be valid. 1. The market has to move 50 pips past your stop. 2 you place the order exactly where you where stopped out for the same # of units. 3. Watch the trend comes back in your favor (because you only trade with the trend, right?) and pick you up on its way to fame and fortune. 4. You cannot use an AH on an AH – go back and rethink your entry timing – it was obviously off.
I have signed up for the indicators, set up my crossing SMA’s and tried everything in the book, but nothing has given me more success and satisfaction than trading directly from price action. I have even stopped trying to “see” all of the technical patterns because I have a very creative imagination and can make a group of bars look like anything I want it too. Now if one jumps off the screen and slaps me in the face, I’ll pay attention…
Trading is very very difficult, it plays with your emotions, your $$$$, your relationships and adds heaps of stress to an already stressful life. Why would anyone do it you ask? Because it is extremely rewarding and at times can be so simple, it drives you mad. Very much like golf, such a simple game – hit the ball with the right club and watch it go in the hole…but when you start dissecting everything from the trajectory to your balance when you swing…you forget the basics – you have to hit the ball for it to do anything, then the rest follows. I love golf, but I hate the game…
See you on the course!