After good chats with my three FX trading colleagues, as well as a skype with my trading coach Paul, and then some reflections over Friday and Saturday, I have come up with the following pointers (as my colleague Derek likes to point out -> “Trading is a journey”):
5 Technical Adjustments to trading style & trading strategy
(this applies to all my present and future trading strategies and this builds on the review I did the previous weekend)
- Any trade that I take must fall under a specific trading strategy. This requires me to clarify the setup parameters and management techniques for each trading strategy (I am in the process of clarifying the strategies now). I know this sounds so obvious, but I have not been following this principle.
- The trade entry will probably be the most key factor as to the eventual result of the trade (rather than hopping on the ‘best momentum of the hour’). (a) Ideally what I am looking for is strong momentum, a retracement (but holding of the trend), and then evidence that the momentum is continuing. Evidence will come in the way of confirming price action. (b) I must wait for this confirming price action. It’s not sufficient to simply enter limit orders into the market. (c) My trading strategy documents need to provide details of how trades should be entered so that ambiguity is removed during the trading session. (d
) Using this process should also allow me to
set tighter stop losses.
I must use a realistic target for each trade and enter this at the beginning of the trade (at same time when I am entering the stop)
My trading strategy documents must also specify in what circumstances I can take a second attempt at a trade that has already been closed. Paul has mentioned this to me in two coaching sessions now.
I must also consider taking partial profits on my trades, particularly when price is starting to trade sideways. This is another point that Paul has pointed out twice to me now.
Adjustments to the Psychology Element
- I need to monitor for correlations between my psychological assessments and (i) my trading results and (ii) the # of trades I have taken
- I need to be ready to step aside and to stop trading if my assessments give me low readings
- Ensure I am never trading my profit & loss account – that I am always trading my strategy
- I must not underestimate the amount of pressure that personal events may have on my trading performance
Onwards and upwards…..