24/2: Long-overdue skype with Trading Mentor

And finally, I also had a skype with my trading mentor/coach Paul Wallace today – we have not had a skype since early December, at which point I was pretty much down and defeated (here’s that day’s blog post if you feel so inclined).  Today’s talk was somewhat more upbeat, and here’s a quick summary of what we talked:

George’s road map to ‘trading euphoria’  – I talked Paul through my plans – getting psychology and tested/proven profitable trading strategy in place, and coupling that with my understanding of risk & money management and other operational components – Paul viewed this through his paradigm of the 4 M’s (markets, method, money management, and myself) and agreed that I am heading the right direction.

Statistics and Expectancy – Paul wanted to look at my win rates and average RR ratio (50%/40%/10% and 1.2-1.3 ish) – he pointed out that in the long-run, trading off the 5M charts, it’s unlikely that I will make a huge improvement in the RR ratio beyond say 1.5 or 1.6 (coincidentally, he also seemed to think that getting out of the entire positions at T1 seemed quite sensible especially when considering the 80minute increase in average duration).  However he thinks that the pivotal approach for improving the bottom line is to increase the win rate.  And that in turn, can most likely be done simply by minimizing trading mistakes (also known as “trading badly“).

He suggested I keep a single spreadsheet with the charts of all my really bad trades – to remind me of how much bad trading really ends up costing me.  I explained that my mistake has decreased really significantly in the last few months.  He told me to continue improving, to always get better and more precise.

He agreed with my idea that adding 1-2 instruments in the future would be another way to increase total returns.

Friday Night Trading – he told me off for doing that.  Fridays after 3pm GMT tend to be dead – so why trade?  Why not try the Friday Night Skate instead?

domino candles

Technical aspects – in reviewing my Cable and Oil trades from Monday, Paul pointed out that his so-called ‘domino candles’ are good for showing signs of strength and weakness in the market (i.e. the market is giving you extra information, extra reading)

dynamic support

He also pointed to the fast EMA’s (10 and 20) as a way of using them as providing dynamic support, as shown here on Monday’s Cable trade.    Will that help me to trade better? Possibly.

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