After five and a half weeks off from the financial markets (and trying to learn French in Paris instead!), what better time is there to quickly review my K7-specific blog posts to ensure that I take on board the key observations and findings I have made in the past few months so that I can continue on my road to becoming a profitable trader.
Lesson 1: Only take good setups and enter at good levels – entering bad setups and/or at bad levels generally cost me money – further this will allow me to enter on a positive feedback loop – leading to better emotional feelings and increased sharpness.
Lesson 2: Taking the US-based trading results aside (losing 15R in a period of 2-3 weeks) it looks as if I am a scratch trader using the K7 strategy. This in itself is already okay, as I am trading well enough to fight off the transaction costs. I am only needing a bit more of an improvement to go from scratch into the black.
Lesson 3: Be very disciplined in using the EMA’s in trade selection and picking entry levels (have made some adjustments to my strategy checklist for this)
Lesson 4: Answer this question: What is the true cost in waiting for retracement to the EMA before entering?
Lesson 5: Stop trading non-standard instruments on an occasional basis – my performance record on such trades has been terrible. Instruments being traded can change from time to time e.g. when one specific instrument starts to trend. However all in all I tend to be better if trading the same instrument over and over:
- 9 trades on NZDUSD, GBPNZD, FTSE, US30, GBPJPY and CHFJPY cost me 3.77R
- 273 trades on DAX, Cable, EURUSD, USDJPY, EURJPY and AUDUSD made a profit of 3.42R
Lesson 6: “Reverse Engineering?” – The trading results from the US were so bad that I need to consider whether trading in the opposite manner to what I did could actually constitute a profitable approach. The same could be said about the loss-producing trades on the non-core instruments.
That’s it – six points to put into action going forward. I believe those six steps should be enough to turn me into a profitable trader.