It’s been a busy trading week for me. I clocked up just under 40 trades in four sessions, and then spent today carefully looking over all these trades.
The focus for this week was to be fluid and adaptable and trade more on the basis of price action rather than strictly ticking every single box on my check-up parameter list. As I have spent a good part of three months carefully trading the mean-reversion, I am fairly comfortable with what I am looking for in a setup now – however instead of being completely rigid in judging a setup, I tried to be more fluid. A bit similar when one shifts from having to concentrate when first learning how to drive a car, to then doing it with less thinking.
The decision to be more fluid was based on a mix of conversations I had towards the end of last week and over the weekend with mentors, trading buddies and myself!
All in all I felt quite comfortable trading in this manner – the results were slightly profitable – it felt more like “me”, i.e. possibly a better match between trading style and my trading personality.
Something that could have worked better was my trade management (i.e. what I do once I am in a trade – when/where do I shift the stop, where do I set the target, when do I close immediately). As a good chunk of the setups actually worked out, my very aggressive style in closing positions early (also on the basis of price action) led to me missing out on booking many of those winners. Conversely, closing positions early has a nice impact on profit/loss if the setups don’t work often – which had been the case in preceding weeks.
One trade in particular that illustrated a case where being fluid really paid off, were two trades on the DAX (the German stock index) on Tuesday where I switched from a short position to a long position and ended up booking a healthy profit. Here’s how it played out:
Lately a few of the conversations I have had with fellow traders have revolved around this idea of being fluid versus being rigid – with HTF (high frequency trading) and systematic (completely automated) traders on one side and people who can’t explain how they actually trade on the other (such as the German trader I met a couple of weeks ago) – with every trader fitting in somewhere along that continuum. It’s been an interesting topic lately – well, for me at least!
All right, have a good weekend and catch you again next week.