Its been awhile since the last blog post. The site is running fine, just that I haven’t had too much punchy ideas on what new articles to write about.
The past 7 months, I’ve been devoting a large plenty of time and energy to learn to trade for a living. Previously, a lot of my strategies were based on self developed EAs, but I wanted to take the step to learn how to trade manually. It definitely is one of the toughest things I’ve ever done.
One of the key takeaways is that manual trading is very much like learning a life skill, like sculpting, drawing, or the art of salesmanship; There are guidelines to follow, but if you follow them blindly, or too closely, you end up screwing up.
What do I mean? In my first 2 months of discretionary trading, I did relatively well. I was making decent consistent profits ~50 to 80pips per day. The irony was that I wasn’t very sure how I did it. The general rule was if price closed or broke above a range, I would enter in the direction of the range breakout, and take profits at the next support/resistance. There are exceptions such as if price makes an exhaustive run and breaks the range, I would not take the breakout trade.
So in disbelief at my own success, without actually knowing how I achieved the success, typical human me tried to break down every single criteria for a successful range breakout trade, like how I would normally do when creating an EA (computer algorithm). I would create a check list that I would run through before entering every single trade, even though at one glance my subconscious would roughly know whether this is a good or not a good trade to enter (more on this below). And eventually the list got so long that I ended up being the cause of my own downfall. To put it more accurately; my mistrust of my own higher intelligence caused my own downfall, because I had to run through the checklist like a linear thinking robot and that felt very unnatural.
Things that were on my checklist were like: Has price made an exhaustive run to the top of range? Are the trend bars big enough to warrant a breakout? Is this the first breakout attempt? (usually 2nd attempts are more powerful), etc.
So there came a point when I realised this was too unnatural, and that the way one should be trading is using a set of guidelines, such as never to buy when stochastics is overbought >70, etc. In fact one should not “think” (linear thinking) but rather “feel” (higher intelligence). When you first look at a chart, you immediately get a feel of the probable next direction of price. This is higher intelligence at work. It is a same higher intelligence that helps you move your arms without knowing how you did it, helps you know when exactly to turn a corner when you a driving. All this is done without thinking (linear thinking). In fact, if you were to try to think when exactly to turn a corner when you’re driving, you’d probably screw up.
Fast forward to now, I’ve joined Bill Young’s FX1DO live trading room. It’s free and via a IBM software called ‘Slack’. There are free daily webinars too during the NY session where Bill gives live calls. Pretty good stuff so far. More details on this here and a forum discussion on this method here
Added COM indicator and a comprehensive guide on how to use it here
Signal centre updates
I am testing a signal provider’s service. I will create a signal centre to recommend no-bullshit quality and reliable signal providers. The current provider I am testing is a full time retail trader who has been trading for close to 10 years. He has started his automated trade copy service just 2 weeks ago. He however has been posted and sharing his live monthly results since I first knew him 1.5 years ago. Just 1 out of the 18 months has been an unprofitable month. More exciting updates to come!
Now I’d like to leave you all with a piece by Roald Dahl, wishing all of you a great week ahead!