Bad Assed Trader: As readers will see from my last blog, posted yesterday, I've adopted a new trading strategy because the one I had been working on since January wasn't providing any set ups for entry in May.
I haven't given up on that strategy - a "sniper" strategy - but have realised that at times the market is not conducive to certain strategies. My sniper relied on the Euro and Sterling being in a clear trend against the US Dollar. When they are in "phase 2" (ie retracing: heading for the hopefully brief dip in an uptrend or the momentary peak in a downtrend - because nothing goes straight up or down) I can't trade that strategy. The result was that initially I kept trying to trade the strategy by changing a rule and lost out. Then I sat on my hands and bit my fingernails (not at the same time...) and then I tried to make poor set ups into good set ups in my head and - surprise surprise - didn't make any money.
Brett N Steenbarger, in his absolutely brilliant book:
talks about how vital it is for traders to be flexible in their calibration to the market. So, for example, if the market is very volatile (swings wildly, like the youth of the Sixties) then traders get used to setting their targets and stop losses in places which go with the flow of a volatile market.
If that market then becomes less volatile (barely moves - rather like the progress on our NHS Health Bill at present under good ole Lansley's leadership) then traders who have failed to adapt to the new conditions will find themselves frustrated as their systems no longer work.
I failed to adapt to the new market conditions in May. I had my hammer and I was going to try and use it to hit a nail, but the nail had gone and instead there was a screw which needed a screwdriver. It took me a whole month to twig that! Ah well, live and learn...eventually.
I have better insight now into the fact that for that strategy I need to be much more calibrated to the overall market conditions - despite it being a strategy which is timed by the 5 minute chart. I need to Go With The Flow and to do that I need to know what the Flow is.
I haven't given up on that strategy - a "sniper" strategy - but have realised that at times the market is not conducive to certain strategies. My sniper relied on the Euro and Sterling being in a clear trend against the US Dollar. When they are in "phase 2" (ie retracing: heading for the hopefully brief dip in an uptrend or the momentary peak in a downtrend - because nothing goes straight up or down) I can't trade that strategy. The result was that initially I kept trying to trade the strategy by changing a rule and lost out. Then I sat on my hands and bit my fingernails (not at the same time...) and then I tried to make poor set ups into good set ups in my head and - surprise surprise - didn't make any money.
Brett N Steenbarger, in his absolutely brilliant book:
talks about how vital it is for traders to be flexible in their calibration to the market. So, for example, if the market is very volatile (swings wildly, like the youth of the Sixties) then traders get used to setting their targets and stop losses in places which go with the flow of a volatile market.
If that market then becomes less volatile (barely moves - rather like the progress on our NHS Health Bill at present under good ole Lansley's leadership) then traders who have failed to adapt to the new conditions will find themselves frustrated as their systems no longer work.
I failed to adapt to the new market conditions in May. I had my hammer and I was going to try and use it to hit a nail, but the nail had gone and instead there was a screw which needed a screwdriver. It took me a whole month to twig that! Ah well, live and learn...eventually.
I have better insight now into the fact that for that strategy I need to be much more calibrated to the overall market conditions - despite it being a strategy which is timed by the 5 minute chart. I need to Go With The Flow and to do that I need to know what the Flow is.
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