Bad Assed Trader: I participated in a training day on clinical hypnotherapy last Saturday which was fantastic. I learnt how to hypnotise another person and how to hypnotise myself. I also experienced being in the trance state - a state of deep relaxation with an alert mind.
This is a new skill I want to use more often as part of training my mind to achieve clarity and focus for trading and to be able to recognise when my emotions are getting in the way.
I reflected on my trading after the experience and I realised that my mind had become cluttered with my rules and I had lost sight of what is important. It dawned on me that I need to simplify things big time and stick with price action as the key to my trading approach. I had been finding support and resistance levels where they barely existed as an excuse not to place a trade and I was giving too much weight to indicators when price action is, as they say, king.
I discussed these issues with my coach, Emmanuel, on Monday and he agreed that de-cluttering my approach would help, sticking to trading with the trend and using price action as the lead for placing and managing the trades.
My process of reflection following hypnotherapy made me realise that the old trading mantra of "trade what you see not what you think" has been the most difficult thing for me to embrace. I have traded in a way that has involved thinking/guessing far too much and this of course encourages engagement of the emotions which always ends up working against one.
So Emmanuel has supported me in developing a new, simpler strategy which trades with the trends using the four hourly chart and is led by price action right now. I no longer set targets, but trail the stop loss behind the swings on the four hourly chart.
I took a short gold trade yesterday using these rules and so far it's moved over 1.5% in my favour - I've managed to lock in 0.5% of that in profit by trailing my stop loss and we'll see how it goes.
My new rules are as follows:
This is a new skill I want to use more often as part of training my mind to achieve clarity and focus for trading and to be able to recognise when my emotions are getting in the way.
I reflected on my trading after the experience and I realised that my mind had become cluttered with my rules and I had lost sight of what is important. It dawned on me that I need to simplify things big time and stick with price action as the key to my trading approach. I had been finding support and resistance levels where they barely existed as an excuse not to place a trade and I was giving too much weight to indicators when price action is, as they say, king.
I discussed these issues with my coach, Emmanuel, on Monday and he agreed that de-cluttering my approach would help, sticking to trading with the trend and using price action as the lead for placing and managing the trades.
My process of reflection following hypnotherapy made me realise that the old trading mantra of "trade what you see not what you think" has been the most difficult thing for me to embrace. I have traded in a way that has involved thinking/guessing far too much and this of course encourages engagement of the emotions which always ends up working against one.
So Emmanuel has supported me in developing a new, simpler strategy which trades with the trends using the four hourly chart and is led by price action right now. I no longer set targets, but trail the stop loss behind the swings on the four hourly chart.
I took a short gold trade yesterday using these rules and so far it's moved over 1.5% in my favour - I've managed to lock in 0.5% of that in profit by trailing my stop loss and we'll see how it goes.
My new rules are as follows:
I trade Price Action with cyclicity on 240 in the direction set by the daily backed up by weekly. I do not think ahead on my trade, I just look at what price action has been doing recently within its context and read what it is telling me right now.
Entry
1. Identify direction of travel on the weekly and identify the trend on daily – daily is the chart I’m trading: Up, down or ranging, all are ok but clear & unambiguous trend exists
2. Once clear of trend watch price action on 240 chart and wait for a pullback. It could be shallow or deep – looking for at least 2 bars against the trend and then a return to trend
3. Price action must show a reversal bar indicating a return to trend on the 240 chart
4. Enter on the break of that reversal bar with the stop loss behind the opposite end of that bar (protected by any nearby moving averages or pivot points in case of a retest to that level)
Mixed Signals means indecision and a warning to stay out
Management of the Trade
Make a note of support/resistance levels which may trigger a turning point in the trade and watch price action at those levels. If price suggests a turn (doji, low/high test bar, two inside/outside bars) when it gets there consider moving the stop loss down but remember that price often reacts to levels without changing direction so always give room to breathe.
Trail the stop loss behind swing highs/lows on 240 chart, protected by any nearby levels of support or resistance eg moving average.
I let price action take me out of the trade - never kill a trade.
If price is fuffling this is not a reason to delete a trade, consolidation is normal before a move.
Only take trades where you have a high level of confidence and can therefore sit through the random erratic movements on the way to profit without fear.
If market gaps on opening and enters trade at different level then only take trade off if risk exceeds 2%, otherwise leave as it is with stop loss in same place
No comments:
Post a Comment