Tuesday, January 02, 2007

New Year resolutions

Recently I have been introduced to Market profile charts. And they sure look interesting, especially the way Ensign implemented them. But that's beside the point. It seems I'm at a point in my development as trader, where everything looks interesting and where -after an introduction- I can use nearly everything to trade. I remember 1 year ago these charts made no sense at all, now charts like this 30min DAX make sense to me.


Still I’m not extraordinarily rich, having accumulated huge fortunes.


It’s me, my own lapses, my own shortcomings, which are so difficult to overcome.

What are the worst ones?

Number 1 on a long list
I know this trade will turn around

Number 2
It made not Number 1 as it occurs too seldom, but when it happens, it spells disaster
No Stop and it’s companion Average down

Number 3
Just one more trade.
And it’s brother: I made no trade today, I take a trade now and swingtrade it, if necessary meaning: I hold it at a loss and cover, if I see a small profit

Number 4
It’s moving, take the trade

Number 5
How could I miss this breakout, breakdown. 100 ticks and I got 10

Number 6
A special one, as I trade related markets: IBEX35 moved up, Z moved up…DAX should move as well. The important word is: SHOULD

Number 7
Breakeven is better than no profit at all. That’s a real nasty bastard, as it’s 50:50. Sometimes it’s the best I can do, sometimes I miss a 40 tick profit just minutes later

Let’s make New Year resolutions

1. No trade, if I have to leave the screen within the next 30 minutes

2. No trade, if I have not looked at a chart at all. (Yes it happens as a combination of Number 6 and Number 4 above)

3. No trade, if the market has already made 100 to 150 ticks. V moves are very seldom. Usually a breakout, breakdown is followed by consolidation with a bias in the direction of the break

4. No trade, if I expect distractions from the family or if I have other pressing things to do. Do them first, then trade.

5. Think first about the Stop. At what price is the trade no longer valid. Then what is a reasonable target. A signal might be great, but as long as I’m not trading HSI after +150 ticks the upside might become limited.

6. Three hours maximum at the computer. Then I take a break. And have fresh sparkling water at all times at my desk.

7. No trading after 19.00. No trading SPI overnight. No midnight trades. No overnight swing trades unless the trade shows a profit at the close of the day.

8. Use common sense