Thanks to all my readers for your continued support, I would just like to talk a bit about my new trading strategy. As some of you very supportive readers will know from reading past sections of this blog, in this New Year I have decided to change my trading strategy to a slow and steady method rather than quick and hastey.
Since I started trading last September I have been trading many small positions and taking profits as they arise - closing positions without worrying about letting them hit any "profit targets" or anything. Through this time, my profit targets were "any positive numbers" and it would only be due to the positions profiting while I am not looking or there being a strong trend in my favour that would result in a position making more than a couple of dollars. For example, a common occurence in my trading was to close a position (that may cost 4.50 USD) to take JUST 12 cents profit, or 50 cents profit. Several others asked me why I didn't just let the positions ride and make more but I told them that the reason for it was that I would rather be garuanteed 50 cents profit there and then, allowing my to open other positions, rather than wait and potentially not make any profit and struggling to break even.
If you were to look at my trading records you would see literally hundreds of positions taking small profits (with one or two more adventurous positions taking 10, 20 or on one occassion 70 USD). As time went on and my balance increased of course I was able to book bigger profits but this was purely because the positions themselves were bigger - so it was still that case that a position that cost 50 USD to open would only actually make 4 or 5 USD. This was a strategy that I was happy with as a beginner and it was very profitable for me as I had the time to dedicate to it - watching the markets most of the day and ensuring I was there to catch all the biggest opportunities. It takes a long time and a lot of trades to quadruple your money when you're making 1 or 2% on each trade.
Incidentally, I wanted to switch it up as I came into the New Year - I have adopted a method that some friends and many traders use whereby you open the position at what you consider to be the most opportune time and set a profit target and just wait for it to close before making your next move. So far instead of returning 1 or 2% on each trade it has been typically at least 50% which of course is a marked improvment! I am placing my trades as best I can and will hopefully continue to benefit from trading with the trend rather than against it or trying to anticipate it's turn around etc.
This week seems to be quite nicely up then down then up again, relatively predictable and easy to trade on - how likely this is to continue I don't know but I think it will go steeply up towards the end of the week. Please do let me know your own opinions though! I am saying that I expect the GBPUSD to go up because I have long positions open and am waiting for them to come in. Some are going to come in around 1.609 others are aimed at around 1.615. Either way I expect to see both. Next week could be much of the same though at the moment of writing I have not checked Bank Dates or what big pieces of information is due out from the US and UK. Good luck to all of you in your trading and remember to let me know your opinions on Twitter @fxamateurtrader or e-mail me at fxamateurtraderuk@hotmail.co.uk
Just so you know, my new trading strategy is bringing profits in far faster than my old strategy but I would not have been comfortable trading like this when I first started - I was far more eager to just grab any profits I could!! Double check your own strategy to see if there are any ways you could improve and see what changing it does for you! Thanks for reading!
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