Thursday, March 4, 2010

Thank You

I seemed to have got some publicity and now I have more than 3 readers I am going to have to do a bit better with my charting.
To save time I am going to answer a lot of the questions I have had here.

Mr Big is a real person, his name is James.  He doesn't have a webpage or site or blog because he doesn't mentor for a living, he has a real trading job in a very big hedge fund and has been trading for 10 years.  I wasn't the first person he helped, and he is since helping others.   I am profitable now because he taught me to develop my own trading style, create rules and stick to them and he is a pretty strict disciplinarian who despises emotion in trading.   He helped me a lot, every day and still does. 

I didn't make this blog to educate but I will try and post more charts to explain what I am doing or how I see things because I think it will help me too. 

I trade mainly price action at support and resistance.  I use candles and I also put a 20ema, a 50sma and a 200 daily moving average on my chart.  I don't trade off them but I use them as guides because the market seems to respect them.  I could probably do very well without them now but they are a bit of a comfort blanket to me.  I also use trendlines and fib levels and fib extensions.

For the most part I try to take setups off the daily and weekly charts and then look for entries on the 4hr and 1hr charts for better risk:reward.

I sometimes trade against the daily trend and those are the ones I day trade and cut quickly.  I will put orders underneath levels waiting for a break and occasionally I will leave limit orders at levels without waiting for price action if it has a lot of other supporting factors (fib levels, trendline, etc).

I am very bad at discretionary profit taking, and so I have a scaling out method of taking profit.  A trade has to get to 3X my risk where I take half off.  If it gets to 6X my risk without me adding to it then I take another 1/4 off.  The last part is discretionary.  This stops me staying in trades too long and giving it all back.  I don't think that its greed that makes me hang on, it is more that once I have a position I tend to become a little biased.  Its something I am working on!  If a trade does not make 3xR then it usually goes for a full loss.  I am happy to wait for a few days for a trade to work.  Sometimes I will cut a trade for a small profit or breakeven if it is not doing what I expected or if it is clear that the market wants to go the other way but it is rare.

I trade very low risk also.  My trades are usually 1% or less of my account.  That is 1% of my cash sitting on margin, not 1% of my leveraged notional account.  This helps me confidence wise to crack trades I might otherwise pass on and I am still able to make money this way (surprise!!).
I will try and post more about what I am looking at and why and some more charts now I know that I have more than 3 readers. 
I don't mind because I have found that having a blog and posting my trades in real time has helped me with my focus and kept me out of some bad trades.  There is nothing like a bit of public scrutiny to sharpen your wits.

Thanks again for the e-mails.

PS - I am learning "point and figure" charting.  There may be some funny looking charts in future.  I think they are great for breakouts.

PPS I often post trades on FF as "elitejets"

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