My name is Mick and this is my hopefully - 'common sense' trading journal. I'll be trading on paper for a while untill I sort out and firm up my egy and start generating some decent profits in demo mode.
I began it for a few reasons the main one being to keep me honest, it's just too easy to change your mind on exactly what your egy is half way through a trade . Another is I was beginning to take up band width on capilist88's journal . Have a look over there as he's some fascinating reading at his journal and web site.
A little bit of background -
I'm 38 and have been studying stocks for a few years using daily charts, then I stumbled upon cfd's and forex, there is a couple reasons for this pattern, the first is I do not have a lot of money so finding a viable trading instrument in which fees are less likely to encroach on profits having a small account proved to be a major consideration. Another is that in Australia, it has only been lately that cfd's have come onto the market as well as some other derivatives into the masses. I've observed forex before but was a bit overwhelmed with the quick day trading/high risk picture it depicted but today I know that it's no different to any other market, it's just structured differently with a different behavior - one which I like!
Why do I Wish to trade?
Clearly there is trading for money, that's probably the driving force behind many traders, myself included, but there is also the challenge.
For instance, I do a little bit of programming. I began with vba and eventually got to assembler because I just had to understand how it worked! It was just one big mystery and the markets to me personally are much the same in that there is always something to research, learn and execute.
I do not program in assembler but I understand how it works and it has helped my programming hugely. Learning about the markets is precisely the exact same thing, while you might not use methods that bankers do it still helps to understand how it ticks.
Though I think I could play demo's forever really, it's good fun, should I start to turn out regular'high scores' I will then start playing for real.
Why Common Sense?
While I don't have any real transactions under my belt I've been around long enough to realise that a few things about trading the markets:
- Price action is king, while historic patterns and support/resistance are no guarantee of a move in your favor, the price action before and'at' these points is very important. After all, how many different people see the very same patterns and act on these if right or wrong?
I also like to see things in higher time frames and drill down to reduce time frames to'see' exactly what has/is occurring to provide me a better look at which way I will play with it.
- Money management is paramount, not just risk (capital preservation) but money maximisation egies too. IOW, reduce losses small and maximise profits. I honestly think this is where to make money and will be my main focus over what else, the market holds no guarantees concerning direction but when I'm prepared with a fantastic money egy I will be set for if it moves in my favour (IOW, once the market comes to me).
- Indiors are'old news' (i.e. lagging) but are convenient to perhaps confirm a transfer or maybe to use only as a different way of looking at price action and'aid' determine entrance and exits. I use the stoch for OB/OS amounts as a price direction indior and CCI stations for entries and exits. I've only started with CCI's but they look promising as a filter for greater transactions.
Have a look at bobblongs thread for more info, it's a great thread.
Anyway, I will write some of my egy down with some other standards for my trading decisions shortly, feel free to jump in if you have any queries or advice along the way, both are extremely welcome.
What I would ask though is this is my journal, not a egy and will be subject to change as I see fit so please do not ask me to carve it in stone for you, besides I believe you need to create your own, there is no use after whatever you do not fully and whole heartedly know and think in. It will not function as system and it will not work, just pick up bits and pieces from here and other threads and piece something together that works for you - and stick to it.
Cheers,
Mick.