One of the biggest problems I face with my trading is consistancy. There probably isn't a month go by where I don't change systems/methods or break some rules. This of course long term will kill my trading so I have to do something about it. I have been running through ICT material on babypips http://forums.babypips.com/newbie-island/36328-what-every-new-aspiring-forex-trader-still-wants-know.html
The third video is about consistancy and in it ICT gives an exercise to go through for four weeks which is basically a very simple trading method.
1) Mark daily highs and lows (I'm not sure whether thats for the last week or so, but I mark a few days as the price tends to stay in these ranges)
2) Mark the previous week's high and low.
3) Short resistance and buy support. Don't worry about trend direction.
4) Stop loss 20 pips, Take profit 20 pips.
Thats it. The idea behind doing this is that if a trader (I.e. me) cannot follow a simple plan, then I'm not going to be able to follow a more complex plan. Obviously this is not a strategy designed to make money so don't trade it if you want to make money. In saying that I can already see that if one actually followed it on the 1hourly chart it could be quite successful. I entered this weeks trades off the daily so sometimes it was hard to tell if I should be shorting resistance or buying support.
I will be using this blog to update with each weeks trade results.
Week 1 NZDUSD (Note the green price line is also over a resistance/support) line
Trade 1) Sold what looked like resistance but was actually support when on the 1 hour chat. Loss 20 pips
Trade 2) Sold resistance. Stopped out -20 pips
Trade 3) Bought support. Win 20 pips
Trade 4) Shorted resistance. Stopped out (By 1 pip arrrhhg) loss 20 pips.
Comments: Already I can see that even following a simple trading exercise can be effective. If a 3:1 ratio was ustilised I would have broken even. Next week I will again mark the highs and lows as instructed but will enter off the hourly chart. Again selling whenever price approches resistance, and buying whenever it approches support.
As I mentioned when I started this blog, this whole exercise was designed to enhance consistancy in my trading. In effect I trade to the plan, despite my thoughts, market influences etc... Now I wish to move to the next stage of my training which is the MASSIVE step of making the R/R ratio 2:1. Yep thats it, one change. Here is the plan once again.
1) Mark daily highs and lows - I usually do the last 4 days as marking more than this just puts lots of lines on the 'map'
2) Mark the previous week's high and low. - this is the main support and resistance.
3) Short resistance and buy support. Don't worry about trend direction.
4) Stop loss 20 pips, Take profit 40 pips. (The is the change to 2:1 R/R ratio)
On Saturday January 28th, 2012 at 07:56AM by HalalPips - Like - 0 People
good plan and wish you all the best coz I think I need it too :-)
On Sunday January 29th, 2012 at 08:26AM by Amaterasu - Like - 0 People
On Sunday January 29th, 2012 at 10:12AM by RamenHero - Like - 1 Person
this is fantastic! the link you provided is a super link that leads to awesome linky goodness. that should keep me busy for the rest of the night ;)
i like the idea of sticking to a simple system as a training method, not as a money-making method. i may try to do this as you suggested. it will be interesting to see if i have the ability to stick to the system even when i think i see a better setup or whatever.
i have not been profitable lately, though, so stricktly sticking to this system will probably yield better results anyways XD
good stuff! good luck to you :)
On Sunday January 29th, 2012 at 01:09PM by Amaterasu - Like - 1 Person
On Monday January 30th, 2012 at 01:15AM by RamenHero - Like - 0 People
that's the main thing that confused me from his links. i think he said risking 2% at a time you only have to win 10 pips or something every week and in 10 years a $1,000 USD account can become a $1,000,000 account? I'm not sure how to factor weekly pip targets into percentage growth, but to make $1,000,000 from $1,000 you'd have to double your account every year, or get almost 17% growth every month. that's kind of a lot, isn't it?
On Monday January 30th, 2012 at 01:16AM by RamenHero - Like - 0 People
er... 8% growth o.0;
On Monday January 30th, 2012 at 01:24AM by RamenHero - Like - 0 People
okay sorry i figured it out after i asked. Risking 2% with a risk/reward of 1:2, you would have to win 2 trades more a month than you lost. That would be 8% monthly growth, almost 100% growth every year.
On Monday January 30th, 2012 at 01:32AM by IamXavi - Like - 0 People
I've been thinking in something about consistency and dealing with the "I'm a new trader I wanna trade it all and try it all"
Make a trading account with one method and if u wanna try something else just make another account but stick to your plan in ur original account.
I think this should help
On Monday January 30th, 2012 at 09:06PM by Amaterasu - Like - 0 People
On Monday January 30th, 2012 at 09:06PM by Amaterasu - Like - 1 Person
On Monday January 30th, 2012 at 09:16PM by RazorX - Like - 0 People
Thanks for that Amaterasu! Glad to see that the topic of consistancy has generated some discussion.
On Tuesday January 31st, 2012 at 01:37PM by Wilson - Like - 0 People
And there nothing like a contest that keeps you consistent.
Starts tomorrow RazorX
Good luck fellow contender!
http://www.meetpips.com/members/Wilson/blog/55737-meetpips-traders-contest
On Thursday February 2nd, 2012 at 02:24PM by Wilson - Like - 0 People
All you need is a mt4pips account
it dos not have to be in sync
Please give user names of account
http://mt4pips.com/wilson
Here is mine
username is wilson
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