I’m coming out of this week slightly on the negative side, but negligibly so. I entered the week with a bearish bias for most of the pairs, and that’s what I stuck with for the early part of the week.
Unfortunately, it seems the markets took a break from their downtrends and decided to trade sideways for a while. What a pity because while I was fixed on finding opportunities to go short, I was missing out on good opportunities to go long!
But to tell you the truth, I think those lost opportunities weren’t so much a matter of not being able to adapt. After all, I reassessed my biases as soon as I recognized the markets were changing (which took about two losses over the course of two days).
I guess what I learned from this week is to be open to whatever opportunities may arise. This is especially true for short-term traders, who, I’m told, can afford to sort of set aside fundamentals and rely more heavily on technical analysis. Since I’ve been focusing on day trading and usually aim for 50 pips or less, maybe I shouldn’t have such fixed biases. As long as the setup (or shoe) fits, take it!
I've also made another concrete change in my trading strategy by incorporating the use of multiple positions. I know, I know... This is something basic that I should have started doing long before, but then again, better late than never!
I suppose I should also write about how I just started keeping track of my setup stats. I mentioned this in an old blog entry before, but I think I should clarify. Basically, I’m recording how often I go short/long, and how often I rely on certain signals (e.g. oversold/overbought stochastics, divergences, candlestick patterns, etc).
After a couple of months, I’m hoping to have enough information to help me determine which setups work best for me. I’m doing this so that in the future, I can take bigger positions with those setups that prove to be most successful. Sort of like using the “double down” option in black jack… Gotta risk more when the odds are in your favor!
That's it for this week. No plans of jumping in on the NFP action today. Who knows how the markets will react! For now, I’ll just sit on the sidelines and watch the action from afar. Based on the today’s results, I’ll form my bias for the coming days.
Catch you all on the other side of the weekend!
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