I’ve been day trading various Stock Indices and FX pairs since October 2007.
The learning curve, particularly bearing in mind the volatility that commenced shortly after that date, has been interesting and challenging to say the least.
I ploughed many, many hours, 7 days a week into observing and understanding price discovery processes that markets would follow and learning to recognise changing market characteristics, thus continually reviewing the various trading styles and systems I’d developed.
For the first 18 Months to 2 years the learning curve was costly, but from around September 2009 things began to improve and I’d find myself making consistent profits Month after Month.
The number of hours being ploughed into this was always immense, but the profits seemed to make it worthwhile.
Over this relatively short trading career I’ve developed a number of systems for day trading and scalping, always openly sharing my thoughts and analysis on one or two bulletin board threads. The problem here lies with the fact that it’s very difficult to both moderate and refer back to specific analysis on a popular bulletin board thread that has received 2 million page views and 90,000 posts in the last year alone!
I’ve worked on various projects and strategies aimed at improving overall profits, for example, closing out 95% of a day trade position and running the remaining 5% as a swing trade (only if the direction is the same as the overall daily/weekly trend). Over time, the accumulation of scaled in “5% trades” evolves into a reasonably sized and profitable swing position.
The most interesting and successful project to date involved a challenge to turn an initial £25 trading balance into £2000 in one year to prove that anybody with discipline and a good understanding of the market could achieve this with no starting capital by sticking only to tiny position sizes and trading only the best possible intraday setups. The project achieved it’s goal and a £2033 balance was recorded on the 12 Month anniversary. Work out the percentage gains on that! But could you or I do the same with a £25,000 starting balance? Probably not because it’s a fair amount of money for most of us to risk losing with what is effectively a very high risk and highly leveraged strategy, and emotions will always try to get the better of you when placing larger stakes at risk.
My favourite and most successful trading style is most certainly scalping (remaining in trades for 2-3 seconds per trade, right up to 5 minutes), but it is extremely labour intensive.
Day trading (remaining in positions for a number of hours, usually closing out at the end of the day) I find a little more difficult to remain focused on but have had reasonably good success overall.
More recently, I’ve come to realise my work/life/health balance has suffered through the sheer number of hours studying markets each day, the stresses associated with holding many positions through volatile times and the work involved in maintaining 3 different trading styles and systems across so many different time frames. I’ve therefore decided the cure to fixing this seems to lie within Swing trading as it removes the need to constantly monitor positions and intraday volatility, particularly on data releases which just become “noise” in the bigger picture. Swing trading significantly reduces the time required screen watching. I’ve called it “swing trading” but in actual fact most entry setups I take aren’t technically Swings and they’re simply based on support and resistance on daily and weekly charts. I don’t very often stay in a position for much longer than 5 – 10 days unless there is a compelling reason to.
And that is where I want to focus this blog – as a personal reference point to my own analysis, my own trades and as a personal show case for what does work, and of course, as is always the case with ever changing markets, learning and understanding what doesn’t work.
No information on this website should ever be construed as financial advice of any kind. I’m happy to freely share my trading successes and failures with you, the reader, but I take absolutely no responsibility for any gains or losses that you make by choosing to trade based on information and opinions provided within this blog. All trades and positions detailed by the author within this blog are real positions taken with real money unless stated otherwise.