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My Trading Methodology - (FWIW !)

Discussion in 'Forex Trading Systems and Strategies' started by ChrisEccles, May 9, 2009.

  1. ChrisEccles

    ChrisEccles Private, 1st Class

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    My trading week begins on Saturday morning, when I download and
    print the Data Release Calendars for the coming week from both Fx360
    (GFTForex are my brokers) and FXCM.
    -
    I then run my account statement, verifying that it matches up with my
    longhand trading log for the previous week, and do my margin calcs for
    the next week's trade. At this point, I fire off any emails to my account
    executive relating to conversion queries, etc.
    -
    Next, I look at the scheduled news releases and decide in advance which
    pairs I'm going to trade on which days. I map good and bad potential
    release data to long or short positions on pairs. For example, if there are
    a number of European industrial production indices coming out on one day,
    and no US data or UK data, I will aim maybe to straddle the EUR/USD or
    the EUR/GBP. etc.
    -
    My target pips per day's trading is set at 20. If trades are in place and
    are making more than this, I adjust the B/E to settle my target and let
    them run for a bonus. 20 pips may seem a very modest target for intraday
    trading but it pays to let the lots do the work, rather than the pips, for
    me anyway.
    -
    My risk is 2.5% of available equity (initial) on any trade. I nearly always
    enter at market with a conditional OCO for stoploss and target, although
    these are modified later during a trade. I trade on 10-min charts for all
    pairs, initially, although I can do a quick flip to 1-min charts in order to
    buy/sell at dips/peaks when adding to successful trades.
    -
    My work screens are set up (DealBook360) to allow a flip between the
    following:

    1. Trade screen, showing 1-hour and 10-min charts, and open positions
    and working orders, plus the quoteboard for all my usual pairs, plus a
    quick €/pip x Lots calculator for any pair.

    2. 4-hour charts for all usual pairs.

    3. Daily charts for all usual pairs.

    4. Weekly charts for all usual pairs.

    5. Newswire display, plus 10-min chart for traded pair and open positions
    and working orders.

    6. 1-min chart for traded pair plus 1-min chart for any relevant cross
    of either the main or counter currency.

    -
    My first stoploss point on most trades is a trailing one, beginning at the
    price computed to tell me the trade is wrong. I use the 14-period ATR
    for the 1-hour chart to give me the "breathing room" for this first
    stoploss point. Trading off a 10-min chart, this is normally adequate.
    If the trade moves against me, I normally allow it to hit the stop but
    sometimes (eg: where there are some indicators/candles showing an
    obvious reversal) I will close at market to exit and minimise loss.
    -
    If the trade runs in my favour, I rigorously employ the two thirds rule
    when adding to a position. Viz: I wait until the price is thrice my stoploss
    away from entry, then double my lots, allowing the stop to continue its
    trail.
    -
    I never employ the strategy of partial exit for profit, as I find this
    cumbersome, preferring the two-thirds rule to achieve more or less the
    same result but with superior risk management.
    -
    I keep a trading log on paper (photocopied sheets with columns for pair,
    entry, stop, target, adjustments and results) using one sheet per day.
    I always try to note down what went wrong or right with a trade.
    -
    I am adding 3.8% to my equity per week, minimum, using this method
    and anything over and above this becomes what I call my "haven" fund,
    able to be dug into to finance the occasional larger position (sticking to my
    trading rules, as above) which often yields good returns on "big" news
    days.

    -
    Chris
     
    #1 ChrisEccles, May 9, 2009
    Last edited: May 9, 2009
  2. ernest8fingers

    ernest8fingers Master Sergeant

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    WOW

    I can barley tie my own shoes without a plan. All that work Chris? You must have a lot of energy(or no kids) to stick to that routine? Sounds like a very good methodical trading plan. I hope you rake it in! I just let my EA do all that stuff. I started off with your same zeal-about 5 years ago-only to realize I hate staring blankly into my monitor for hours . My EA does it now and all I have to do is check internet connection.Good luck and happy trading!:)
     
  3. ambdemmy

    ambdemmy Recruit

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    Good trading strategy

    Hi chris i am really impressed with your trading strategy.For someone like me that is new to forex i will like to learn some good trading strategies from you if you don't mind.
    Regards,
    ambdemmy
     
  4. ChrisEccles

    ChrisEccles Private, 1st Class

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    I have three kids and, yes, a lot of energy !
    I just LOVE trading, I guess.

    Thanks !
    :)
    I'm looking forward to drawing off some around July but priority for
    just now is to grow the balance !

    Zeal shouldn't wane if you love what you do, but I see your point.
    However, I rarely spend more than three hours (net) actually at the
    screen. I cherry-pick my trades in advance and this DOES help to
    avoid the chart-watching quite a lot !

    Also, I would never trust a piece of software to make decisions ! ! !
    :rolleyes:

    -
    Chris
     
  5. ChrisEccles

    ChrisEccles Private, 1st Class

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    I wouldn't consider myself an expert by any means, ambdemmy !

    But here's my (verbatim) sheet for next week, if it helps:

    Week 10/05/09 - 15/05/09

    Mon 11/05
    Look for trend in AUD/JPY and/or USD/AUD based on business conf release 02.30BST
    Watch EUR/USD and EUR/GBP for move AFTER French and Italian releases 07.45BST
    09.00BST

    Tue 12/05
    Watch EUR/GBP and/or EUR/USD for move AFTER German releases 07.00BST
    Watch GBP/USD AFTER UK releases 09.30BST
    Look for trend in AUD/JPY AFTER Commonwealth Budget release 10.30BST

    Wed 13/05
    Watch EUR/GBP AFTER French releases 07.45BST
    Look for strong trend in GBP/USD AFTER UK releases 09.30BST
    Watch EUR/GBP AFTER Eurozone Ind Prod releases 10.00BST
    and UK BoE Inflation report 10.30BST
    Look for trend in USD/JPY AFTER US Adv Retail Sales 13.30BST

    Thu 14/05
    Watch USD/CHF for trends AFTER Swiss results 08.15BST
    Set straddle trade on EUR/USD for ECB monthly report (wide stops) 09.00BST

    Fri 15/05
    Watch EUR/GBP and EUR/USD during result releases 07.00BST
    to 10.00BST
    After 13.30 watch extended trends in EUR/USD on US results
     
  6. ChrisEccles

    ChrisEccles Private, 1st Class

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    Trading Log Sheet

    If anyone wants to use my log sheet pattern, here is the download:

    [​IMG]


    -
    Chris
     

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