A new year. A new dream. A new direction. A renewed hope for the future. Actually a bunch of crap because it is all the same, other than the new year. I have the same dreams, nothing has changed. The difference is 2011 is the year of action. I'm 40 years old and I must get things moving. Paralysis by analysis has been my mode of operation, I must change. I have a dream to have a successful currency trading firm. I have a dream to be a successful business guy, outside of trading. I will move forward with both those goals in 2011.
As alluded to in a previous post, 2011 is the year my success materializes in currency trading. Following I will outline the basics.
Starting Balance: $9500
Yearly Goal: 30% +
Trade Size: 4000
Avg Trade Length: 5 minutes to 2 years
Strategy: long-term trend trading using price action
The strategy can best be defined as a long-term trend trading strategy. The strategy will have the largest draw-down from starting balance in the first 1-2 months, while longer-term trades get initiated. The draw-down could be close to -10% before profit starts to kick-in. The first 1-2 months will be one of the most difficult times for this strategy.
The concept is to enter trades both short and long. Sometimes, I will have a long and short position on at the same time. Stops will range from 5 to 150 pips. Once the trade is 10 - 30 pips in profit the stop loss will be moved to break-even. Once the trade is securely set at breakeven then positions will be added, to 'build' a position. The majority of trades will be stopped out at breakeven. A small minority of trades will be closed after 1-8 weeks to keep the equity curve from having too sharp of drawdowns. A very small minority of trades will be kept for 2 months to 2 years. These longer term trades will be the majority of my profit. I will carry a very large unrealized profit from month to month. At least that is the plan.
Basically the idea is to enter low risk trades, set stop loss to breakeven as soon as possible, add more size to winners, close the losers quickly, close some profitable trades to keep the equity curve going the right direction and hold some very long-term trades for major profit.
Entries will be based on regular old price action using candlestick charts. About the only indicators on my charts will be some moving averages. Used only for a guilde and not specific decisions. Exits will be based on price action exhaustion.
2 comments:
Good luck trading the millipede method. Hopefully we'll both have a successful year!
Colin, thanks for stopping by. I have been reading your blog for years now! This has been a long road. What keeps me going is reading blogs like the millipede method. It makes perfect sense and absolutely amazing what the author has done.
Here's to a successful 2011. I hope we both a have a break out year.
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