It’s been about 6 weeks of live trading and I can safely say I’m doing badly. Terribly in fact, loads of money lost!
The number of winning/losing trades isn’t too bad, currently I’ve won 155 and lost 118, so 1.3 wins to each losing trade. The problem is each winning trade is worth on average £4.26 whilst the losing trades are £9.93.
I would have needed to double the value of the winning trades or halved that of the losing ones in order to have come out roughly break even.
One of the main causes of this is using a mental stop loss and leaving it to run in the hope of a reversal.
In order to stem the loss I have decided going forward to:
- Use a hard stop loss set to a few points below the nearest low.
- Be very picky with setups. Choose areas where the price doesn’t seem to move too far in the opposite direction as the local trend.
- For the time being, limit trades to instruments where the the expected loss can be kept to a couple of pounds at most. US500 and FTSE are the main ones I’ll be starting with.
The centre part of the image shows the type of price action I’ll be focusing on. So any instruments that can show that behaviour, they’ll probably be just in the quieter periods – that image was from the FTSE at about 18:30.