Nov 2018 Update
It has been 3 month since my trading journey began. I am slowly getting used to the routine of scanning for trades, monitoring existing trades and reading news daily. However there is still much more I need to learn and discover as I move along.Managing Stop Loss
Over the months, the percentage of winning trades have been increasing (even though losses still more than win). In Nov, I was at an unrealized profit of 12R at one point in time. However the market turned over the last 2 weeks and my profits was quickly replaced with losses instead. Perhaps I should quickly shift up my stop loss to 0R to protect myself when the price has moved enough.Small R:R
I realize that a risk:return (R:R) of 2 is a bit too large and hard to hit. Many a times the price action swings in my favour and retracts before my 2R is reached, often making me think that if I had my profit target closer, I could gotten out before it retracts and the time could be used to invest in another trade. Therefore I am trying to lower my R:R to perhaps 1.5. Lets use December to test this out and see how it goes.Usefulness of Indicators
Fundamentals are not really helping for short term trades. Ideally you short on company with bad fundamentals, and long for those with good ones. However, I find that breaking this rule does not impact my results much (for short term trades).
The indicators I primarily rely on are the parabolic SAR, force index and the MACD. However, these are often too laggy. I am starting to find them unreliable and sometimes paid less attention to them. On the other hand, I am looking into the stochastic and bollinger bands. I am seeing certain patterns regarding the bands itself and the price candles. More observations will be required to lay a conclusion though.
Lesson to Self:
- "If you cut loss fast, you need to take profit fast, otherwise you will never make money"
Currently Reading:
The Intelligent Investor by Benjamin Graham; Jason Zweig - Chapter 9
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