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Announcements

This site is currently inactive as I have decided to move away from exclusively trading Forex in 2010 and as such will not be taking on new coaching clients in this area.

 



I have resumed my focus on coaching as a stock market mentor where I run a success guaranteed stock trading mentorship program

 



Additionally, you can now get access to what I consider to be the best stock options daily trade alert service.

 



Of course, I am biased and with a success rate fluctuating between 68.2% and 72.4% it is hard not to be biased.

 



If you do want to follow along with what I am doing every day you can get access to my daily stock market report 

 

 

You can read the step-by-step Bollinger Band Trading Strategy Guide - this is my main active trading strategy



Until next time


happy trading 


Mr Phil Newton or on LinkedIn Phil Newton trader

A Conistency Driven Trading Strategy

Pipsamundo's picture

Hello all I'm Dave and Phil has asked me to tell you about the trading system I use to trade with.

I intend to do this over a series of postings containing screen shots and an excel spreadsheet to explain the analysis and money management elements of the system respectively.   Until recently I was member of the LTR before deciding I was now equipped to “go it alone,” and am very grateful for the benefits I have gained from Phil and the LTR.  Phil has, in essence, provided me with the final building block of my trading system, which is practical experience of the “mental element” of trading that is nigh on impossible to get anywhere else unless, that is, you’re wealthy enough to afford a personal trading coach. 

I first scratched the surface of trading about 10 years ago when I jumped on the dotcom bandwagon and made some money and then lost it even quicker when the bubble burst.  This scared me off the markets for a while and then about 4.5 years ago I decided I wanted a change of career and so revisited the markets to see if I could learn how to trade properly.  Having an engineering based degree and Ph.D. I assumed it would be easy for me, thinking it should be quite straightforward to build a mathematical model that would generate me a large income.  Fast forward 4 years and after reading numerous books, building and back-testing systems, and trading part-time I concluded: 

  1. My engineering background was a hindrance since I was not accustomed nor mentally equipped to deal with the concept that a trading system need only work 60% of the time to be good.  In my previous life of telecommunications there’s a concept of five 9s reliability, meaning the system is expected to work 99.999% of the time, which of course is unheard of in trading.
  2. The hardest part of trading is being consistent, which is a mental not a technical problem, and for me is the key to unlock the mental blockage in point 1 above, i.e. accepting that a good trading system has both winning and losing trades.

 Then about 6 months or go I became ill, with a mild form of IBD, and used the recuperation time to reflect and assess my situation, and decided I was going to devote the next 6 months to trying to make it as a trader.  To cut to the chase I put together a trading strategy that addresses holistically the elements needed, in my opinion, to be a successful trader, which are: 

  1. A technical analysis element.
  2. A money management element.
  3. A mental element.

One of the key things I wanted to achieve when I put this together was that it should drive me to become ultimately consistent, which simply means I continually repeat the follow steps:

  1. When a trade setup occurs I take it without hesitation.
  2. I follow my money management rules no matter what.
  3. I accept the outcome win or lose and then move on to the next trade.

In the next post I’ll describe the technical analysis element of the system, following that I’ll post a money management spreadsheet to complement the analysis element, and finally I’ll discuss some of my “mental” experiences.  Hopefully you will find something positive or at least interesting to take away from my posts and if you’ve any thoughts or suggestions then I’d be delighted to hear them. 

To spark your interest I’ve called the money management element the “100 day to 100K” system, which shows how a £5K account can be grown to £100K over 100 trading days by trading only mini-lots and never risking more than 1% per trade.  Obviously this sounds far-fetched and/or ludicrous but because the key to this money management strategy is being able to consistently make 100 pips per day it is that what makes it difficult to achieve.  Of course it is flexible in that if you can only make 50 pips per day then it will simply take twice as long – the point being it is designed to both develop and reward consistency.  Also, I do realize that there are tons of money management strategies around, however I never found one that was designed with consistency in mind and “told” you what lot sizes to trade on a day by day basis, which in my opinion is the strength of my money management spreadsheet. 

Hopefully you’ll find my postings interesting and until the next time I wish you consistent trading.

Cheers - Dave Search.