A New System with an Ultimate Goal... Finally
A few hours before the opening of the Japan market, I've decided to give this blog a second post. After a whole night of reading particularly in technical analysis, money management and risk management. After realising what is needed in trading range in trend market which I've set suitable for myself with proper management, I've developed a system for myself. If this system fails to work as it planned to be for the first month, it's back to the basics of planning and drawing board. However I will still be reading the charts, observing the market while making mental trades, which will be continued to post here, profit or loss.
I've set my goal to make 1 million dollars in 4 years time. Due to my heavy losses in the past weeks, I've decided to go along with the account but with a new system. My current account balance is left $ 99.22, with my initial trading account balance of $ 978.22. Currently I'm at a lost of $ -879.00...
I've set up 3 terms of goals. Here's how it's going to work. With my current balance, I will set a target of increasing my balance by 33.7% per month or 8.43% per week. I will continue this consecutively for 4 month. By the end of the 4th month I should have a rough estimation of $ 477.97. This is my short-term goal.
From the 5th month onwards, I'll decrease the monthly goal profit to 25% per month or 6% per week. On the 8th month, it would be enough to recoup with my loss in of $ 879.00. However I will continue this process until the 16th month that I will eventually withdraw my initial trading balance with a slight profit of $ 1000.00 .
No withdrawals will be made until I make up till the 20 grand mark. After that I will continuously withdraw 1 grand per month until I reach the half a million mark,which I will withdraw out whatever's left on the last 5 digit of the account, as long as it still has 500 grand. This is my mid-term goal.
I will again reduce the profit rate to 10% per month or 2.5% per week. I will stop withdrawing funds from my account until 1 reach my primary goal and also known as my long-term goal: the 1 million dollar mark which again I will reduce my monthly profit to 5% or 1.25% per week.
From then, I shall set up a new set of goals which will roughly set 4 years from now. The time and date specified here is a rough estimation and it might take longer or shorter time to achieve (preferably shorter).
As for my system, I will make use of my 'toolbox' which I will use for what's work for the current market environment. How would I know the market environment? The first thing that I would need to do and crucially important is to know whether the market is trading in a trend or a range. For this I will use ADX, Bollinger bands, risk reversal graphs, RSI, MACD and definately without miss is the Fibonacci Retracement and Extensions. I will then judge the market without emotional detachment. This is the toughest rule to follow and needs tons of discipline, not to be influenced by fear or greed.
Join the market! When you can't beat them, join them! That's what everyone says isn't it?
At present, I would go in a trade during a price retracement during the up-trend or the down-trend. If I missed the retracement for any reasons, then if it's an up-trend, I will put a position order slightly a few pips(not more than 10 pips) above the yesterday's high(daily chart) and if it's a down-trend seen or expected, then I would do exactly the opposite of the up-trend, which is put an order a few pips slightly lower than the previous day low. I would currently use stop-loss order to manage the risks. I would use the two-day low method which is volatility-based stops. The stop will be placed 10 pips below the two-day low if I'm going for long and 10 pips above the two-day high if I'm going for short. I might actually try hedging if I get to learn more about it and understands it better. I will set my risk-reward to a 1:2 ratio to 1:3. I will trade only in a quantity of 10k volume until at least with my account balance of 5 grand. My portfolio risk management and maximum drawdown would be ideally 2% - 5% per trade and strictly not more than that. If it takes me to earn $ 1 per pip at 5 grand level, I would definately do that instead of risking a higher drawdown I might be facing. A trading system is not a 'holy-grail'. It's said that if your trading system works 80% of the time. There's still the 20% that might leave a big hole in your pocket, draining away every hard earn penny with lots of stress.
As this is just roughly my new trading systems, I hope this would work for me and will help me to reach my financial freedom. If you happen to read this blog as an interest, feel free to leave your comments in my blog.
It's the time to look at the charts again...
I've set my goal to make 1 million dollars in 4 years time. Due to my heavy losses in the past weeks, I've decided to go along with the account but with a new system. My current account balance is left $ 99.22, with my initial trading account balance of $ 978.22. Currently I'm at a lost of $ -879.00...
I've set up 3 terms of goals. Here's how it's going to work. With my current balance, I will set a target of increasing my balance by 33.7% per month or 8.43% per week. I will continue this consecutively for 4 month. By the end of the 4th month I should have a rough estimation of $ 477.97. This is my short-term goal.
From the 5th month onwards, I'll decrease the monthly goal profit to 25% per month or 6% per week. On the 8th month, it would be enough to recoup with my loss in of $ 879.00. However I will continue this process until the 16th month that I will eventually withdraw my initial trading balance with a slight profit of $ 1000.00 .
No withdrawals will be made until I make up till the 20 grand mark. After that I will continuously withdraw 1 grand per month until I reach the half a million mark,which I will withdraw out whatever's left on the last 5 digit of the account, as long as it still has 500 grand. This is my mid-term goal.
I will again reduce the profit rate to 10% per month or 2.5% per week. I will stop withdrawing funds from my account until 1 reach my primary goal and also known as my long-term goal: the 1 million dollar mark which again I will reduce my monthly profit to 5% or 1.25% per week.
From then, I shall set up a new set of goals which will roughly set 4 years from now. The time and date specified here is a rough estimation and it might take longer or shorter time to achieve (preferably shorter).
As for my system, I will make use of my 'toolbox' which I will use for what's work for the current market environment. How would I know the market environment? The first thing that I would need to do and crucially important is to know whether the market is trading in a trend or a range. For this I will use ADX, Bollinger bands, risk reversal graphs, RSI, MACD and definately without miss is the Fibonacci Retracement and Extensions. I will then judge the market without emotional detachment. This is the toughest rule to follow and needs tons of discipline, not to be influenced by fear or greed.
Join the market! When you can't beat them, join them! That's what everyone says isn't it?
At present, I would go in a trade during a price retracement during the up-trend or the down-trend. If I missed the retracement for any reasons, then if it's an up-trend, I will put a position order slightly a few pips(not more than 10 pips) above the yesterday's high(daily chart) and if it's a down-trend seen or expected, then I would do exactly the opposite of the up-trend, which is put an order a few pips slightly lower than the previous day low. I would currently use stop-loss order to manage the risks. I would use the two-day low method which is volatility-based stops. The stop will be placed 10 pips below the two-day low if I'm going for long and 10 pips above the two-day high if I'm going for short. I might actually try hedging if I get to learn more about it and understands it better. I will set my risk-reward to a 1:2 ratio to 1:3. I will trade only in a quantity of 10k volume until at least with my account balance of 5 grand. My portfolio risk management and maximum drawdown would be ideally 2% - 5% per trade and strictly not more than that. If it takes me to earn $ 1 per pip at 5 grand level, I would definately do that instead of risking a higher drawdown I might be facing. A trading system is not a 'holy-grail'. It's said that if your trading system works 80% of the time. There's still the 20% that might leave a big hole in your pocket, draining away every hard earn penny with lots of stress.
As this is just roughly my new trading systems, I hope this would work for me and will help me to reach my financial freedom. If you happen to read this blog as an interest, feel free to leave your comments in my blog.
It's the time to look at the charts again...
posted by 4xTrader at
11:30 AM
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