One of the most important aspects of successful trading is to first identify what type of trader you are. This will obviously require some experimentation. Identifying where you experience the highest level of accuracy is one of the key deciding points. Some traders are terrible at identifying short-term moves, and so avoid scalping.
Personally, I am somewhat of a breakout trader, with an inclination toward swing trading. The strategies I have personally developed over the years tend to be more long-term in nature and so are better suited to swing trading. However, these trades can sometimes last longer than a few weeks. This is due to the built-in risk management of these particular strategies.
Recently, I decided to rework a particular strategy in order to increase my profitability and time horizon. This ultimately means that I simultaneously have to increase my risk tolerance. This requires a very strict set of trading rules. I have given a lot of thought and time to this new trading strategy and am finally ready to test its efficiency.
Test & Polish
I am busy testing it out at the moment, but weekends are really not the best for trading. Anyway, I am giving it a shot. Essentially, this is quite a high-risk strategy that is structured using 10X leverage and some very strict and specific risk management practices. Depending on how my trials perform, I may reduce it to 5X leverage.
I want to be able to maximize the volatility of the market, rather than on the medium-term moves. My initial strategies were chosen due to their safety and forgiving nature. This particular strategy is a lot more strict and requires swift and disciplined decisions. Specific stops are initially set and not adjusted under any circumstances.
The stakes are high. Remaining within the rules preserves capital, ultimately reducing the risk. Not abiding by these disciplines will unfortunately see capital being depleted in the event of a contrary move. I am quite excited to see how this little experiment turns out. I have been perusing a number of charts as well, and have identified a number of possible trades.
Alerts have been set, and now I am simply waiting for more trading opportunities in order to give this strategy a solid test run. I would like to initiate at least 10 trades and then monitor and assess the overall performance. A lot of traders fall victim to overtrading. You can’t just trade because you want to trade, you have to wait for setups.
Anyway, hopefully, I can put this new strategy to a solid test soon. See you in the next one!