Tuesday, February 03, 2015

Early 2015 - the recovery continues...

In this post I talked about my trading plan for 2015 and the areas I was going to concentrate on. Well, despite all the volatility and lack of a clear direction in the markets this 'new-old' approach is continuing to show promise, not only for me but for other traders in our mentoring group.

Simply by concentrating on the price action and its trend in the stock or instrument I am looking to trade, the results are starting to show.

Given the lack of direction in the US markets in particular, focusing on the indices too closely would have probably meant very little in the way of trading. As it is, the indices and their movements - interesting though they are - can almost be treated as going in the 'file the news' drawer.

Just as importantly (if not more so), I am 100% comfortable in what I am doing, and have full belief in it, which experienced traders will tell you is a major part in succeeding.

While seeing profits is great, the focus continues to be on the process, rather than the outcome. January gave us a positive start to the new year, and there are a number of positions remaining open which are all in profit. All the while, exposure is being slowly increased where set ups which meet our criteria trigger an entry, in accordance with our risk parameters - no jumping into a whole bunch of trades in one go here!

It would be very easy for a trader to see a few months of non-performance and consider making wholesale changes. but instead this period proved that the risk control remained strong. It also showed the trader (me) that while, yes it has been a frustrating period, it reinforced the need for patience and discipline. Just like the markets, trend following returns can go through trending or non-trending phases. So, if anything, my resolve and patience has hardened over the last few months. And that can only be a good thing.

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