So what is my trading about? Currently, my business hours are only 2 or 3 hours a day. My session usually starts in the morning at 9am and ends before lunchtime. Pretty fine workday, isn’t it? The main objectives of my trading business are following:
- Keep it as simple as possible.
- Use several strategies at the same time to diversify the portfolio.
- Do not risk too much.
Keeping things as simple as possible is very effective method to survive as long as possible on the markets. That’s why I prefer pure Price Action instead of overcomplicated trading systems. Using several simple strategies at the same time is useful for diversification of my portfolio.
My personal trading portfolio consists of many different strategies, but all of them have some attributes in common. For example, the main element is “pureness” of every strategy.
As I said before, I am trying to keep things as simple as possible. And I follow the same opinion in trading. Said in other words, I don’t want to overoptimize the strategies. Because if I optimize a strategy too much, it wouldn’t survive a bad market period.
What do I mean with that?
If I build a strategy on basic rules of technical analysis, like supports, resists, trend lines or simple price patterns, I can use this strategy successfully on wide scale of markets and in different market phases.
For example, if I build strategy, which earn money only on bullish market phase, and I optimize it for only bullish market, how could the strategy survive even a small market crash? Or another example: Let’s say I have a strategy built for side trend. So when the market is steady, I am making a fortune.
But look at the US stock charts, they are still growing. I wouldn’t survive this uptrend with this strategy. This is why I don’t want to trade only one strategy build for one specific market sentiment.
Another element of all strategies is risk profile. This is very important part of every trading strategy. It’s very complex topic, but in general, higher risk does not mean higher profits. It’s necessary to keep risk as low as possible.
And how to keep low risk?
By using diversification.
To diversify portfolio is in my opinion important in trading. Practically, you can diversify into many fields in trading. I personally use in time diversification, it means, that I use many timeframes, from minute bars, to daily bars.
In other words, I am combining all styles of trading, from intraday (daytrading), through swing trading to position trading. This is good to avoid bad market sentiment, which could last even a few months.
I also diversify my strategy portfolio. Combining many strategies with many different markets causes more stable results of the portfolio.
For example, when all the Euro markets falls, and I have long positions on EUR pairs, the other strategies, focused on USD, will earn enough to compensate my account balance.
Mainly, I am using strategies, which are built on strong momentum, that comes after the break of strong support or resistance, or strategies built on capital accumulation.
The advantage of the diversification is, that I can make money on many market sentiments. Thus I will survive high volatility period or the low volatility period. I’m going to reveal more articles about my strategies later.
The results I have, thanks to the steps written above, are good enough to be alive only from forex trading income. I am enclosing the equity curve, which I was describing in my introducing post. You can see there both short and long term trades.
Which stuff do I need for my trading?
Many beginning traders thinks, that laptop and internet connection is enough for successful trading on the beach. It’s true, that it is possible, but only by the advanced traders, who knows, what they are doing. I recommend to create your own tradestation at home or in the office, made only for your trading.
I personally use 2 or 3 screens to watch charts. Single monitor is not enough, it cannot provide complex overview over the markets. For example, combination of two monitors will be enough to get started. Even in daytrading I watch higher timeframes to get better overview over the markets.
It is also possible to use laptop with additional screen. I am using this Full HD portable monitor with a flip case. That is useful especially when travelling a lot.
How you can start trading, make money online and which steps you should make to begin succesfully? All these topics and much more will be explained in the following posts.