Sunday, July 6, 2008

Retrospective and readjustments

I used Sunday afternoon productively. I researched my April and May trades through my blog posts trade by trade. Basically a lot's of my scalps go in the profit immediately, going against me less than 5 pips usually. On those scalps my holding times are 1-3 minutes sometimes up to let's say 6 minutes. It's a scalp so if I see that something is happening my idea should be proved right immediately, if not it's not right idea. I had some trades that lasted 30 to 60 minutes, there were no need for close attention for them. Simple s/l and t/p would be enough. I just use my attention and drain it for no reason.

The majority of bad trades in which many of them I used averaging would get to b/e with stop of -20 without taking out the stop. The ones that gone beyond -20 were disasters with risky averaging and in best case b/e result with heavy averaging. So there is no need for me to hold any trade beyond -20. I do use small t/p so it's not idea to let every trade to go to -20 but to have it as last line of defense. I really want to take averaging out of my repertoire. Only valid case would be in -15 trade where I have good idea for average there, let original trade to -20 and add on to -5. It's big IF for that kind of averaging also. I'm not saying that I will not average from now on because I know myself. This are guidelines and I would be very happy if I could trade by them.

Also I will stop using "half size - full size" terminology. I don't trade in full size except when I average so it's not using me well. From now on size is size. I can add new trade if I want. I will gradually up my position size because of intention to allocate more capital for my trading. That is process in the development so I don't have much to say about it. Real return can easily be seen on the monthly result post in percentage terms until new size and allocation would be fully implemented.
My basic profit target is 50 pips per week and I would like to size position so those 50 pips represent 2.5 - 3 % return. It's little to big position sizing for me right now. The thing is with my half size positions I was making 50, 100 up to 170 half size pips per week in my ten profitable weeks period. Size was small so it was easier to have big weekly return. I don't know which proportion is optimal for me yet.

Scalping suits me and no matter what other opportunities be out there I can always find nice scalps and make my profit only with them. My "swing mood" as I call it brings more problems than averaging. I don't take nice scalp profits in that mood, I ride losers and worst let winners turn to losers and than average more in a losing side. Swings can develop from successful scalps and trailing stop. If I don't want to trail the stop, fine just take the profit.

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