Strategy: Harmonic Pattern Trading

Target profit: 75pips per week
Indicators: Channel Movement, Harmonic Patterns, RSI
Important chart pattern: double-top/bottom and Head & Shoulder, divergence and convergence
Important candlestick: Doji, bullish/bearish engulfing

My Trading Mantra

1. Objectively identify my edges - I have a system here that works.
2. Pre-define the risk of every trade.
3. Completely accept the risk. Consider the money GONE.
4. ACT on my edges without reservation or hesitation. Follow the rules and take every trade that meets the conditions.
5. Pay myself as the market makes money available. Take the profits and be happy. Even if compounding my account, pay myself something out of my profits each month.
6. Continually monitor my susceptibility for making errors.
7. Understand the absolute necessity of these principles, and therefore I never violate them.

Thursday, July 2, 2009

1July 09 Good Trade yet exited too early

Entered the trade at night when the setup was perfect. But I was OTM for quite a while and I started to question if my decision to enter was right. It was only then when about midnight that market started moving. Price went down real fast and hit close to my 10pips profit target. Unfortunately, it retrace at fast rate too. Fearing that it might reverse, I exited. There is small profit made but if I followed my rules, I would have had bigger profit.
Morale of the story: If you are prepared to set aside an amount to loss, take a plunge for bigger profit!

Your trade results will show if you are doing what is correct or you are doing what you like
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