EFFECTIVE DATE: 1stJanuary 2019:
OVERVIEW:
2018 was a crossroads year for me. It was a difficult year to trade for a number of reasons.
- From my perspective given the TRUMP antics FX became more news driven that economic data driven for huge chunks of 2018.
- The liquidity in the market has reduced. This has created volatility without reason. Frankly, I find this just a very simple way for the markets to take away your hard earned $$$.
- I am not a two or four hour scalp or day trader. What was 30-minute chop two years ago is almost the norm for five/six hours a day.
- Four years since starting my subscription services in 2014, with THE PREMIUM SERVICE, and last year, THE WEEKLY FX DRIVE THRU, I am ready for change and a fresh challenge.
I have decided that moving forward, I want to eliminate what can only be classed as “NOISE” from my day to day trading, in fact, I want to eliminate day to trading as much as I can.
I am therefore, moving forward going to focus longer-term trades (POSITION TRADES) that in line with my FUNDAMENTAL / MACRO market views. I am basically a FUNDAMENTAL trader first and use technical chart analysis to confirm my views and thoughts with appropriate high probability trade entry set ups.
This is a big step and frankly it will be challenging. I have set myself tough objectives.
TRADE STYLE 2019:
POSITION TRADES (POS):
Set-ups are intended to have a longer-term trading perspective. If you refer to the document titled 2019 TRADING PROJECTION, my thoughts and goals are laid out based from historical data.
These trades are initiated via LIMIT ORDERS with a STOP LOSS and LIMIT (TARGET) level advised.
A key feature of these set-ups is that they have much wider than normal stops to allow for market swings and volatility, aka “noise”. The trades therefore have a smaller position size to allow for the swings in volatility, but multiple trades in the same currency pair are added when the core trade has gained traction in the desired direction.
This last point above is VERY IMPORTANT TO NOTE. My stops could be as much as Monthly Average True Ranges (ATR's). The contingent Liability RISK associated with these trades may be too high if you operate a small balanced broker account. Drawdowns could be at Monthly ATR maximums: -
TYPICAL EXAMPLES:
EUR/USD = 450 pips
GBP/USD = 600 pips
AUD/USD = 325 pips
EUR/AUD = 590 pips
GBP/AUD = 900 pips
GBP/NZD = 1,250 pips
EUR/JPY = 520 pips
GBP/JPY = 875 pips
I may from time to time use HEDGING when trading longer-term.
TRADE STYLE GOAL: is to have multiple trades open/live at any one time and maybe 2/3 open/live trades with the same currency pair. I will of course suggest taking some profits as the trade matures, but hopefully at the same time letting trades run as far as possible.
TARGET AUDIENCE: POSITION TRADES, these trades were initially launched for those traders who like to hold positions for weeks, even months, and for traders who do NOT want to sit in front of their screens 24 x 7. These trades suit the PART-TIME trader who can only check their trades on twitter alerts two or three times a day or are only able to look at their computer screens only a few times a day.
Scott Pickering
The Pip Accumulator
December 15th 2018.