This has been a good week. Not for making money, but for learning things about the markets and making indicators (which may or may not turn out to be useful!). I am feeling very positive and enjoying myself, and I have recovered some of my early playful approach to trading — which was probably the reason why I did better in January and February than I did in March or April (in terms of how high my equity got before falling back!).

Today seems to be very quiet. Platinum is sitting right on its 200-day moving average and has not had much of a rally, which suggests to me that there is further selling to come. AUD/USD has pulled back on volume but not much thrust. Treasuries have also pulled back, with more thrust, although an early rally today means they are still up. I expect a bit of a pullback as the 10-year yield tests 3.2%, but given the continuing negative backdrop I am staying with the trade. I wonder whether I should have taken profits when I had the chance, but it is too late now and I have a lot of leeway before my entry point is hit.

Turning to things where I don’t have a position, the S&P has rallied fairly strongly today (as the odds suggested), but is still well below the 200-day moving average that it broke yesterday. I can’t see the volume of the index intra-day, but the SPDR ETF opened on very high volume and the thrust is very positive. The macro picture seems to be driving everything at the moment (except soft commodities) and today risk is on, which means my trades are off.

I have been thinking some more about profit targets. Given my trading style, a 2 risk unit profit target is probably too close — a few good trades are likely to make my profit for the year, if I make any at all, and I can’t afford to cut them short.

I am wondering whether I should place much wider stops and employ a higher risk-per-trade. At present I have a constant drumbeat of losers which I hope will be compensated for by a few highly-leveraged winners, but perhaps it would make more sense to increase the max loss per trade and decrease the potential upside for a given move in order to raise the odds of a successful trade. My experiments with TradeStation suggest that it would be, but unfortunately systems are not very good at identifying major technical levels (the ones I have made so far only trade new highs or lows, some of which I just wouldn’t trade).

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