I have been worrying recently that trading has still not crystallised in my mind. It took a good three years for a general overview of the markets to crystallise when I was in my last job, but I need it to happen rather faster than that if I am to make money trading.
The key questions in trading are: when to get in, and when to get out.
- Getting in I am getting sorted — when an expectation is confirmed by a breakout in the right direction, it is a good time to trade. But I am still too inclined to trade a breakout in a direction opposite to the one I was expecting — as with the S&P 500 in my latest trade. Also, this only deals with pro-trend entries. The quest for countertrend entry signals is something I have been working on recently — I have been experimenting in Tradestation, looking for indicators that show a change in supply and demand conditions such that a reversal can be expected to occur.
- Getting out is, in a way, not too difficult at present. Either my stop is hit, or my profit target is hit. I have also had two successful exits where I got out of a trade before it made much of a loss. In one case I used my supply and demand indicators to do this, and in the other the movements of other related markets. When using profit targets has become second nature I may introduce some variability to allow for more upside.
- What has been happening?
- Is it going to carry on?