Tuesday, October 5, 2010

Long Term Trend Trading vs Short Term Swing Trading

Quote from the Universal Principles of successful Trading, Brent Penfold:
Short-term swing trading is emotionally easier to trade compared to a longer-term system.  This is because frequent winners provide frequent positive feedback that what you're doing is right.

I am not a long term trend trader, I am learning to trade in a longer time frame (2-3 days).  Honestly, I have been stopped out 7 times out of 10 times, the emotional hurdles is tough, 'consistent' losing also means I am constantly receiving negative feedback.

Taking off from my longer time frame trading today, Ayumi take a break today, I am trading in smaller time frame, which is from the 30 minutes chart.

Thanks to the news release (JPY Rates, AUD Rates, GBP PMI Data), PowerWave trading concept, and good support resistance levels, I have collected some positive feedback and harvested some pips today.  And thanks to the previous 2 weeks challenge (losing streak).  Without these challenges I did not know that I am still strong, and I am stronger.

I can still see myself in my trades, I know what I am doing, and what is my setup.  I did not compromise my stop loss.

Thanks to Mr. Market for taking care of me.

Today's harvest:
+70 pips.

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6 comments:

  1. Agree. The best way I know for recovering from big losses is consequtive winning. I don't care if it need 2 weeks for recovering the loss. Consequtive winning is only remedy to gain my confidence back.

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  2. De'Trader
    Best of luck to us! hehehe
    -Ayumi-

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  3. Hi Ayumi

    it is good that you realised that you must defined the time frame you are trading.

    One point to note. Longer term trading does not mean that you move to a larger time frame. Trading on the 30 min chart for a 3 - 4 days trade is reasonable.

    Go back to what you learn about waves. Trade only at the labelled points. You need to know which wave you want to trade. maybe C1, L1 or even L2.

    Once you have decided than scan the charts for these waves only.

    Catching these waves are the long term trades which will last for a few days.

    hope it makes sense.
    easier said than done. i am still struggling.

    I am considering switching to options instead. Less stressful....

    kumofx

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  4. Hi kumofx

    Honestly my thoughts are in a mess, your advise definitely enlightened me and free me from the false beliefs.

    you are right, i must define the time frame I am trading, and sharpen my entry using 30 minutes chart, trade only the labelled waves and all back to basics.

    i do not know anything about options, how is it to be less stressful?

    -Ayumi-

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  5. hi kumofx

    Honestly my mind is in a mess now, what you have shared has definitely enlightened me, free me from the false beliefs and many mistakes.

    You are right that i must define the time frame I am trading, i can use 30 minutes chart to sharpen my entry and stop loss.

    I am still learning, thank you for sharing the knowledge with me, your invaluable advise, and I believed many traders must have gone through this process. :)

    I do not know about Option trading, how does it work and why less stressful?

    -Ayumi-

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  6. Read this book: It will help you get started.

    The Complete Guide to Option Selling by James Cordier and Michael Gross

    Less stress. for one we are buying and selling quite a distance for current market price. any short term price change will not seriously affect our trade.
    Less chance of getting stop out and then see the price going in our original direction.

    kumofx

    ReplyDelete