Less trades, less mistakes, less stops. 2015 was the year when I realized that you can’t daytrade more than 5 or 6 pairs and expect to keep your focus. Making three well chosen trades for 20 pips is a lot better than doing 10 trades a day and ending -20 on your P/L.
Most importantly 2015 was the year of less greed. It doesn’t matter how much money the trade would have made getting out early was always a much better choice because it saved me from countless disasters throughout the year and kept my win rate for the past three months at 97%.When in doubt -- get the f- out and reassess after. To paraphrase the Rothschilds -- How did you get so rich? By leaving lots of money on the table.
2. The only stop that matters.
Volatility stops? Equity stops? Who are we kidding? In the heat of the battle you are always going to modify your trades or just dive in unprotected as you either chase the move or fight the market. There is only one stop that works because its absolute. The money stop. You need to find a number that you are willing to lose on every trade and size accordingly. For simplicity’s sake make it $100.
So anytime you do a trade make sure that whatever stop you have on is 100 dollars or less. That is literally the only thing you should care about in 2016. Because here is something I will promise you -- almost guarantee you -- If every trade has a $100 stop you will not lose $5000 next year. On the other hand, no money stop and you are almost certain to do so on whatever fight-the-market-because-this-move-is-bullishit trade that comes along.
We are not trading currencies, pips, dips, rallies or anything else. We are trading money. So make it a money stop. Always.
3. The most powerful trading tool is your pen.
Pilots do it.
Surgeons do it.
Wedding planners do it.
Every professional no matter how skilled, how experienced, how good they are at their job does this one thing.
It doesn’t matter if you’ve done the thing a thousand times, if you don’t use a checklist you will lose money unnecessarily this year. Here is my checklist of events that I will be using every day to make sure I don’t lay out stupid orders in front of oncoming volatility locomotive.
Check the Calendar for:
Central Bank Events -- meetings, speeches, Q&As
Beware of London FIX, End of Month flows, NY cut for option expiry
Cross Market Relationship oil to CAD Equity to EUR yields to JPY -- watch for big moves to spill over into FX
Non economic news -- terror, natural disaster, political upheaval.
Don’t roll a North American trade into Asia event risk
Technicals only work when there is no new news
4. Trust your set up
Once all the stat work is done. Once all the trading tweaks have been adjusted. Once you have seen the strategy do its thing in real market conditions, you need to trust it. Let the trade come to you and take it.
Want to start 2016 right? See my Free 5 Best Trades Below
Boris 5 Favorite Trades For 2016.
The Lone Ranger is long dead. The future of capitalism is collaboration. No matter how good you are, your teammates will always make you better. Premier League may be the best in the world but Germany is the one that wins the World Cup. The future of trading is team. So trade in a room with like minded people who will help you get better every single day.