5th February

Subject : Going back to basics and practice, practice, practice

Hi John

Hope you enjoyed your few days away. This last weekend I decided to spend this week practicing my entries and exits and to try out whether to go long term or short term. To do this I went to my demo account and spent the last few days going in and out of trades. Where as before on my demo account I was so cautious and treated it as real money as I just wanted to bag pips and avoid any losses. This way I didn’t learn much so when I went live I had a rude awakening as I had had two months of solid good ‘safe’ trades that were very carefully chosen and didn’t practice like I am doing now.

It’s been quite a revelation to me and this week I decided I want to perfect what I’ve learned since going live and do it on the demo over and over again until I am successful. The first day out of 30 trades I won 10. I broke even end that day. The second day I won 4 out of 6 trades and ended the day with 8 in profit. Yesterday, Wednesday I won 2 out of 3 and ended my day 20 pips in profit. I spent the weekend back testing and on Monday I felt ready to start practicing. I’m feeling a lot more positive now as I feel I’ve found something that works. It may be simple and I may miss pips before getting into the trade but end of the day the trades I do enter are mostly winners.

What I did was follow the indicators and go with support and resistance and what I learned on your courses. When I stuck to the rules I did well. With my losses I had purposely entered too early and too late and was bitten every time. As soon as I went back to the basics and the rules I was fine and my wins were successful. I set the parabolic to .03 after doing some research on it and I am now getting in on the 2nd parabolic. Sure I miss out on a few pips till the second parabolic appears but by the time it does I can see whether the trade will run or peter out. I’ve found by entering on the 2nd parabolic I am lot more consistent and yesterday had a run of 4 pips (got out at support although it did keep going south) and then a run of 35. I was able to trail my stops. By doing this I found I’ve been in profit almost instantly and it seldom goes more than 5 against me. I comfortably set my stops at 10 and keep a mental log of when I will hit the button to get out. I went over your lessons on the scalping course again and have learned so much. When you are new you learn a lot on the course and once you have a bit of knowledge and then go over the lessons again you pick up so much more. Setting your stops and then mentally trailing works well for me. If the run is good then I trail the stop on VT manually but if it’s a short run I set a stop and then trail it mentally.

I also tried the 15m as well as the 1m chart. I gave myself a 50 pip stop on the 15m and watched the trade. It never went close to 50 but it messed about between 20 and 30 for what seemed forever. I’ve sat at my computer watching the trades all week, getting into the rhythm and while doing that I found I was wasting my time on the 15m chart because the pips that went against me before I went into profit I could have picked up on the 1m or 5m chart. Instead of waiting 45 minutes to make a few pips I could have bagged double my daily quota in half the time while it was messing about between 20 and 30 pips against me on a smaller time frame. This got me thinking and so I put away the 15m and went back to very short term. I still use the longer time frame for the trend. I had previously put away the 1m chart as I’d had such bad runs with it but with my bank being small and to build it up again I have had to return to smaller time frames.

I am fortunate in that I can watch the charts and entering and exiting on the 1m I was able to pick up some good pips going with the trend. When I saw a hesitation I got out as I found that more times than not on the smaller time frame that’s the start of a reverse. Eventually when I have a fat bank I think I’ll prefer the longer time frames but for now and as I have the time to do so, I can watch the 1m and get in when the runs are good. I watch and trade the euro, cable and euro / pound. I’ve done most of my trades on the euro and cable as the runs are bigger. The setting of .03 on the larger time frames works too.

Yesterday Leigh and I watched the trades together and he also felt a lot more confident because he could see this makes sense and so this is what we will be practicing for the next couple of weeks and keeping an analyser to see how we do. As you said one has to find a system that works for you and stick to it. I’m also watching the charts a lot earlier but with this system there is always a trade sometime during the day. I realise I should have found a system a lot sooner but its taken me a lot of time to find my feet. So let’s see where this takes us. I’ll keep you posted

Have a good day - Desiree