I've taken a long break to refine my strategy. The strategy I use is still the same with some fine-tuning, what I've worked on lately is the Money Management. I've been trading the idea on demo for a couple of months, of course have studied the charts for more than a years worth.
It's been playing out well week after week on the demo account. Now I've ready to go back on live, have just replenished the account with $3700. Although might be deemed little and unsafe by some, but that's about as large as I can go as a beginner. That's why I have to be extremely careful and disciplined, and to stick to my plan no matter what. I've learned well from my first try on the live account and I believe I've picked up very valuable lessons which makes me more confident this time around.
Now briefly about my strategy. I'm using a sort of Asian breakout method. I'll check GBP/USD at exactly 4:35 pm (it's GMT+8 here, so it's 8.30 am London time). I do not check it a minute earlier because I've realised I sometimes get burnt when I'm too impatient. Takes willpower not to open the charts because you might know there might be good action after 2 pm but very often there might be spikes or reversals after 4.35 pm.
What's my target? 50 pips. Each week. Nothing more. With cable, 50 pips is very doable. I start checking on Monday, if I achieve my target, I stop trading. Many a times it is achieve on the first try, the trade is open maybe around 5, by 5.30 pm or 6 pm 50 pips is achieved. Then I take the rest of the week off. There were times I tried to go back in during the week, more often than not, I lose what I've just made on Monday.
If I fail the first time, I try again on Tuesday. If there's no breakout of the channel (8 am - 4.30 pm) I do not trade. I'm likely to meet my target either on Monday, Tuesday, or Wednesday.
But of course, everyone needs to be prepared for a bad week. I start with 1% of my account on the first trade. My money management is semi-Martingale, although I'm aware of how a lot of people are against Martingaling. I call it semi-Martingale because I don't double up when I lose, but add the mini-lots just enough to recover the loss and make the 50 pips. Because my stop loss is 25 pips, the general rule is trade 1.5 times bigger than the previous trade.
The way to recover my loss is to either increase my target size, or my lot size. I figure it's easier to achieve 50 pips, than to achieve 75 pips. Therefore I'm more comfortable to use this semi-Martingale method knowing that I need to achieve the same 50 pips, not 75 pips, and then 100 pips and so on if my trades keep going the wrong way.
Oh well, just walk with me on this journey. Along the way I'll post more details on my money management, and how I manage my risk. Here goes.
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