Before starting the next challenge I wanted to see if there were any parts of my trading process that I could automate or improve. The process is already quite simple, however the risk of overtrading is ever present.
First thing I’ve built is a balance and equity, drawdown status bar, as per the last post. To help me keep tabs on my drawdown limit for the day, my rolling performance and to help me to remain aware of the typical lot sizes I need to be trading as the account grows or shrinks.
The next thing I’m looking to build is an automatic trade manager which offers opportunities and also manages stops and scaling in and out as the price action unfolds. However I am in two minds about this as it might become distracting to have lots of opportunities presented that don’t have any bearing on the real world. I would like to identify trading zones, then give alerts for every entry signal appearing within those, but this might also not be practical depending on the timeframe the thing is running on. You could have lots of, or too many signals in an hourly liquidity zone when they are presented on the M1 chart.
This is ultimately the direction I wanted to go in for my trading so I should have a stronger bias towards it, but I’m also torn by the fact that if I rely on a machine more than myself I run the risk of not performing optimally.
So I’m just holding off for a day or two while I make that decision, and then I will attempt to implement or not that EA and see how it starts to go.
Either way the plan is to to wait for a strength reversal in a key area, as ever, or enter trend pullbacks until the trend is provably reversed.
The risk with only trend trading is that it’s easy to make money in a bull or bear market but when choppy or ranging that’s when the reversals come into their own. And as it’s often choppy in lower liquidity X or sessions it is good to have both tools to hand.
At least this time, compared to last time, I will be starting out with two lots and committing to each trade far more than I did at the start of the previous challenge. This way any risks taken can be worked back and recovered over the following 3 weeks if any damage occurs, but I’m also covering the trades quickly at break even from around the 1:1 area and from there I am scaling in and using quite a clear exit strategy now; so I am hopeful that the first few percent of the challenge should come quickly.
And of course if I managed to actually complete the first phase there is the second phase which is no less of a challenge, only a slightly smaller percentage. However you do get double the amount of time, which will allow for recoveries and steadier trading, which I presume is what they are looking for.