Hello fellow traders,
Today, I executed two short trades on the DAX about an hour after the New York Open (NYO), achieving a gain of 0.82%. My trading plan focuses on the first two hours of the market open. Why? Because the most significant market movements typically occur during these times, especially at the NYO when it overlaps with the London market.
Trading Strategy
As shown on the chart, I traded the pullback because I spotted a wick, indicating a potential reversal. My target was a modest 5 to 10 pips, but the price moved further down, resulting in a profitable trade. “Thank you very much,” I thought. Today’s session felt easy, and I hope tomorrow will be the same.
Despite trading late, I’m enjoying this new style. There’s no rush; I simply take what the market offers whenever I can trade. If I don’t see a clear opportunity, I skip trading for the day and come back the next day.
Risk Management
I did take a risk today because it’s a US bank holiday, and major bank holidays usually mean unpredictable market behavior. Typically, I avoid trading on such days. However, I was prepared to lose the 1% I risk on each trade, thanks to my stop-loss orders that protect my equity. I also set break-even points and profit trails to manage my trades effectively.
Benefits of My Trading Approach
- Focused Trading Window: During the first two hours of the market open allows me to capitalize on significant market movements.
- No Pressure: Trading without rushing helps in making better decisions and avoiding impulsive trades.
- Disciplined Risk Management: By setting stop-loss, break-even points, and profit trails, I protect my gains and limit potential losses.
- Flexibility: Being willing to skip trades on unclear opportunities helps maintain a high-quality approach.
Reflections and Looking Ahead
Today was a good day despite the risks associated with the US bank holiday. This experience reinforced the importance of adhering to a disciplined risk management strategy. It’s crucial to be prepared for losses, set protective measures, and avoid trading on days with unpredictable market behavior.
As I continue to refine my trading approach, I’m becoming more comfortable with my strategies and emotions. Relearning these methods and adapting them to current market conditions is a vital part of my journey back to live trading.
Thank you for following along on this journey. I’ll keep sharing my experiences and insights as I strive for consistent trading success. Stay disciplined, and may your be profitable!
The Idiot Trader
Pingback: Paper Trading Day 8: Top Day Trading Forex Strategies for Consistent Profits - The Idiot Trader