Basically when you enter into the forays of the financial *games* you are almost always presented these two types strategies.These two are the main roots of many many strategies ever employed under the sun . In some forums, i have commented about range trading / trend trading in general.I am currently biased towards range trading , mainly because my primary trades are all mean reverting suited to ranges.But as time passed on, i had often drawn comparison towards the two,and what i find ,is that i cannot discount trending strategies.
Trending strategies almost always employs SL. Years ago i had unsuccessfully traded many trend strategy that tend to hit the SL too many too often.I had tweak the sl ,the indicators,the tf ,brokers, scalping strategies and so on for 3 -4 years straight.Never had a lasting success.Soon i developed a phobia to SL.A lot of those strategies had small stops, low reward,5min - 15min trades and low strike rate.The most it can get is reduce the loss...but the end is the account suffer a slow bleed and slow death. Thats what websites dont tell you about. The strike rates stinks which makes efforts wasted during the prolonged SL streaks not the mention the time wasted and frustrations suffered.All of that trouble just to make up the loss? The idea stinks..well the results wil stinks.You cant turn dung into gold anyhow you wanted too.Dont expect different results doing the same things.
But the research continues on, i eventually looked into the bigger TF, larger room for the trades to breathe,less frequency, slow trades and switching into price action trading.The results are not stellar,but at least promising. The losing trades began to dissappear since the winners overcame the losses.The winners are bigger than most of the losers.I also employed pyramiding which i add up into winning trades in the higher Tf. Finally i get to see the fruits from my labour. The similarity between my other strategy is that i didnt use stops.I just let the trade fly,let it mature.Eventually it has to move somewhere, i just had to weather the initial storm. Thats the mistake i did years back, because i didnt have preparation for the storm.
I also realised my range strategy still has flaws and hole in the system. Drawdowns can get huge when market shakeups do happen, but i do have few options.First i can refer on the previous post which i talked about reducing drawdown. The other option :> I had ride out some market trends about 100 - 600 in the minus.What if also employ trend trading? Instead of suffering thousands of red -pips i could be actually winning based on the big movement should i employed trend strategy by reversing the trade. I can also take this further..a combo of the two will be awesome.I can initially play the mean reversion for about -200 pip dd or so.When the trade goes against us some more , i let trend trading takes over (pyramiding). When the market is not ranging then its trending, i just had to switch sides.But i will always try to begin with range trading. But with the EURGBP it is so rare, i ended up in profit before serious dd occured.Trend strategies are best tended to the medium to big movers of currencies.
In any case when the storm hits EURGBP at least i had some options before i proceed.Thats always another plus to slow high TF trading,it gives you the time ,how should to proceed.
Ps I do closed + 7 pips profit entered on last friday out of sheer boredom.The markets are slow last week as the didnt know how to react to the news.You also get Jay leno on his show joking about how bad the US economy is ..and so does the rest of the world.Stocks are plunging down everywhere post riots,debt,bail out,more debts and crisis left and right.
Times like this is when i entered the short term trades based on 1hour TF.I give you some details ,entered long on 0.8771, it plunges -30, so i add another one at 0.8741..monday closed both on 0.8760. The -30p increment is based on volatility and the current range so watch out.Small lots for small TF.No unnecessary risk here.No stops.Works on slow slow market only.
In the future i will write about combining small Tf trades(my impatience and boredom of waiting) and my main trades.
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