Hi Guys,
This is just a quick note on trading. I wrote this in answer to a question a newbie emailed me.
Don’t put all your eggs in one basket. That and a million other clichés can be applied to your trading. While most of them are pretty useless this is one of the rare clichés that helps.
It is no secret that when it comes to trading newbie’s waste a lot of time looking for a trading system. When they find a system that works they get all excited and think their prayers have been answered. Two months down the track the system stops working and the newbie has to start looking all over again.
It is also no secret why this happens. Market conditions change, what worked today won’t always work tomorrow. It is the nature of the market, it is too fluid to be contained by a simple system. So what do pro trader do to keep making pips in an ever changing market?
Well it is easy…. We don’t put all our eggs in one basket. Take a look at my method for example. My method is not based on one type of analysis it is based on three:
– Scalp lines
– Constant lines
– Reversal patterns
Right now constant lines and reversal patterns are working very well. Scalp lines are not working as well. Nine months ago scalp lines made me plenty of pips while constant lines where useless. In twelve months what works will probably change again. This is because Forex market conditions are always changing. So there is a lesson to be learnt here.
Like the Forex market you need to be fluid. You can’t just use a single for of analysis otherwise as soon as market conditions change your profits dry up.