While I stand by my decision not to trade I can understand why most people would have entered. I think there comes a point when a trading method needs to be reassessed. When your win rate starts to fall significantly you need to take a step back and take a look at what’s wrong with your method.
Personally my win rate hasn’t dropped but I trade my method a little differently these days. At the moment I am happy to take a single trade every two or even three weeks. So I only target very high probability trades and avoid trades like the one we had today.
I realize though that most of you would have taken the trade, so officially I have to say that trade was a loss.
Anyway, I took a step back and took a logical look at my trading method. I tried to spot what was wrong. I realized a few things:
1) I am not properly trading my method. I am trading what is for the most part a variation of my method I crated to trade the erratic market conditions we had earlier this year.
2) I am not subjecting my scalp lines to as much scrutiny as I would usually do. I am leaving them on for longer than 3 weeks. Usually if a line doesn’t break within 3 weeks I remove it but I have lines on that are months old.
3) I am not trading S+R lines (only scalp lines) even though there are valid S+R lines on my chart at the moment.
To sum it up I am traded a mutated version of the NickB method that was created to trade the crazy market conditions we experienced in late 2008 to early 2009. The market has calmed down now so there is no reason to keep trading the way I was in crazy markets. What I need to do is take the NickB method back to its original form. I am starting by trading S+R lines again. Later today I will throw up a chart with all my S+R lines.