August blues

August is coming to an end, and after a great July, August has been a month of a slow death by a thousand cuts. The account is down -24% for the month. Hardly any of my trades were winners. I stuck to my system on most trades, but did make errors on some. The slow markets are very frustrating and sometimes lead to impatient trades, which in hind-sight were not right. But mainly, the results reflect the fact that my trading style is not suited for range-bound markets. The ranges this month have been incredibly small by comparison with other months over the past few years. I hope markets don’t become like this permanently!

I have 2 options for dealing with such markets: a) Develop another system for ranging markets, or b) Just don’t trade.

Developing another system has 2 big drawbacks:

1. It is hard for one person to have two contrasting trading styles simultaneously. In fact I don’t think it is possible. Every decision-point will have two or more possible answers, and that is a recipe for disaster.

2. The other issue is how to know when to use a particular system. Range markets can be labelled as such only after a little time has passed and even that is uncertain – how long should one wait? By the time it becomes obvious that we are in a ranging market we may be close to a break-out.

To be clear, there are some clues that point to a ranging market. For example, after a significant move in either direction, one can be sure that the market will range and consolidate for a while. So we could switch to a range-market strategy immediately after a big move. Once the range is decisively broken, we have a trend. There are still many questions that need answering and I will have to do more research.

Until then, option (b) is preferable. Just don’t trade in August or similar periods!

August has been a little unsettling for me – I have felt out of sync all month. The detailed results for the month are in the next post.

 

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4 thoughts on “August blues

  1. gomesfx

    Hi zen, do not get me wrong but,

    Forget range markets !!
    Trade only trend markets !!
    Trade only A+ setups !!
    Trade only higher time frames !!
    Have patience and discipline !!
    Have a very good money management
    Remove indicators !!

    August was a good month !! Just like any other month of the year !!
    Don´t blame the market saying it´s in range. If you with five currency pairs, dont see a trend in at least one currency pair, i´m sorry.

    Definitly you wrote the answer for your question !!
    “… and I will have to do more research”

    I doubt that you are a professional trade, i´m sorry.

    Just never give up and continue with your journey!!

    Best tip: Think out of the box !!

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    1. ZenFXTrader

      Hi Gomes, thanks for your feedback. I shouldn’t blame the markets. I agree with most of your suggestions, eg trade only A+ setups; remove indicators (I don’t use any indicators); have patience and discipline (that’s a never-ending quest); have good money management (I’m comfortable with my MM). But things are a little more subtle. eg trade only trend markets and forget range markets – as I wrote, this becomes obvious only after the move has already started. Did you see any A+ setups in any pair in August, i.e. trending and not ranging?

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  2. gomesfx

    Hi zen.

    If you wanna make money you need to agree (and do it) with all my sugestions.

    About your question.
    “Did you see any A+ setups in any pair in August, i.e. trending and not ranging?”

    Yes !!

    I trade eight pairs including your five pairs.
    And in those five pairs, i had setups in two of them.
    My others setups were in the other three pairs that i trade.

    When we understand the market as traders and not as analysts, become more simple.

    I do not like to showing, but i open an exception …

    Report for august 2013
    5 setups
    35 trades (35 wins 0 loses)
    +50% in account

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