Does anybody remember the Seinfeld episode where George Costanza started doing everything opposite? His life turned around and he women, fame, and fortune. Well I had George Costanza moment yesterday (ed. Repost from Digital Breakfast) . I'm trying a new currency trading strategy that does a few things opposite of what I did before. Here's the revised and stripped down Forex trading plan.
- Concentrate on five major pairs as defined by Oanda.com. They are:
- Watch the economic calendar for upcoming landmines! Fundamentals drive this market.
Position sizing has changed back to a % of NAV model. Use 15% of NAV as the initial position size. Scale the % down as the account gets larger. Ultimate % of Nav target is 3%.
- Use only 10 DMA Bollinger Bands on the 1 hour charts.
- Use my neural net models to confirm trends in the EUR, USD, JPY, and GBP.
- Don't use stop losses. Sounds scary doesn't it?
Smaller multiple entries will help me â€œdollar costâ€ average out losses. The trick is to trade with the long term trend, buy on dips, let positions mature, and slowly scale out profitable positions over time. If fundamentals were to change (bank rate hikes, drops, etc) then re-evaluate trends.