In this episode of Truth About FX, Walter gives some key points on how to achieve same results by using either swing trading or long term trading — or this is even possible. What are the different ways that you can sustain day trading while sticking to your lifestyle?
He digs into testing and switching different timeframes, “pancaking” and pyramiding your trades.
Download (Duration: 03:28 / 3.96 MB)
In This Episode:
00:46 – 20% a month
01:45 – pyramiding strategy
02:30 – pancaking
03:07 – two roads
Tweetables:
Take a lot of trades [Click To Tweet].
Look into testing [Click To Tweet].
Add some pyramids [Click To Tweet].
Announcer: Sometimes, forex trading is a wild and wooly place to be. That’s why Hugh is here, to post your questions to Walter, the naked forex guy. Hugh’s got questions and Walter’s got the answers. Here at the Truth About FX Podcast.
Hugh: Hi, Walter. This trader is asking, his single biggest goal is to reach 20% a month. I guess, that makes him a little high for a lot of people but he had been achieving this day trading but he has a son and he needs to scale back his screen time. So, he’s asking, “How do I achieve those same results either swing trading or trading longer term?”
Walter: Right, the 20% a month. Basically, there’s two ways that I would say that you can do that. One is you’ve got to be taking a lot of trades. So, he’s saying that he wants to move to a higher timeframes because he had a son and he doesn’t get any sleep now. He’s got to spend time with this new individual in his life and take care of it which I completely understand.
So, basically, there’s two ways: you trade more often so you take more swings at it — to use a baseball analogy — or you really cash in on your winners so you’re basically pyramiding, adding to your positions.
That’s really the two, the easiest ways to get to that point where you would really wrap it up. For example, when you have a winner and if it goes 50% on the way to your target, you add some more. Seventy percent of the way, you add some more or whatever, any kind of pyramiding system, you put an amount there even if it’s just like half of the position.
Let’s say, you have half positions that has a trailing exit so you really let it go and it could go really far potentially and then the other half, you have some sort of pyramiding strategy so that when it goes as you expect and it goes strongly as you expect that to really strong retracement, you get a really big, fat winner. That’s the other kind of way to deal with that.
For example, you can still trade — in regards to point number one — you can still trade the daily charts and trade 30 markets. You don’t have to just trade the Euro, the Pound, the Yen and CAD, and the Aussie or whatever you’re trading. So, that’s the other thing to keep in mind here.
Simply because you’re trading this Bollinger… I didn’t even know what his system is and the five Bollinger Band thing but whatever it is, he might be looking at trading 30 markets on the daily charts rather than trading 5 or 10 whatever he’s looking at now.
The other thing is I would definitely look into testing, what I call “pancaking”, but obviously, there’s a lot out there. I didn’t invent pyramiding by any stretch but this is something that you can use to turn, let’s say at 1% risk on a trade. That 1% risk can easily turn into a 14% return, if you get your pancaking right. So, that’s what I would do.
You’re either going to take more cracks at it which means more markets, or lower timeframe and taking a lot of signals which sounds like you’re just tryin to get away from. Or, you’ll just really add to your winners by pancaking so that those winners are huge when you get the really nice winners.
That can be frustrating but, at the end of the day, those are really the two roads that I see it, as getting you there.
Hugh: Awesome. Thanks for your advice, Walter.
Walter: Thanks.
SHOWNOTES
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