Stringing It All Together

Being CP really requires just that: consistency and profitability. It means stringing trades together throughout the day, the days of the week, the weeks of the month and the months of the year. Whether you call it "grinding it out" or something else, it means in my world that I have to win most of my trades and on the losers, I can't have a bleeder. So I have developed this methodology that gets me into a trade fairly aggressively, tells me if I am wrong quite quickly and gives me an expectation of instant gratfication. I have to put these together, day after day so at the end of the month I can reap a payday.

When Kiki started off, this result was what we were after. We started off with the simplest of setups that happened often, that was readily identifiable and that was also forgiving if you read it a bit wrong, giving you time to get out without a loss. We then started building on this basis and added setups. We are about 60% of the way through the process. The second half is in a way easier than the first half because Kiki now is a CP trader but it is also more difficult than the first half because the setups we are adding are slightly less reliable and more difficult to read.

The question to answer, is it worth going further with more complex trade desicions or is it better to stay with what we have and increase size. Therein lies the quandary. I am very concious of the variation of the so called Peter Principle which, when applied to trading, could be that we keep on increasing size up to the point when the stress on the trader is too great and he cannot operate CP as he did at a lower size. This is a question each trader must discover for himself.

I had computer issues today so I am on my backup with MultiCharts. New laptop is arriving Monday I hope.

Trade 1 was the usual morning trade, Trade 2 was its continuation after pulling back to resistance  - the EMAs. Trade 3 was a failed attempt at the move down in RTH but support held. Trade 4 looked like we would retrace and was the loser for the day. Trade 5 was the actual retracement. Trade 6 hit the Box right on and became Kiki's outside in trade of the day. It did its job and came back to the EMA. I won't say how I calculate the Box but will acknowledge your correct explanation in a comment to the blog. There is usually more than one of these every day.

The position of the EMAs relative to each other and whether they are diverging or converging and what price is doing in relation to them is an important thing to watch. During one of the SIM exercises I gave Kiki, she had to paper trade just using these two lines and the Keltner. Was a great tool.