My Experience as a Trend Trader

From an outsider's perspective, financial markets trading looks like an exciting, risky, and adrenaline-rushing way to make money online.

However, in reality, successful trading should be tedious, repetitive, and unemotional. I personally like the technical nature of the market and see trading as a complex game of probability.

You shouldn’t be thrilled to see profit enter the green channel, and likewise, when your account turns red, you shouldn’t stay up all night. You need to keep your risks low while continuing to trade in your area of ​​strength. 

Regular trading procedures will go hand in hand with the steady pace you are looking for as a trader. Random trading routines can lead to random results. Here is what the trend trader Matt shares.

Weekend Analysis

My trading week starts on the weekend. When the market is closed, I look for the best US stocks and currencies that outperform the overall market.

If the index does not show a clear trend, I will not necessarily buy any stocks, but I will still analyze to ensure that I am ready when the stock market returns to trend. In addition to stocks, I will also manually browse the foreign exchange and commodity markets to find any charts.

I will apply the 3 second rule to every chart I look at. Start monthly, then weekly, then daily. I will know if the chart is worth trading in 3 seconds. Of course, as a novice trader, this may take longer, but as time goes by, you will learn to close the chart quickly.

After I have scanned the stocks and analyzed the foreign exchange and commodity markets, I will compile a watch list for the next week and modify the current watch list if necessary. All in all, in a market with a strong trend, my weekend analysis took less than 2 hours, and in a quiet market, I spent much less time.

Intraday Transaction 

The truth is that most retail traders are losing money. Most people claim a loss of about 80%, which is a huge number.

Another interesting point to be noted is that the vast majority of these 80% are day traders, over-leveraged new traders, and, in general, conceited and arrogant traders.

Even without some obvious mistakes, such as good risk and bad psychology, it is difficult to make profitable intraday trading. This takes more time and effort, and requires close to perfect market timing, and pressure mount up due to intraday trading.

In long-term trend trading, the screening time is the shortest, and the importance of entry time is not high because it has a long period. 

I've been pursuing money eagerly before, but I never really thought about finding a system that really fit my personality and lifestyle. Later I discovered long-term trend trading.

Hold trades for several months at a time during the trend. It makes sense to me. It fits my lifestyle and the potential rewards are impressive.

The main attraction of trend trading to me is that it takes the least time. From Monday to Friday, my entire trading program takes less than 20 minutes a day. This involves finding settings from my watchlist, entering orders, managing existing transactions and updating my transaction log when necessary.

I prefer to perform daily analysis in the evening after the market is closed. This is purely a personal preference and there is no problem doing it this morning. However, since the foreign exchange market is 24/5, if you prefer morning analysis, you may miss some settings.

Monthly Reflection 

At the end of each month, I want to do some thinking to make sure I keep improving. Check your transactions every month or more if you like. With trend trading, you usually have less trading than day trading or scalping.

This means that reviewing past transactions should not be too laborious. I also recommend checking your trading plan at least once a month. As a newbie, you should review the trading plan daily to ensure that you follow it. In addition, I will meanwhile look at the goals to ensure that I am still working towards achieving them.

Strategy Optimization 

I suggest you look for ways to adjust your strategy around a year. I'm not saying that you should abandon your original strategy during the test drawdown to find another strategy. However, small changes to the rules can have a significant impact on your transactions. I don't recommend you to do this if you have only been trading for three months.

This is because you need a sufficient sample size to correctly test changes. For example, this year I made minor adjustments to the management of trailing stops, which will improve my future earnings.

Your trading procedures must be consistent

To maximize your chances of success, your trading procedures must be consistent. If you only analyze based on your mood, you may miss some good trends. In trend trading, one or two megatrends can provide most of the profit for the year. If you have diversified risks and there are many opportunities, you should seize them.

Similarly, your open positions should be managed when the market changes, not when you think it is necessary. There is no secret to successful trading, you just need discipline and consistency.