Today we’re going to take a quick look at this DAX trade that’s been progressing over the last several days here in this short signal on the Pro-Trading System, Trading College’s signature signal trading software. I’m actually about to actually hit £31,000 in profits today but on this image that I took of my account the other morning it was up about £30,113.
Now let me talk you through what I’ve done to get here and show you the signals on the PTS. I started shorting this at the start of last week and it’s gone up to about 60 pounds per point on the short side. Now what I’ve done is to bank the majority of that trade and now in the image below what you see is my live accounts. So now I’ve left £5,400 on the table here to see if we can break through and get down to this 11,009 30 mark.
Building A Position
Now, what does it mean to build a position? Well, effectively this means adding more trades, more position size in when the trade starts to goes in my direction. So on Monday last week we had a big down day on the DAX. Now we already had a red PTS signal to short beforehand and then the next day we had the big move. So I was already short here on the way down on that big move so that meant that the account grew dramatically that day and, as this market just kept falling on the DAX that day, I just kept on adding to the trade, managing my risks and making sure that I was only risking X percent on each individual trade. As we can see the market then went sideways for a few days and then went back up briefly.
Now at this point I banked some of the profit, took it down to about £24-25,000 and then started adding again on when the market continued to fall late mid-week and then added to it further late last week as well. As I write this, as I said, I’m back down to just the £5,000 left, with 10 pounds a point on the table.
Strategy, Strategy, Strategy
I’d just like to remind you all that when trading you’ve got to have a plan in mind and you’ve got to stick to your plan. This is fundamental to establishing a good trading strategy. What most people do is to get into the trade and then want to get out of the trade as quick as possible. This might be because previously they’ve suffered a losing trade or that they can’t resist the urge to just want to grab those profits.
Dwelling on recent lost trades will have a big impact on the current trade that you’re in. So you want to avoid getting into a trade and then talking yourself out of it. This was certainly me about 17 to 18 years ago but the secret really is to only take yourself out of the trade when you think that the market’s going to have a big move. You need to plan it, of course, and you really need to go for a target. You need to think about where the price is going to go. If the price doesn’t go there, that’s perfectly fine. We all want it to go to that target but sadly sometimes that’s not the case.
What I do is, if I see a bigger swing trade start setting up on the daily chart (we talk about this a lot on Monday nights at scan club) then I will then go down to a one hour and I will add on pullback. As the market goes up I look for a red signal and then for another light red signal, and then continue to short that movement. As I said, when I covered this last week on the free video that we put out, what we are looking for is that the market goes up on a particular day and then resumes the larger downtrend.
So, in the image above we can see that the next move is probably up an upwards one so you don’t want to be shorting or add into your short trade when the market is at its lowest (circled), the worst points possible to start shorting. You want to be waiting for it to go to its recent peaks and then you will get the trigger to short.
Trading With Patience
At Trading College we see that many beginner traders develop a form of FOMO, a big fear of missing out on a big move. It’s vital that you have the patience to wait for those trades. However, if you don’t have the patience, then you can always put an order in with your broker. You go to your broker, grab a ticket and you can put in a sell order to open further back up at a certain level, entering in your position size (be sure to limit your risk with a Stop-Loss).
Many traders think that because they’ve turned on and are sitting in front of their computer screens and looking at the markets that they should start putting in trades regardless; in fact it’s so important that you look for that setup before committing to any trade. Otherwise, if you don’t have a setup that you’re following, then the odds dramatically decrease for you to have a winning trade.
Stay On Target
When the signals on our proprietary Pro-Trading System are telling you that the market is going to take off or start to take a nosedive, that is the right time for you to (sensibly) jump on board and ride that movement up or down. Timing this correctly, mitigating your risk and scaling your position as the market moves is where you can generate the big profits so long as you can hold your nerve and avoid jumping out at the earliest opportunity. Ideally, you want to stay in the trade until it hits the profit target.
It might not hit the profit target but I want to, sort of, challenge myself to say, right, can I hold onto this? Can I sit on my hands, not do anything to mess the trade up and wait for it to hit the profit target. By taking the necessary precautions and testing yourself if how you significantly grow small size trading accounts because you can adapt and add to the trade.
If the majority of your trades in a downward trend are winning but you’ve placed a losing day trade somewhere down that line, then overall you’re still making money and that is what counts. Following a strategy and building your position as the market moves is how you get to the £60 per point mark and is how I managed to achieve this nice £30,000 profit trading on the DAX.
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