4x1 Trading System Rule
This time I want to discuss about one of the alternative trading strategies that I took from "Bird Watching In The Lion Country" from Dirk Du Troit. I am interested in discussing this strategy because it is relatively easy to apply and what is suggested to be done in this strategy is indeed something that makes sense. Ok, the core of this strategy is 4 points, namely:
1. One currency
The point here is that we are encouraged to concentrate on one particular currency or pair. Understand correctly the behavior and nature of the pair we are trading. Learn the nature of the movement, its daily range and the factors that influence the movement of the pair. In short: understand the true "character" of the pair. Even if we want to trade in a few pairs, take pairs that are still "brothers" such as for example: GBP / USD, GBP / JPY and USD / JPY or it could be EUR / USD, GBP / USD and EUR / GBP. Why?
Well, actually to make it easier for us to understand the behavior of each pair, because the pair of siblings indeed influence each other. Indeed, to recognize and understand the behavior of a pair really requires patience, similar to our understanding of a person's behavior.
However, if we already understand and know the behavior of a pair very well, we will not often be surprised by the movements that may be beyond predictions. Usually a trader has a mainstay and favorite pair of each. I myself feel more suitable to trade in the GBP / JPY pair because I feel it's quite familiar with this pair, after a relatively long introduction period plus MC several times.
jpp jpy
2. One Lot
The purpose of one lot does not really have to be translated as we have to trade in 1 lot. The point here is, use only low margins so that it is relatively safe to hold back the pair movements that may not always be in line with our expectations. How much margin is safe?
Mmm ... actually depends on the style of each trader. Only for a while I suggest using margins between 5-20% only. One of my mentors suggested using a margin of only 1% per position with running positions (positions / transactions that are still running) between 5 and 20 positions. However, there are some traders who use 10% margin per transaction with running positions only between 2-3 positions. It all depends on taste. It's just that, margin management here really needs to be considered so that our margin resilience is maintained and of course to avoid the Margin Call as much as possible.
3. One Direction
That is to say here, we are advised to just follow the major trend or the main trend that is currently in effect and avoid opening positions that are in the same direction in the same pair. The reason, to make it easier for us to control position. Dirk Du Troit described, that if we do open positions in different directions in one pair, it's like playing chess against ourselves. At a minimum, said a trader friend, having a position in the opposite direction would make it difficult for us to pray. Well, yes, we should do it in detail, for example: come on GJ, go down to 131.40 so that TP for its sell position, then it will rise again, so that the buy position also gets TP too. It's troublesome right?
4. One Percent
That means here, set a reasonable target. It's a little okay, as long as profit. There is no need to hesitate to close a position and close the trading platform if it is felt that there is enough profit for a certain day or period. Don't hesitate to take profit if you feel it's enough.
Anyway, maybe I need to add one more thing: don't be greedy. Set daily or weekly targets. If the target has been reached, close the trading platform and leave your trading desk. Ok, what we are talking about above is only an alternative strategy that we can implement. All returns to each trader to determine what strategy is most suitable for ourselves.
My advice, just enjoy every process in trading. Don't trade into a burden, because after all, psychological conditions are very influential in making decisions related to this trading activity.
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