Trade less and live more!

We all know that the occasional 'great kahuna' trade is all we need to make things better again after a losing streak. But how about not falling into the temptation of taking silly trades before the high probability, high reward set-up manifests itself in the first place?

If you had traded GBPCAD and its low test bar off a very strong level of support on 20th July 2011 (confirmed with inverse head and shoulders on the lower timeframe) to the conservative target of: 16087, you would have made about 15% (risking 1%). Had you traded it short once it got to the top of its range in August and taken it to target three quarters of the way down to the bottom (50 pip stop), you will have made an additional 17%. Had you done the same again in September, you would have most likely have broken even if you're unlucky but those who held their nerve in November who did the same YET AGAIN would have been rewarded by another 17% by simply selling the top of the range and taking profit three quarters of the way down for a higher probability/lower reward outcome.

That's 49% made in 4 trades....in under 1 year! Trading a strategy which is as old as the hills.

Did you spot any of those set ups?

Do not worry if you did not, because the great news is...the range is STILL IN PLAY. The levels of support and resistance remain unbroken and this has been the case for the past 2 years. So all we need to do is lie in wait for price action to get up to the level of resistance in order to sell, or down to the level of support for us to buy.

The patience is the hard part. Even if this kind of trade is the only thing you do all year, you are head and shoulders above many traders out there who will challenge you for not trading as frequently as them.

You see, while they may smugly think you are a 'part-timer', not serious and potentially not as good as them lower frequency traders should remember those people have an ego while we do it for the money (or rather, capital growth)...and while intra-day traders demonstrate their ability to have a high level of interactivity with the market on a daily basis, we, in turn demonstrate our discipline in staying out the market until our chosen set up is ready...even if we have to wait 3 months for it!! Each side of the coin have their unique skill sets.

This is just an extreme example - I am not that low frequency...but I can happily live live being so.