I was actually quite looking forward to the chapter, as her experiences can give me an insight what the professional does. After reading it, I find that it is actually quite similar to what my army friend said, who is also a trader doing the Philippines currency.
Anyway, the chapter gave me a better idea how to do things.
- Specialize in one or few currencies. Professionals rarely use the same strategy for all currencies.
- Study your specialized currency. There are 2 types of trading, which is trend and range trading. You have to determine the currency is more suitable for which. But most hedge fund managers are trend traders.
- Write down your rules and back test your strategy.
- You should set a limit how much to lose in a single trade. And also, you should also set a limit how much you can lose in your account. Lets say you already lost 20% of your account, you should consider if you should discard your strategy. It is possible that the trading environment has evolved into something different from what you back tested.
I can't do anything at the moment, because GFT is down. Can't use the online Dealbook or Dealbook 360. Crap. Hope it does not happen often.
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