As part of the Trader of the Month Competition we ask for the winners to share their trading journey and advice with their fellow traders. Michael Horneman was 10th on last month’s Trader of the Month Leaderboard and I have no doubt that we will be hearing more from him in the future.

Keep reading to learn about Michael’s Trading Journey and we are also lucky enough to have him share his advice as he offers an insight into his own Trading Plan.

Michael’s Story…

I began trading around 2 1/2 years ago, I first started with learning to trade Eminis. This initial experience is what first got my mindset and phsycology ready for trading financial markets.
I didn’t trade for very long as I had limited capital to begin with, and like most beginner traders lost money, but I learned some great lessons about managing risk and preserving capital. I was also very risky and too willing to trade, I still had in my head a “get rich quick” mentality and was looking to take every trade I could. Looking back this has also been the pattern for the first 6 months I was trading forex with LTG GoldRock.

To make the change from a mindset of working for money and selling my time for money was not easy, and it has taken around 2 years to really begin to understand this in a way that helps you view money differently.

Initially I was unable to change my mind from “get rich quick” to a managable “get rich slow” but over time have been able to, and this made a huge impact on my daily trading habits. I used to be glued to the screen and really beat myself up if I missed a trade, but this was only because I was greedy for profit, and also didn’t grasp the concept of probability, meaning that even though I missed a winning trade, the next trade is just as likely to be a winner, not more likely to be a loser due to the previous winner. The light switched on for me when I cancelled my trading room subscriptions for trade calls, and then took the knowledge I had gained over the last 2 years and looked at my own set of charts and asked myself the question, I know how this trade trade sets up, now why don’t I beleive it is profitable.

I decided to learn 1 trade back to front, back test it myself for 2 years, calculate the best stop to profit targets, and then once I had done this I was able to see clearly why this trade setup worked, how it worked and how I could profit from it. I now have a simple yet workable trading plan that actually suits my lifestyle, and is proven to be profitable.

My trading plan is so simple and uncluttered now, it used to be so long I couldn’t even understand it let alone follow it. Simple really is better, for both trading and discipline, it is easy to follow a few rules all the time than many rules all the time.

My plan basically is:

1. Take all zingo trades that occur on the chosen pairs CHF/JPY, USD/JPY, AUD/JPY, GBP/JPY and EUR/JPY.

2. Once I check the charts I look at the next possible occurance of a signal and then I list this in a desktop file and put a note on my phone and do not look at the charts until this time. This means I check the charts twice a day at most for 10 minutes.(easy as….)

3. Once a trade confirms take it with the stop and loss targets set out from backtesting, most are the same with a couple of small alterations to help maximise profit without complicating the system. I also leave the trades to run, I do not check them I simply wait for the stop or profit target to be hit. I also use the same account % for stop and profit each time regardles of trade pip size.

4. For each trade that confirms take a screen shot and save as a record of all trade, and also to look back on at end of month to see how each trade set up, and also as a record for backtesting.

This plan has helped me be able to approach trading as a business, and from an outside point of view, rather than of frustration and obsession with profits that were never materialising. I hope to add to this plan as I get comfortable with another signal and have backtested it myself I will then add it to my plan.

So, I guess this has been a long paragraph, but my simply lesson learned would be to get familiar with a few trade setups, even 1 is enough, backtest it yourself to build your own confidence in your ability to place these trade, and personalise the rules surrounding the trade so that you are following your own plan and not trying to learn something that works for someone else. We are all different and so this should come through in our trading, it is not really the specific approach that counts but simply your faith in your own ability to place a trade, and that trade being tested to be a high probability trade. This, and the discipline to continue to do this over the long term will give you success as a trader. I have also learned to be patient, and look to the long term rather than stress over a missed trade, I now look forward to them, especially when they are not profitable….

Above is a screen shot of one of my favourite recent trades, I am now trying to work out a strategy to take advantage of market moves such as this, the trade is the second red arrow from the right, and you can see the significant move that occurred straight after the entry. Looks great in my trade record folder…

Thanks for you help LTG, and happy trading.

Mike Horneman

Tags: Forex Strategy, Trader of the month, Trading Plan, Zingo Trades