Hello and welcome to the December edition of the Platinum Newsletter. Being the last article of the year, I would like to wish everyone a very Merry Christmas and Happy New Year!

Over the past month, I’ve reinvigorated my interest in playing Golf. After a long hiatus, I still find it an enjoyable sport when I’m hitting the ball well, although at times I feel compelled to leave my clubs in the bush where my ball often ends up.

On a recent game whilst I was walking up the 9th fairway (as I was meant to be playing down the 6th), I was thinking about how golf psychology seemed closely connected to trading psychology. For those who play, do you ever try and hit the ball so hard off the tee to send it over the trees instead of safely playing around them? When playing out of the rough, do you ever try and play the miracle shot by trying to split between a few trees, with a slight fade to land on the green in one? If you play golf you’ll know what I’m talking about. If you don’t have the faintest idea what I’m saying, don’t worry, I’m referring to all the reckless shots you take that end up costing you more shots than less!

My point is, do you trade like you play? Is there a common personality trait? Do you tend to overtrade and load up with a big position to start with? Maybe entering on a time frame that is too small for you to handle because you can see an increased reward to risk ratio, instead of waiting for a higher probability entry setup? Do you take those risky trades in an effort to make back some wins after a streak of losses? Or are you more disciplined and play the percentage shots for a more consistent approach that keeps your emotions in check and any losses to a minimum?

It’s an interesting analogy that doesn’t just apply to golf, it could relate to any sport. Now that 2020 is coming to a close, take some time to reflect on this year’s trading and how you might be able to improve on next year’s results. What reckless trades did you take this year that led to losses that could be completely avoided next year? What did you do well in 2020 that you can continue doing in 2021?

A recent Classic Gann Setup that has the hallmark of a disciplined approach is the recent run out of the 2 November low on the Aussie Dollar. There has been plenty of discussion around this low in the coaching groups this year as we saw it coming, and the steep run-up that followed the low was expected. After a false break double bottom that occurred at the right time, the market produced a very clear signal bar which was good confirmation that it was indeed a false break. Looking at Chart 1, you can see that one potential entry strategy was what David calls a “Type 2” trade entry, straight out of the Ultimate Gann Course – Chapter 4 Time by Degrees

Chart 1 – Australian Dollar Daily Bar Chart

If you entered on 3 November, one point above the high of the previous day, you would have a risk of 69 points for the trade. At $10.00 per 0.0001 points per contract, you have a risk of $690 with profit as of 11 December of $4,740.00 or a Risk to Reward Ratio (RRR) currently sitting at 6.7 to 1.

This means that if you see another opportunity to add to the initial position or even reverse positions, you would be a couple of shots up so to speak and have the confidence of trading with the market’s money. This might be a safer way to both be profitable and build up momentum.

I wish everyone a very Merry Christmas and all the best for your trading and studies in 2021!

Gus Hingeley