As a trader I have always lived by the rule of having one strategy and mastering it. Once you add too many, you could start confusing yourself and then looking for signals that are actually setting you up for a bad trade. Develop one and master it. However there are times when an additional strategy can be beneficial to you. When you have a trading partner that utilizes a strategy that is also successful but different than yours it can help you see things you otherwise wouldn’t.
A perfect example is my buddy Paul and I. As you know from previous articles, I trade momentum shifts and trend reversals. Paul has been working on a strategy using EMA and finnobacci to determine his moves moving into a trend. Now although I haven’t learned his to the full extent, I do have a slight understanding. So when I am working on a setup to either buy an oversold position or short an overbought position, I ask him what he is seeing. At times our strategies actually align which is great.
As the cliché goes “two heads are better than one”. It especially applies here. Now everything is in hindsight when trading. We are fighting algos and market manipulation all day every day. So we try to stack in the odds in our favor. Case in point, today I was looking for a short on the E minis at 2935 and Paul was looking for a breakout to 2395. Now when looking at my indicators I was like there is no way. It’s so overbought. However I trusted him and my gut and stayed out. It reached 2395 and shot a bit past. I missed my entry at 2395.50 and it then quickly fell back to the 2394 level. Now I always say a missed trade is better than a losing trade. This however illustrates how I could have made a mistake by not communicating with him to see what his strategy was telling him.
Now are we always right? No way! The key here is to try and be as aligned as possible. The best traders always seek feedback and enjoy working in teams. This helps ensure better odds and constant learning and adapting to the market. If you have a trading buddy you could already be doing this. If you don’t, Id highly recommend getting one that is successful and bounce ideas around. It could be the boost to your trading you’ve been looking for!