GBP/JPY Equity Building Profitable trading strategies

[rrram2]

"So long as there is breath in me, that long I will persist. For now I know one of the greatest principles on success; if I persist long enough I will win."
Og Mandino

[TradeMonkey]

I shorted at 210.58. Yes, I know. 3k down and diving. I'll retire now and live to fight another day.
Thanks for the words of wisdom. I guess I'll keep my eyes on this thread from now on.

[Andrewunknown]

This is the type of thing I'm talking about, and why I always feel something poking at me in the back of my mind to post admonishing remarks here.

"I'll never short this pair again"

Great - a new trader who is resigned to trading this pair long only because of a single mismanaged trade. The real problem here is not direction (though in this case that was ill-advised) but trading without a buy stop to limit risk/loss. No trader, however new, ought to think - or be made to think - shorting a pair (even GBP/JPY) is a categorically bad idea. Show me a reason (other than negative rollover, which is a virtual non-issue for anyone who is a short-term trader) the Guppy should not be shorted when it is exhibiting a downtrend. And yes, the pair has historically exhibited extensive downtrends of significant duration right alongside uptrends. If in doubt, look it up on a chart.


"I will be the first one to tell anyone only a fool goes short GJ."

Come on, rrram: that's patently ridiculous - why "a fool"? Please tell me it's not because they can't earn positive swap. The Guppy goes down just as easily as up. The smart trader goes where the market goes - the only fool is a perennial long or short who lets legitimate trading opportunities pass them by for no other reason than because they believe trading in a particular direction is summarily inviable, no matter the market context.

"Andrew contends the floor could still fall out from under us.
This is nearly impossible at this point."

Why is this "nearly impossible"? Decline may be more improbable than further advancement (I'm not suggesting that here, or denying it), but a case has to be built for that. If you have the chance, try to quantify what you mean by "nearly impossible" with supportive detail.

[Andrewunknown]

Originally Posted by TradeMonkey

I shorted at 210.58.

That wasn't a bad entry on a short. In fact, that price was just below signficant resistance, which can be a very good place to go short. What your trade was lacking was not a good price, but a good reason to go short at that price. Shorts at or just below resistance points are invalidated by a break of that resistance level that is held (which establishes it as support) - this is where the stop may have come in. At any rate, not a bad place to short: having a substantial reason for doing so is what might've been missing.

[TradeMonkey]

Thanks Andrewunknown. It was the shock of losing 16% of my account in one single trade that made me extra cautious about gbpjpy (more than rrrams' comments). My entry was based on a reading of the Accelerator Oscillator (red, tinny and almost crossing the 0 line) and stochs (bending down touching the 0 line) on the 18/Jul, just after a full bullish candle on the 17th, plus resistance. I had big winning trades the day before and was dangerously confident. Big mistake.

Anyway, lesson learned. Will need some two weeks of trading to bring my account back up to break even. I hope that this thread will give me some guidance.

[rrram2]

there is no news, and slowish trading.

[rrram2]

The place to go short is nopt when it hits 0, when it is touching the 0 line is more likely where it is OVERSOLD, and NOT the place to SELL.

Also the very positvie GBP news that morning at 430 was a shocker.

YOu cannot rely soly on a couple indicators. Especially an oscillator.
most oscillators are trailing indicators NOT leading indicators.

I will never go short GJ again and if I did, I would NEVER NEVER got short GJ with NO STOP LOSS order.

Andrews explanation was excellent and if you were short you should have had a tight stop loss order, right above resistance.

You also cannot assume there is going top be a reversal in GJ just because
the day before was very bullish. RSI is probably a better indicator for nailing reversals.

GJ eats resistance like a cracker.

Originally Posted by TradeMonkey

Thanks Andrewunknown. It was the shock of losing 16% of my account in one single trade that made me extra cautious about gbpjpy (more than rrrams' comments). My entry was based on a reading of the Accelerator Oscillator (red, tinny and almost crossing the 0 line) and stochs (bending down touching the 0 line) on the 18/Jul, just after a full bullish candle on the 17th, plus resistance. I had big winning trades the day before and was dangerously confident. Big mistake.

Anyway, lesson learned. Will need some two weeks of trading to bring my account back up to break even. I hope that this thread will give me some guidance.

[4xStar]

I get a kick out of Jeb over at the G-Y tech thread who has been bearish for 3 weeks now .. today he very reluctantly drew an alternate 3-wave up due to the bullish breakout yesterday but he thinks it may be a "bull trap". His target for next leg up is 213.79.

TradeMonkey .. yes you were trading like a monkey but so do we all at times The important thing is to learn from each trade, keep a journal if possible. 16% drawdown is an owiee, but not the end of the world, many here i'm sure have done worse, I sure have

Someone told me you need 3 reasons to get in a trade but only one to get out. So when you shorted G-Y, what were the 3 reasons that got you in and which one, when violated, should have gotten you back out?

[rrram2]

I didnt get all of that I like a goofball sold out with over 100+ pips at 212 long before 213 hit. Lots of pips this week.

I need more bull traps where I can easily pluck out 100+ pips.
That is not a bull trap! A bull trap to me is more of a fake breakout.
Not a breakout that continues over several hours and includes upward movement of hundreds of pips is not a trap!

Looks like 212.40 may hold, but if not 212.00 should be hard support.

[rrram2]

"It is wise to keep in mind that neither success nor failure is ever final."
Roger Babson