My general question is this…
Say a trader, is risk minded & uses ATR to help manage his risk in every trade. Maybe even something along the lines of a Turtle 2N method of money management.
-
One trader is on the 5 minute charts, is looking at a timeframe above, the 15 min for his entry, sees a decent move down on the 15min & then times his entry & sets his risk to 2N on the 5 min bars…
-
Another trader does the 15 min with watching the 30min
-
Another trader does the 30min watching the 1hr
-
Another trader does the 1hr watching the 4hr
-
Another trader does the 4hr watching the Daily
-
Another trader does the Daily’s watching the Weekly
All of them are trading 1% per N, with a 2N StopLoss… All trends from Weekly to 5 minutes are going down, have been going down for awhile. Each trader times the short entry based on a higher timeframe & also uses only 1% of account for a 2N stoploss.
My question, & the main thing that really keeps me out of Forex, probably until I get my head around it, or just assume it is what it is, & get in and never allow my account to grow beyond a certain point is this…
Swiss Central Bank intervened on 9/6/2011 & shorted their currency with a massive % of their GDP & supported the Euro against all timeframes. I looked back in history at the 1 minute bars when it happened, I forget the exact pips but want to say it was around 700 pips in 1 minute at 8am. I mean when you drilled down on that huge spike it was all in a 1 minute bar, in the opposite direction that all 6 traders had going.
How do traders confidently allow their account to grow beyond 500 bux knowing that a central bank can jack the currency in one minute bar, I imagine all stoplosses didnt work & millions of accounts were destroyed.
everyone under daily timeframes account would have been wiped & the trader on dailys might have had some kind account left, but not much considering a monthly atr kicked in all in one minute flat.
is the way to trade forex safely with MM, just to trade eurusd only, i.e. liquidity. do you feel that the major five pairs could every jack a month ATR in under 1 minute, like eurchf did. or do we just trade whatever but never let account to grow with the knowledge that this events, which are rare, but do come around & can completely zap your account regardless of proper MM & use of a ATR to set the voliality in line with your account.
just wondering what other peoples thoughts are on it. thx