Now that is something new and sounds interesting. I think you should test it though for very many trades first, keep us updated and we see how it goes. You forgot although the situation when you lose both trades. It is odd but can happen. Like an NZD rally and a EUR weakness gives you two losses and if your average win with two such trades is + 30 pips (once you win lets say + 110 pips and lose - 80 pips with the other), but with one bad trade you lose - 160 pips (2x lets say - 80 pips). This means your system has to work perfectly and make your little gain at least 6 out of 7 times to come out with profit in the end. And in this case we still talk about a mini profit.
But sound interesting so after some test results, tell us about it.
The thing is here Iām trading my system and not the 80 pips loss. So it will work out a bit differently. But you are right it could happen. The only problem is there is no way to backtest this unfortunately. But I just gave an example so may be Iāll trade it or at least monitor it on paper.
EDIT: But may be the extension of that idea is to form a tree that you trade simultaneously. So that you end up selling and buying all currencies simultaneously and rely on the risk reward to make you the profit.
[B]Another Edit[/B] Now what if: NZDCAD short, EURCAD long, AUDNZD short and EURAUD short. This is a situation where winners and losers will be equal or am I missing something?
I do not have initially-set losses or target unfortunately. But Iāll keep you posted on my progress.
So far I longed at 1.36750. Iām yet to short NZDCAD however as the signal is not complete.
There is a possibility I donāt take the NZDCAD trade because my broker would not let me split my lot size in half (which would 5500 each). It would only accept 5000 for instance. So at the moment the full 11000 is allocated for EURCAD. What I can do is hedge 5000 for example then sell NZDCAD sell. But if the trade goes well I probably will not hedge it and will settle for observing NZDCAD until next trade.
@Peterma, the thing I like about your post is that you are one of the few people who trade divergences correctly
The only trade I opened up so far this week is the EUR/CAD. Favoring the CAD. I do agree with you on possibly CAD doing some damage this week.
But, as it stands now, Iām down 100 pips.
Iām not worried. In the least. My training is paying off.
If you guys have not seen my new thread, itās called ātrading in the zoneāā¦in the newbie section.
Iām changing quit a bit because of that book. Iāve been reading it over and over, daily also.
I feel so much free er now that Iām getting closer and closer to having the correct trading mindset.
If you havenāt read itā¦I think itās a must!
So, anyway, itās all good.
Itās all about playing the probabilities.
I just wanted to note that Iāve been there down 100pips at one point 300pips and I wasnāt feeling anything until I went live and stepped up my lot size. While I applaud you on your effort in trying to have the right mind set which I also I believe every one should have if they want to win but I also wanted to remind you that you could do better. I would trade during London or NY and go in at the right time, I know finding the right time to pull the trigger is easier said than done but with time and enough experience youāll get it step by step.
I have been trying it for weeks no system will give you heads up sorry Phil as much as Iām all for your system thats still my view. I like to view 30m chart from late Asia to early London if I see a momentum in either direction I jump on board but I would usually have my analysis watchlist for the day or week sometimes it goes as per plan sometimes it doesnāt I jump on board with whoās going the fastest if that makes any sense. Iāll usually have not more than 60-70pips SL and if youāre able to catch the momentum or get in at the right time especially during early London youāre basically all set it wonāt even come near your SL provided that thereās still momentum.
I also tried trading with risk reward ratio similar to yours I was set to make it work. But I came back using the old 1:2 or higher. Not saying it wonāt work but it didnāt work for me.
I entered NZDCAD short at 0.88985 just now. But its a very small amount because that what my money management rules allow. I frankly didnāt want to hedge EURCAD after it moved 150+ pips in my favor on the first day.
I was mentioning last week about the diminishing threat of deflation in EZ as I saw it:
āNow we have a scenario that there is a probability that this threat is coming to an end, simply caused by a surging USD and the use of Chinese labour and materials by many European manufacturers.ā
Today this was a news headline:
āEuro zone inflation was higher than expected in May, data showed today, as consumer prices started rising again after five months of falls and stagnation despite a continued strong drag on the index from cheaper energyā.
If it was the case that the continued threat of deflation was a driver in the Euro downtrend, then there is little surprise in the market reaction today.
And finally, on Greece - the Troika are agreed on a blueprint (which is progress), the Greek Govt is agreed on a separate blueprint - will the two proposals merge? - there are hints of movement on the pension question - if itās going to happen then it has to happen within the next days.
(rumours are circulating that the deal is tantalizingly close)
I remain optimistic - the again I am always an optimist
Peterma, this is all good and well for the immediate term. But at the end of the day a trend of a currency is determined by interest rates and the US (whether this year or not) will hike first. In other words, This is only a squeeze for dollar longs. Or do you see it differently.
Hi Philip, my sense says that Europe (aside from the Greek risk) will offer investors better growth potential over the next couple of years - if I was to lock into a 2 year investment I would hesitate on USD, just in the same way that I would have hesitated on EUR back in Nov 2013 ( earlier post).
Interest rates form part of the growth picture, if investors took the view that a rise was not sustainable or that it could negatively impact on growth then itās only short term traders who would jump in - so the case has to be made that any interest rate rise is positive for the long term.
Hey guys.
Ok Philip, Iāll join ya. (trades update)
Trades taken profit this week for me.
NZD/CAD --set 2 weeks ago, finally took when the market opened.
AUD/JPY ā set 1 week ago, took this week.
AUD/NZD ā set 1 week ago, took this week.
EUR/NZD ā this week. Was a hedge against my other EUR trade (loser one).
Losers.
EUR/CAD ā Your welcome Philip. Feel good giving it to you.
Running trades.
USD/JPY --opened Tues. Looking good so far.
EUR/AUD ā looking for south (AUD)āopened Tues. Came within 15 pips of my sl, then turned around. Back in the ball game with it now. My reason for getting in it was it was standing on my line between trending high and ranging (1.4293 favoring AUD). Chances should be better for 100+ than 200-.
AUD/CHF ā looking for south (CHF) --opened today, during early London. Used it as a hedge for the previous trade. The CHF is trending high, and a nice retrace happened early this week.
Again, all of the trades are trending high (my determination on weekly time frame). But the EUR/AUD was the only tipper.
Correct me if Iām wrong, please: I keep reading (at grabthefx.com; cnbc.com; bbc.comā¦) that Greece stepping out of the EU might translate into a massive drop in the EUR; I suppose thatās one of the main reasons for the pressure coming from US, as rates would be probably increased soon, and this would make the Dollar to appreciate (even more)ā¦ and if the Euro keeps falling, it wonāt be nice for economic sake (for the US)ā¦ How about that?
Yes, Greece is a risk for Euro longs, FE linked back last week to a little article re investors buying Greek shares, this typifies the current attitude, including my own, that there will be some sort of fudge solution to the problem - failure will mean a sell on Euro for some days, then the vultures will likely circle.
Todayās action on Eur/Usd is more of the same on the inflation story - this from the ECB today:
[B]After leaving interest rates at a record low 0.05%, the ECB raised its inflation forecast to 0.3% for this year, having previously put it at zero, saying that its trillion-euro-plus asset buying programme was paying off but had to be seen through
[/B]
This from The Organisation for Economic Cooperation and Development today:
[B]the US economy to grow just by 2% this year and 2.8% next, down from its November forecast of 3.1% and 3% respectively[/B]
And then to add a little more;
[B]expects growth in the euro area to rise by 1.4% this year and 2.1% in 2016, up from 1.1% and 1.7% respectively[/B].
