So my problem lately has been that I’d set my SL and TP okay but then it would take forever and a day for it to hit TP. Sure I’d mostly get the direction right but with my idea that I should close trades before the week ends (I don’t like being stressed about my trades over the weekend does that make sense?), this isn’t working out so well.
I either end up taking profit too early or price just heads back down AND THEN moves according to plan AFTER I get out. So my timing seems off.
Here are some of my questions:
Do you set a timeframe or a deadline when you enter a trade? Or do you guys just play it out for however long it takes until it hits your original TP?
How do you decide when to move your TP to a lower level?
purtle good questions indeed.
your #2, I move or get out of a trade when the momentum is leaving or gone.
your #1, I do not set an actual time like an alarm clock but I wish there was an order I could do that with. I play it out until the momentum dissipates.
Short term trades doesn’t much matter but of course, on longer time frame factuals it is certainly relevant. I will generally use what is called the box or rectangle method of determining the time cycle and price cycle for the next dispersion zone.
Anyone who knows anything about the currency markets at the moment and who has history in the markets, more so relating to the major EUR, GBP and USD pairs will understand and support that momentum has slowed over the past year, or more, on a day to day ADR basis. The breakouts are less erratic, the catalysts from news is more subdued and the volatility has certainly taken a hammering. Gone are the good old days of >250pip regular daily moves in perhaps GBP.USD and EUR.USD; and moves of >300pips when the NFP dropped on the wires.
All in all this means that it will take longer, generally, to hit a desired level on perhaps a 4H or Daily chart than it would have in say 2010 when momentum was more liquid and regular.
The trading approach I use now I have been using since 2008. I can tell you with statistical certainty as the years have moved on so has the average trade duration to hit such levels which are using TP and SL ratios at the same constant calculation.
Here’s a current example of my open trades - I used to have an average holding time of around 24 hours once open… Now I’ve got trades open for over a week…
Hmm. This could mean that for a shorter timeframe I should probably target a lower pip goal. That or just be more patient. I suppose the latter is a better approach vs. choking trades and feeling bad about it later on.
Oh man 24 hours. How glorious does that sound. Would you say then that you were more profitable then?
Could you elaborate on this one? Or perhaps you might have a link to share?
Also, it’s so hard to determine when the momentum is gone. Sometimes I get out thinking it’s gone but bam, it was just consolidating. Sucks.
This basically answers your question buddy - if you have a trade with an agreed profit level then let it run - time is irrelevant, what’s relevant is that your trade stays valid. Momentum, per se, never actually leaves a market, it just dries up, momentarily. No one can predict the exact moment that it’s going to return, also high level news usually provides the kick start, regardless of the market even following the news results (the news outcome usually has no influence on the directional bias).
Edit - if holding over the weekend bothers you, which is understandable, then close them out and re-enter on the Monday. Paying spread twice and a slight adjustment to the average price paid is a far smaller cost to pay then being left open to the risk of potential market moving activity during the weekend hours?
Yes you need to adapt to the current market range and volatility so that you’re not knocked out of a trade within ‘normal’ muscle flexing… but that’s a given.
Although, we are talking about TIME. I would not lower my pip target just because it’s taking longer to be achieved even though it’s been proven that I was right in the first instance?
You’re a turtle, so relax, take it slow and let the markets move - this is just a natural cyclical pattern that happens, one that we have to understand and adapt too.
I am actually copying this line and adding it to my trading quotes. Thank you!
And also your idea re: re-entering the following Monday makes sense…I just need to have the guts to actually close out a losing trade with, like you said, a slight adjustment to the average price. I’m imagining pulling this off and can see myself easily executing this on a winning trade but it may be tricky to do on a losing one. Unfortunately, I have trouble dealing with losing trades, that one’s a work in progress. Getting better but not at a place I want to be just yet.
But this is something I think I may just try this week.
Bahaha. Why am I even doubting my true nature. You’re right. I have open trades on with this same situation and your message here is exactly what I need right now. Thanks again for taking the time answering!
There is a reason the the days of the 250 pips moves are gone. Simply put as money supply increase and the volatility increases and the longer tend decreases. Axiom as money supply doubles the length of the trend is halved.
That is is not make believe you can verify on Bloomberg.
And yes, the media, the people to believe whom drive the crowd into a frenzy. I also believe it was the media who prolonged the recession with negative headlines, but i’m sure that’s on #fakenews too - aka bloomberg, Skynews, BBC and any other propaganda media outlet who’s sole purpose for success is based on readership basis - a little similar to some of the members here too where it’s all based on post count and quantity over quality?
