I decided to follow a weekly strategy posted in the research section on my practice account trading platform. It advised to short GBP/USD at 1.6050 with one lot then another at 1.62050, with a stop loss at 1.6350. Now, if you’ve been watching this pair since this piece of advice was posted on Wed last, as I am sure you have, you’ll know it went wrong in a big way:p. That’s fair enough, I was never that keen on following anyone elses trades anyway, I just thought I’d give it a go since I am only learning. My question is this though… What is the thinking behind doing it in two lots? I have seen this advocated before, but I can’t see why??? If you thought the price was going to turn at or shortly above 1.62050 why short anything at 1.6050? why not just wait till the higher price before entering the short position??
I frequently use multiple entry and exit points when getting into and out of a trade, keeping each trade size low. I think the primary advantage of doing this based on a 95% win ratio, is that you don’t have to be right all the time. I get out of the trade the same way I got in. The beauty of it is that when the market finally hits a plateau is that you can do the same trade over and over again, until it begins to reverse in the other direction. If you wait till it hits the higher price you may be waiting a long time. No trade, no pips.
Hope this helps.
Here is the full answer to your question…
Click the hyperlink…
http://forums.babypips.com/analyst-arena/12562-using-multiple-lot-positions-improve-trading-fx.html
I’m not keen on adding to a losing trade. My philosophy is to do more of what is profitable and less of what is not. If you’re adding to a losing trade, you’re hoping it comes back in your favor such as a ranging market.
Have been looking for this for a long time! Thanks Tymen!!