[B][U]Pull up stop loss to breakeven on; aud/usd[/U][/B]
Well after 44! days the GBP/CAD trade has final come in with an acceptable 225 pips profit. [you may have got more pips if you entered late when the original [my] position was negative.]
The markets really have been quit slow this year in with regard to trend continuation, alot of pairs have mostly been in consolidation or distrubution. Neither of which make a very nice trading environment, however, due to the larger nature of these daily trades, they can generally weather the storm and come out on top!
Hopefully in the next week or 2 we should see some more profit.
Stay tuned.
Great patience. Great trade. Worth the wait…? For me, yes.
Well it depends how you look at it.
The gbp/cad had been in a sideways range for about a month, so trading it on anything smaller than the daily chart would be quite difficult and probably result in multiple losses. So, yes, it did take a long time but the reality is that I trade to make money not just to trade. I would much rather have one trade make a few hundred pips than say 10. That way, your not fighting the spread, news releases are not as relevant/risky and basically you have to do less work, so have more time to look for other trades.
Not lossing money is just as important as making it.
The gbp/cad trade is a reasonable example of the validity of a trade. By that I mean, just because a trade goes negative at some point it doesnt in anyway mean that it isn’t valid anymore. This is often something that newbee or unsuccessful trades have issues with. A newbee trader might think he’s wrong or panic as the price action goes against hes initial assessment but the fact is what ever makes your system work in the first place has to be trusted. The moment you start to second guess your system is the moment you begin to loss money. When a position goes negative it doesn’t invalidate the trade in anyway, the longterm overall trend is still the same, the major support and resisitance, the relivant the higher highs or lower lows still remain.
A simple way to look at it is this; an open position doesn’t mean a whole lot.
Ok, well we’ve just had two positions come in, one positive and one negative.
Ive looked over the signal for the negative position and I’d read it wrong!! And no, thats not what I say if a trade goes wrong…This is extrememly rare and I can only apologise, It wont happen again!
It will most likely still be a buy on the AUD/CAD, but I shouldn’t have been in it yet. wooops.
It looks like it maybe as low as around 1.0250.
Stay tuned.
NEW TRADE;
long; nzd/cad @ 0.81894
stop; 0.76587
limit; 0.87951
NEW TRADE;
long; aud/usd @ 1.06136
stop; 1.01203
limit; 1.12672
NEW TRADE;
long; nzd/usd @ 0.82601
stop; 0.77694
limit; 0.89137
NEW TRADE;
long; aud/nzd @ 1.28479
stop; 1.22326
limit; 1.34767
Got an eye on it.
Glad to here it.
Mostly the pairs are getting ready to set off again, following the period of pulling back we have just had.
Alot of newbee traders find it difficult to accept that open positions can often pullback from a large profit to break even or actually all the way into negetive pips. But taking profits prematurely [before they hit profit limits] is a very bad idea, its bascially serves as a false economy.
By that I mean, it may appear that the trader is ‘banking’ alot of pips, but the reality is that the system is much less efficient and can actually result in a negative risk to reward ratio, making it very difficult to make money in the long run.
However, a ‘great’ risk to reward ratio of say 10 to 1 [reward to risk] is not nessacarily a good thing either.
All positions and their stops and limits should be based on validity and that alone. A postion should never be taken based on a set of random numbers ie. a £1000 profit or a £500 stop loss, or 500 pips etc etc, these are just random numbers, random number that the market does care about!
Its the same with the risk to reward ratios, they should be relavant and valid, nothing else. Obviously the should opperate within your set boundry ie at least 1;1 etc, but only ever be based/plotted on valid technical analysis ie overall trend, higher highs, lower lows, general s&p etc etc.
Good notes. Thank you.
I am a newbie, and appreciate your post. I’ve had knee jerk reactions to spikes, etc. I’ve also saw "banked profits disappear into the red. Frustrating.
Basing SL and TP on valid points vs random numbers makes alot of sense. I’d like to know why you shose the SL for the last trade you posted…? I ususlly look at the last significant resis/supp point, but sometimes its difficult to define.
Thanks for your time.
Hi rtmason7,
With regard to having ‘knee jerk reactions to spikes, etc’, this isn’t necessarily a bad thing if its of benefit your trading system.
Its not a any benifit to me or mine, but thats not to say it wont be to anyone else. I think alot of people believe there is one one or maybe a few ‘secrete’ ways to make money on FX. Basically some holy grail that can never be found.
The reality is that there are probably literally millions of ways to make money on the FX market, unfortunatley [or fortunetly, depending on how your looking at it] theres almost infinate ways to lose money.
Immediate reactions to spikes from news or technicals could be very useful if your type of trading relies on split second execution, so scalpers can have trades that open and close within minutes or even less.
SL and TP based on S & R will always be subjective, like just about everything else in FX. Most things in forex can be interpreted in multiple ways, the important part of the interpretation is that it is relavant to the trade you then place.
There is little use in paying attention the major support and resistance thats hundreds off pips away if your only going to be in the trade for say 40 pips.
I dont discuss the specifics of my trading system but I will say this. Everything I do to find, place and manage a trade I base on validity and therefore I have created a system over the years that involves minimal variables and subjectivity. So simply put, I trade off the daily chart, so my trades are medium to long term, so my stops and limits are the same. ie. a trade that has the possiblity or even probabily of lasting a couple of weeks or even several needs a stop thats is appropriate. A stop like this will be based in a very similair way to the limit, taking in to regard major, long term S & R, so to do this on a Daily chart a trader would need to look at a minimum of about 6 months of price action, all the way up to multiple years.
I hope that helps.
Yes it does.
Thank you.
NEW TRADE;
long; usd/sek @ 6.69413
stop; 6.50417
limit; 6.93528
NEW TRADE;
short; eur/gbp @ 0.83337
stop; 0.85312
limit; 0.81434
Morning all.
Earlier the GBP/USD position closed at a loss. : [
This is unfortunate as im still totally of the opinion that it will be going down and that the trade was valid. I expect it to turn down and basically perform as expected within the next 100 - 200 pips upwards if it does push slightly higher.
So, sorry chaps, but hopefully you will see it do as expected despite being stopped out.
Move eur/usd profit limit to; 1.23886
Pull eur/cad stop loss to break even.
Move nzd/usd profit limit to; 0.87640