When I enter my first position on this pair, I already have in mind that I may enter additional positions if the trade starts going against me. This is one reason I use a position size smaller than normal. Another reason is so that I can absorb several 100ās of pips movement against me without sweating too much.
I keep about 100 pips distance between positions. The distance between position #1 at 2.4090 to position #4 at 2.3795 is 395 pips. I donāt think Iām spacing them too closely.
Since 19-August, Iāve averaged down a trade using multiple positions on this pair 3 times. All 3 times I exited the trades with more than 200 pips profit. I donāt usually average down positions, but this pair has shown a great deal of volatility.
My exit strategy on this trade is to get to around 2.4050 and then exit positions #1 and #2 for break even (#1 would be -50 pips, #2 about +50 pips). At this point, #3 will be at +150 pips and #4 at +250 pips. I will then set stop losses of about 100 pips on each position to lock in pips. I did something similar on a 4 position trade between 19-Aug to 25-Aug.
Now all I need is for the price to cooperate and go up!!!
I just remembered that your first 2 positions were 20 pips away from each otherā¦i also did this averaging down and most of the time it worked wellā¦
I was only thinking that on a volatile pair like this one i would average only every 200-300 pipsā¦
Thanks for your detailed explanationā¦interestingā¦
My first 2 positions were 85 pips apart. You may be thinking about eddieb in the āBalls of Steelā thread who entered a second position in GBP/AUD about 25 pips apart. Itās working out very good for him as his trade has moved up over 100 pips.
Sure, itās possible. But I think that it is more likely to hit a good support at 2.3700 if it continues to go down. Then I hope it will bounce up and go to 2.4000 and beyond.
If 2.3700 does not hold, then the next support level is at 2.3400. I hope it does not go this low but I accept the possibility of that event.
GBP/NZD made a good move up shortly after the NFP report and I closed out all of my positions. Positions #1, 2, and 3 sold at 2.4069. Position #4 sold at 2.4000.
Position 1: -21 pips
Position 2: +64 pips
Position 3: +174 pips
Position 4: +203 pips
Total: +420 pips
Iām glad to be out for the weekend with a nice profit. For several hours it tried but failed to break 2.3980. I almost sold off at this price, which would have still netted me a good +130 pips. As I write this, I see that it has broken 2.4000 but canāt hold above this level. It could still rally all the way to 2.4200 today.
No more trading for this week for me. Good luck to everyone. (eddieb, well done on your GBP/AUD)
NFP was not a huge number, so it was really anybodyās guess how the market was to reactā¦ Thankfully for us, GBP/NZD reacted with a three-hundred-pip rally to the upside
Possibly, but without momentum it will be unlikely to carry on much further: with the liquidity drain brought about by the āUS Labor Dayā holiday today, and with the RBNZ rate decision only two days away, we would best apply a hands-off approach until this event has come to pass.
Impressive, but how long can it last? I am nearly at breakeven,but would not be expecting further gains until we can be sure that on Wednesday night the RBNZ will cut rates by 0.25% as forecast by economistsā¦
