I’d like to hear from everybody who is trading this pair. Your experience and tips would be greatly appreciated.
Last night 11PM EST I was planning to enter on a short trade but wasnt fully convinced because the 1D chart was still showing an uptrend but my 1H chart was showing a downtrend. I would have made money this am. From Nov 16-Nov 30 made 386 pips.
Please post your chart. By the way, this was no typical rebound - that is, it wasn’t unexpected to those who scan the economic calandars. At 7:30 this morning three reports came out:
Nonfarm Employment Change
Average Hourly Earnings m/m
This is what caused you to get stopped out. It was impossible to know this unless you check the calandars first. Some people aim to profit when these reports are released; for beginners and most everyone else, it’s best to avoid them until you are ready.
You can typically hedge the GBP/USD with the USD/CHF pair they “normally” move in opposite directions, there was a very good thread about this on the Oanda forums.
I dont think I would do long term trades in this manner but working off the 1 hour or less charts it would be a pretty good way to catch both trends especially if you scale in with very small lots when one pair goes south on you. There are several threads that discuss this strategy in detail on Oanda
I didn’t check the calendar that morning. My trade gained +40 pips before the US session. I set my stop loss for a sure gain of 30 pips. I came back a couple of hours to check it - look like the price came down some more and then went back up on the other side.
long the cable @1.9562 last night. My trade went well getting started and gained 25 pips after a few hours. I decided to move my stop loss to break even. By 2am my stop loss got hit and all profits went down the drain. I should have left my original stop loss and would have remained in the trade but I know major economic releases are due this am too.
If you had left your original stop loss and then been stopped out, you would feel much worse about the situation. Moving your stop loss to break even after 25 pips was a good idea, but next time, sell a portion of your position at that time. Then you have taken some money off the table and still have the opportunity to make more, not less. At that point you are playing with the houses money and that’s a great position to be in.
I have a question. Anybody using the daily chart on this pair? I am not quite clear the main diff between trading the daily chart vs. hourly chart. I understand the noise level and head fakes once you get into smaller time frames. If I employ a 20-pip stop loss on the hourly chart, could I use thesame on a daily chart? Is it true that the higher time frame, the wider the stop loss?
The higher the timeframe you go, the wider your stops should be. You can use a higher timeframe to see what the overall trend is and then drop down to a shorter timeframe to actually trade.
Also consider what pair you are trading when deciding your stop losses. The Cable is known to have plenty of spikes while the EUR/USD has more fluid movement. So when trading the Cable you should consider this when deciding on a stop loss.
I love trading this pair but I have the same problem all the time. I trail the stop too close and it knocks me out. I have started putting my stop further away beyond important fibo or daily s/r levels and it has been working better for me. Unfortunately that means a smaller risk/reward since the stops are further out. I love this never ending learning curve