I have a strategy i would like too run by peeps I have £25k invested in forex I use a margin call on the usd/gbp Of 3500 pips which will set the dollar at 2.0 The highest its been in 2008 I aim too sell because i know the dollar will get to 1.5 at some stage on the way down i will scalp sell when am in profit I am in no rush and no greed If the dollar goes up in price i have left enough margin call for the dollar too move 3500 pips What do people think of this strategy Too me it feels like a no brainer?
At which price you are planning to sell? Since you have no rush, you can go with it but I prefer to see setup rather than affording 3500 pips move on my opposite direction.
GBP/USD might go down might not, But your approach is not rational. It’s simply based on the presumption that
that pair is going to move lower and you give it enough room to move.That is not enough reason to invest money in,unless you have more information that you haven’t shared yet.
GBP/USD is at about 1.63, you want to target 1.50 with a downside risk at 2.0 (your margin call level), do you think this is rational? Your risking far more than your potential gain. 3700 pips risk for 1300 pips gain.
You then say you want to scalp down as it goes lower. Right, providing is does indeed move lover.
The best lessons to be learnt are the most expensive ones. If you’re in no rush then learn to actually evaluate a rational trading approach, always a good foundation
Am i missing something here 3700 pips is a very ridiculous call margin but if I’m in for long term
And deal in 2 mini lots on a 200:1 leverage will this not work for me?
Am thinking instead of putting money in property and gaining 10-14% over the year i could put it in forex with this strategy and its a no brainer?
Sorry am a newbie what does rational trading mean?
Ive done some research and noticed that the GBP/USD has been moving from 1.64 down to 1.5 hence am betting its going too go down at some point.
Last week the USD hit its peak this year, yes it can break through and go higher i understand that hence my very very safety call margin.
What do you think guys?
Apart from ive got no balls lol
I’m afraid you are missing out a key component in your system, which is’ Category’.
Moreover me and Jezzode mentioned that your idea lacks rationality.
Your strategy has no structure, is it technical,fundamental or sentiment based?
Rational trading translates into sensible trading in your circumstances it is heavily lacking.
Ookay i know ive got alot too learn and your
Knowledge is digested respectfully, i knew it could not be that easy. Maybe its me but can we lower the vocabulary too a layman’s English.
Looks like back too drawing board.
hey, sorry for perhaps being ignorant in my first reply.
I totally understand your reason for the trade, and in simple terms it’s not a bad idea. You used the last significant high in price as the point in where you are willing to cut you losses, and you targeted your profit level where price seems to be attracted to, as you said about 1.50.
What is wrong is this:
According to your first post you are going to risk all your account on essentially a single trade, a hunch at best (guessing that price will go down). The most you can lose is your total account as your willing to get a margin call, but your possible gains are less than your possible loss. It’s like you saying i’ll bet $25k on something, but if you win you get a profit of less than $25k, hence less than even money. That’s an irrational trade, why allow your self to lose more than what you could gain, in reality you always want to make more than your risking (this is what allows you to be profitable in the long run)… does that makes sense. Sure if the trade does come in you will make some money, more than leaving your $25k in a bank account, but the risk to reward is already skewed against you, not what most traders look for.
Have you considered that Sterling is highly correlated to the Euro? The upshot is EU and GU are very likely to go north if the Dollar falls. So as has been pointed out, you would need to buy the front half of the cross G/U if you consider Sterling will rise against the Dollar. U/G would be a disaster.
You state you also plan to ‘Scalp’ the shorts? Really??? I thought the plan was a long term position. :20:
Admins: This ‘etoro’ pop up is splashing over everything! :23:
This is no disrespect intentended. But you may want to rethink your forex strategy. It seems that you are new enough that you don’t understand what 3 experienced traders are trying to tell you. You also don’t seem to understand that the currency pair you are interested in, doesn’t have to do anything. The “it has to” logic, sends a lot of traders to the forex traders grave yard. Posting your thoughts regarding the trade you want to take and why you want to take it, is definitely the right thing to do but it’s not enough, just to post your thoughts, you have to listen to the advice that’s given. You are looking for long term success, not built risking your account on 1 trade.
You may want to post what it is you’re trying to accomplish trading and what your circumstances are, so the more experience traders can point you in the right direction as to trading method and money management. From the sounds of your first post you may also want to learn a little about proper mindset Like I said no disrespect intended, just my observation.
Good Luck
Gp
Thanks guys your advice has made me think about my strategy and I’m going too tell my forex broker in the morning i wont be funding my account until i get some schooling done, What got me was if i don’t understand what you guys are saying too me it seems am light years away but am willing too learn, no disrespect taken from you guys I’m just happy too have had advice from someone experienced and learned.
So now my strategy has changed am going too baby pip school and try and learn and educate my self
Good Move. Now you’re cooking with peanut oil. :60: The best part is what over whelms you now and what looks like the impossible. . . with a couple months of study and practice you’ll be laughing to yourself saying I can’t believe I thought this was so hard to understand. Next thing to watch out for and remember " a little bit of knowledge can be very dangerous" A little bit of knowledge sends a lot to the grave yard as well. Study, practice, learn and post. There are lots of people here willing to help you.
Good Luck
Gp
Hmm, interesting idea anyway. So if I’m correct you believe that this pair will go down to around 1.5 from it’s current price. Looking at monthly chart for this pair I can see that the pair is in a side trend which started way back in 2009. With its lowest low of 1.3501 at 1.1.2009. and its highest high of 1.7042 at 1.8.2009.
RSI is above 50, and Stochastic is already in overbought level, and EMA (10,20) is giving BUY signal.
Now the price with this current terms could go high and bounce of 1.7000 level or bounce of EMA 200 which is around 1.67 at the moment.
But as these are only technical speculations they are not 100% correct (they may be 100% incorrect :D)…And as everybody already told you you’re risking way too much. Because if you are targeting around 1500 pips, then your risk should be in that 1:1 category.
Now given that your account is 25k, 15k loss is 60% of your account. Now when it comes to risk I’m all in IF YOU KNOW WHAT YOU ARE DOING! (caps lock on :D)
So the question is: “Do you know what you are doing?”
From your final post I see that you are totally new to Forex, therefore I wouldn’t suggest you such venture, unless you talked to the heads of Federal Reserves, and BoE and they told you their sneaky little plan.
Like I said no disrespect intended, just my observation.