ok, neurosis aside, getting back to my USDCHF trade,
I had somehow doubled the position size last week, probably
in a moment of overconfidence
price then went against me.
I don’t see a big problem at the moment, I am short, and price
hasn’t been able to above the present level since February,
and we are well above daily bands, and above weekly bands.
so price will cut through both daily and weekly bands for a good
profit, I am confident of that. but before swiissy makes a big
impulsive move on the daily, it is quite likely to consolidate
in a range for two months, - before it’s last big move down
and up, it was consolidating for ten weeks between June and
August, so it’s good to be informed.
the bands are moderately sloping up which I don’t see as being a
the swiss pairs are just slow, and I see no need to trade them,
faster moving pairs are preferred, so this will be my last CHF trade
and I will be doing well to close before Christmas!
KC mentioned identifying the best producing pairs, its a great
suggestion but much easier said than done
should I pick my most profitable pairs I’ve traded? No! because
the amount of profit was not determined by the pair’s characteristics
but more by my greed, fear, and often pure carelessness
In the future that would be the best criteria,
but for now, a good test would be to see how many set ups occur
on each pair. I will check that later
as a rule, I think yen aud cad gbp nzd feature well.
but I don’t want to be too restrictive
I’ve got a provisional business plan which I’ve implemented
as of today.
I think all open positions more or less conform apart from
swissy discussed above
If price is significantly above or below bands it is a set up
regardless of slope of bands and I will risk 0.1% as price
invariably cuts through even adversely sloping bands
no add ons as that can be very stressful when price turns
against you. - except limit order when price moves a very
long way from entry
where price is above or below on both daily and weekly
and there is a slight slope in your favour I will go 0.3% risk,
reason being, this is not a set up that will very easily
result in a loss, hence 3 x confidence.
where price is above or below on daily and weekly, and
there is a steep slope in your favour, as GBPJPY below,
I will go 0.5% risk, as these are the very strongest trades of all.
of course price can still jig about, but if its well above a strong
downward sloping bands, be sure price will cut down through
You could be selective and just trade these 'banker bets, but all
set ups win and all profits add up. so lot size i determined by
confidence, so that when there is big drawdown, I see the strong
slope and am not fazed.
similarly on adversely sloping bands, when I see drawdown
I just see how mimimal the potential loss would be even if
bands move against me, although, even with adversely
sloping bands, price usually cuts right through regardless.
Position sizing is far more to do with addressing psychological
factors that might cause me to otherwise panic, and close a
position before it had time to mature.
the screenshot below is named utopia, price is well under
steeply rising bands so I have traded the maximum 0.5%
risk lot size ( you could trade higher but I’m doing fine
keeping risk minimal )
for example, if it hits TP I will make 456.00 on one trade
alone, so my desired 1,000.00 amassed from dozens of trades,
could easily become 1,500.00 from just one extra trade.
the rationale is that these bands are not bollinger which respond
to volatility, so that even if price goes considerably against me,
that is the BEST case scenario, because price will hit a limit
order and I will make far more, as you can see in the screenshot.
but supposing price doesn’t return?
that would be an extremely relevant question on the lower time frames
but on daily, price and bands cannot simply diverge for very long, and steeply
climbing bands will not easily change course. price will return to mean
before that happens
that is the premise upon which this entire system is based upon
also I will add, that I have inserted missed weekly pivots for added confidence
Did you know? that weekly pivots are always hit? so if a set up is in the
direction of a missed weekly pivot you are theoretically guaranteed to win
although price might go thousands of pips against you in the meantime
so its good psychologically, as price is invariably drawn to weekly pivots,
but obviously you need the bands, and as you see below, the bounce off
supdem level, way under a steeply rising bands are what are really indicating
profits within two weeks or so.