Hi all, I’ve been a long time lurker. So this is my first post. Decide to post this as this pair has been close to my heart as I’ve traded this on and off for the past couple of years.
I feel that this pair is a double edged sword, and very unpredictable. Couple of years ago, I blew my account because of this pair.
Not sure about other brokers, but I’m using oanda, and when the pair starts moving, the spread can go up to 200 pips, though usually it hovers from anything around 15 pips to 100 pips. If you trade this pair, you will need to look at the spread if your broker is using variable spread.
Because of this, it’s very difficult to put stop losses on the pair for me, as the spread can just increase and trigger it.
It’s true that if played properly, it’s very profitable, but I believe the Turkish govt will eventually move to stop the continuous devaluation of their currency, and it’ll probably be a black swan event.
For those thinking of carry trade for this pair on the short side, don’t think about it as from personal experience, I’ve also lost a significant amount from this.
You will need to reduce the lot size as the moves are very huge and you will have no time to react.
G’day PMH. I fear you might be putting the cart before the horse my friend.
There is a couple of fatal flaws here and it also makes me question your learning curve. First, this silly talk of pips. As you should be aware, one easy way to tell more “successful” (used loosely) speculators is we tend not to talk in terms of pips. A pip holds no value and is but a unit of measure. It’s value is measured against your account deposit currency and trade size. So, in my case (as at 12 noon GMT), an AUD account, 1 lot would currently yield $13:33 per pip on the EU vs $3.53 on the UT. In GBP terms that $8:14 vs $2:15. Either way, the end result is that a 100 pip move on the EU is the equivalent of almost 400 on the UT. Suddenly this volatile range isn’t quite so impressive.
Next, is the cost to trade. I rarely pay more than 3 points in spread/slippage on the EU. Adjusted against the UT that would be 12 points. Quick check of spreads indicates I could pay 8-10 pips in good liquid market conditions. However when liquidity starts to dry up it crept out to 25 pips and at 22:00 GMT that spread had blown out to 80 pips. Thats huge. 80 pips on the UT is approx 20 on the EU. Can’t remember the last time I had a 20 pip trade on the EU. This spread would easily trigger a stop order on a sell trade as well. Even if you used an 800 pip SL on your trade, my rules of thumb suggest at least 1 in 10 trades would be lost to spread alone.
And maybe the deadliest mistake of them all. The suggestion of past performance is indicative of future return. IT’S A S|E|X|Y PICTURE bro, but that’s all it is, a picture. Ask anyone who sold the EU on the 14/03/2015.
I’m going to suggest that after all this time you still haven’t found yourself as a trader. This post very much suggest system bouncing. And that’s no good. I love you to death bro and you have always inspired me here on this forum but I seriously think you need to take a step back, enjoy fatherhood for a while and discover yourself again as a trader again. Then come back all guns blazing and kick some serious a|s|s.
OMG, this is really unbelievable, it is difficult to know where to begin. So I will start by saying to new traders to stop listening to this nonsense it will cost you money. This Pipmehappy and Turbo have no clue about trading do not take their advice.
Two posters with high post counts so they give the new trader the impression that they are experienced and knowledgeable.
Then of course there are the blatantly demeaning and bullying posts of this turbo character. Where he makes it seem that his word is as good as taking gold to a bank. God forbid you disagree with him because that means there is something wrong with you. A look at his past posts reveals that he does not even trade forex.
Apply critical thinking to everything you read here, the majority of it is wrong, but find out why it is wrong and learn from the mistakes and misstatements.
New traders, indeed “discuss the obvious” that is where you will gain benefit from this forum is by open discussion. Not preaching and demeaning posts designed to satisfy ego problems from the real world.
So the combination of two long term posters gives the false impression of sound advice and even a tip that should be followed. Which if you followed that tip that last day or so would have resulted in significant losses. One lost his account and now is all demo, the other does not even trade forex. As a new trader you are better than both of them since you are honest about your skill level and are earnestly trying to learn.
So let’s try learning some things from this.
The word of the day is “hyperbolic”. The USD TRY has gone hyperbolic. I believe that when that happens the only thing for a trader to do is get out of the trade immediately. If I have profits, I bank them and then sit back and watch, if you are already watching then do not enter the trade. Perhaps this is some of that wisdom that even kids know that this turbo feels does not need to be discussed.
You may try and catch a dead-cat later but that has its own issues. Please post and ask about this if you are interested.
Another thing is learn about is the USD CNH. For myself, one of my trading rules is to never traded a pegged currency. A pegged currency is where the government sets the exchange rate or pegs it (like a clothes peg attaching two things) to another currency. The Chinese government sets the exchange rate to the USD, not the free market, and as such they can manipulate the exchange rate for political purposes.
The problem I have with trading these pairs is that a political event can occur with no warning to the public and a massive upheaval occur that can wipe out an account even if stop losses are in place. Stop losses can be missed of the price gaps in levels so that the order is never hit, then my entire account is at risk and that is not an acceptable way to trade.
For really new traders that is exactly the event that occurred two years ago. The Swiss Franc was pegged to the Euro. Then without warning of any kind the Swiss National Bank removed the peg and allowed the CHF to float freely. The upheaval in the markets was massive. Many traders lost their entire accounts and then owed even more money beyond their account balance. Many brokerage firms went bankrupt and even from those that survived there were long term financial consequences.
So when I say I do not trade a pegged currency, that is the rational underpinning I use for that decision. I think that is the larger and more overarching point to learn. That for everything I do in trading I have a rational underpinning as to why. I then need to regular examine and question those ideas to see if they still hold true, is there some new information, or was I just wrong and need to admit to myself that I was wrong.
I think this is one of the key differences between men and women in trading. Men will try to hold a wrong idea longer and give excuses. No data to back that up, just a personal opinion based on anecdotal evidence and admittedly filled with confirmation bias.
So in summary, I avoid hyperbolic patterns, I do not trade a peg, I question everything and find the underlying reasons.
Excellent post by the way, and i cannot help sharing but of course I never say hey I am an expert… Everyone trying trading must make up their mind… I never say ‘buy/sell’… I am glad that you posted your thoughts, thank you x
Well, in response to this so-interesting observation, I’m going to risk stirring the pot by adding a comment of my own (and I know PMH well enough to be confident that he, at least, won’t object to it) … :8:
I think that there [U]is[/U] actually data to back that up, and that it’s actually [I]more[/I] than just a personal opinion …
I remember reading something about this in [U]two[/U] of the many “trading psychology” books I read (one of them possibly by Brett Steenbarger, but no promises) when I spent a couple of months ploughing through them before abandoning this pursuit altogether as largely unsuitable and unhelpful to me (that’s a reflection only on my own mental state, rather than on the books!); but anyway, I think that as in some other areas of psychology research, it has actually been objectively demonstrated, in the trading context, that men tend, overall, to hold losing trades for longer than women, through being “less willing to be mistaken”.
I did wonder, from one of your earlier posts, the other day, whether I might have identified a “kindred spirit”.
Ps Lexy , you are spot on, and indeed my female traders thread is full of evidence of this split between male and female attitudes.
MissCroft, Lexy does not trade currencies either, so does that make her unworthy? Just because Turbo’s style of writing and trading does not match yours, you cannot just assume he is a clown, no-gooder, and egomaniac! I don’t understand this attitude to come on here and insult or belittle people you don’t even know. I know Turbo and you don’t, he is not yours to judge.
Having said that, your post was well written and had some good points, so let’s just bury the hatchet and be nice to each other.
At the risk of offending the majority of the forum I believe this is also one reason for the disproportionate rate of violence against women from male partners. A man’s deeply ingrained desire not to be wrong. I do know it is a far more complex issue with a vast array of dynamics but it does apply to the psychology of trading.
I need to examine within myself anytime there is fear since it will manifest as violence, or more generally, an emotional response rather than a rational one.
I think this is a key point in evolving as a trader is acknowledging the reality of a situation without fear or anxiety so that it can be reacted to as best as possible in the moment.
As a Buddhist I find that once I have placed my trade I give up on a desire for a specific outcome. I do not let the trade cause me anxiety or suffering. My stop loss or my take profit will be reached no matter what anxiety I put myself through. As a result I do not let my winners run, despite that being a strategy that is espoused by the vast majority of successful traders. I do not trade my peace of mind for a dream of the huge win.
A very personal way of looking at life and trading. I find trading is a great metaphor for many things in life. Certainly not a view that I would encourage for anyone else, but it is right for me so that I can trade without having a tantrum.
I think we have some similarities. I had a long term successful trader train me over many years (Dad). When I was young he gave me a choice, did I want a trust fund so I can sit around and spend my days shopping, or did I want to learn how to make my own money. It took me a while to take in that he was serious and it was an either or situation. A trade if you will.
He continued from there simply posing questions, a completely Socratic approach, so that I could discover for myself what was going on in the world of finance, stocks, commodities, currencies, bonds, politics, central banks, all of it.
We went through the indicators (MACD, ADX, SMA, EMA, Ichimoku, etc.) and I would trade with a small live account of $500. Then he would ask me questions, does it work, how do you know if it worked or not, why does it not work. It went on until I decided to either never use an indicator or had a system of indicators that worked.
We looked at the bars, candlesticks, Heiken Ashi, Renko, Kagi, etc and again came the questions so that I had to enunciate a clear coherent answer to him (and more importantly to myself) about why I was taking a specific action.
Always trading manually with a small dollar real account and suffering the losses along the way so that the impact of the losses could be felt. That my concepts about failing to please him in someway could be understood and put into perspective. That our love for one another was not contingent upon my knowing which way the GBP was going move. It may sound silly now, but these emotions all popped up at one time or another. But he had the patience and knowledge of a great teacher to allow me to experience all of trading.
He might ask me about Paul Tudor Jones’ quote “losers average losers” and ask if it was true. Then we would come back a month later and discuss the actual results (it is true, do not average down, the exception being a long term investment in an index fund with monthly contributions).
We also did a time of testing random trade entries, similar to the Tom Basso experiment, so that I could learn about the importance of exits rather than entries. I could go on and on, the reading and review of text books, the review of every Warren Buffet annual report, but all this is far too long to discuss here.
I really have gotten off track, back to the idea of risk aversion between men and women. An example from today. I took a long position in sugar early this morning. I do not trade commodities that often put it looked like that after a small pull back a trend was going to resume, on the other hand there is a good chance that it is entering a period of consolidation will range for a while. I adjusted my risk amount as a result. While I read about these fixed percentages being bandied about, I adjust my risk for every trade based on the statistical probability of my being correct. In this case I only risked 1/4 of 1%, or 0.0025 of my account. A number that is so small that I have never seen it mentioned on this board. I will raise my risk as high as 2% in theory, but that would be a rare event with exceptionally high probability.
Summary; once I place a trade I do not have emotions about it, had a teacher that questioned me on everything about trading, I adjust my risk based on the statistical confidence of the setup.
im quoting this post simply because its the only one worth quoting.
why? well i knew in advance what will come- a dozen people debating completely unrelated stuff starting from woman abuse and ending in their private life story. very much… how can i say it… “lol” (sorry thats the only thing that crossed my mind as suitable answare).
that is the true reason why forums do not work. forum is a waisted effort because there are guys like MissCroft who think their opinions are so overwhlmingly important that they drag the attention away from any trading to totally unrelated and unimportant stuff.
Anyways, since the display of racistic comments from this forum member in another thread already made me chose to ignore undeveloped charackters like this i am not interested to directly answare on the nonsense people like this are spreading.
but i am very happy to see that i have a fan boi. like a little dog you cant get rid off, who follows me to every thread i post one comment just to see if he can say something against it.
i feel the hate and i love it.
apropos teaching parents who teached their kids usefull stuff; heres what my mother teached me: simpathy is for free, jealloucy and hate must be earned.
so thank you MissCroft for letting me know that i live rent free in the deepest of your thoughts and mind. i hope you keep on thinking about me every day.
edit: @everyone who is reading: i hope you continue reading my posts (for whatever reason that might be, even if only to find something to brag about and hate me for) because then you might learn something aswell.