The gbp/nzd, doesnt seem to want to play ball!
Nzd weakness is holding the gbp high in this case.
I think in the near future this may be quite a messy pair and is probably worth avoiding for a while.
In light of the gbp/nzd position, I would like to explain why despite this position closing at a loss that it was not a bad trade.
I know what your thinking, ‘yeah right, nice try!’ or 'ok, well he’s finally lost it! lol
However, please bear with me.
A trade that closes down is not necessarily a bad trade because no trade is 100% certain. If your system correctly calculates the risk and then the trade closes at a loss, then this is not a bad trade. It is just say 1 trade out of 10 that will inevitably close at a loss for whatever reason.
I think of these trades as ‘the price of entry’ and by that I mean that they are the cost of trading in general and actually making money.
For example if your system has about a 80% hit rate then there are obviously going to have losing trades. Now you could try and engineer these trades out, but that could actually be detrimental overall.
‘That makes no sense!’, I hear you cry.
But think of it this way. If by making your hit rate higher you reduce the number of successful trades overall then it will be a false economy. IE. You could have a system with a 80% hit rate that has 10 trades, 8 of which close in profit and 2 or which close at a loss, so basically 6 clear profitable positions overall.
OR
You could have a system with a higher hit rate but that is triggered less often as a result and therefore only gets 6 trades in total and has 1 of those 6 close at a loss, so basically 5 clear profitable positions.
So, you see that the second system that appears to be better at first glance, is actually not as good as the first system with a slightly lower hit rate, but higher turn over.
Now changes in leverage etc can also change overall profit but what I’m trying to make clear is that, a losing trade is not bad if its within the expected parameters of your system.
Make sense?
Thanks for the ‘like’ mbdav!
Hows your trading journey going?
Good chap, other than following you I have some plans to make some Euro - related trades towards the end of the week or start of next (we potentially got some big market news ahead pretty much every day this week), should at least be dropping against USD anyway
Yeah, it is quite a heavy news week.
I think your right about the euro, its showing little sign of wanting to retrace higher before dropping again, which leads me to believe the longer term down trend is pretty strong.
It’s the pound weakness that I would like to see more commitment towards. All the other pairs seem decided but the pound is a little less sure.
Its funny really, that it’s the dull, boring times like these that make a good trader.
Again, its a bit counter intuitive but the times when a trader has to sit and wait are arguably much more important than the times when he has lots of trades.
When there are lots of trades open its because the system is working at full capacity there should be minimal built in risk. [like mentioned earlier]
However, when the trader has few or no positions open and he is aware of this, less experienced traders try and force trades or find them where they’re not. But in this pursuit of profit, he will actually lose money.
Again, its all a false economy.
Sometimes not trading makes money! 
I think it is never easy to trade money! How is your zulutrade account going on?
Hi Eddymo,
Once you have a system you trust there’s no difference between trading a demo or live account but the key is that you trust it 100%
It MUST be proven, long term before you put live funds behind it.
My zulu is fine thanks, pretty slow at the moment for all the reasons mentioned previously, but that’s the markets for you, every year or so there is a period like this.
Looking forward to my orders being triggered and getting involved in some proper trading again, but until then, there’s no point in trying to grab pips before hand.
Who are you following on zulu at the moment?
I have seen a lot of the top guys have either taken a break or have been/ are on the wrong side of the euro at the moment.
Keep an eye out for the euro news tomorrow at 10:00am, it could really move the market.
Morning all.
Remember the euro news at 10am.
ps.
The aud/jpy order looks like it might trigger today.
Ok, so the euro news was generally as expected.
The rest of the day should be pretty calm with regards to news.
Anyone looking for a trade might want to consider shorting the gbp/chf down past 1.4980.
Happy trading!
SSI: EUR/USD Positioning Ebbs but Truly Directionless before ECB, NFPs
So, anyone expecting a shock euro announcement on Thursday?
Personally, I think whatever’s said the euro will fall.
Morning all.
The aud news in the night was positive and in turn the aud has strengthened, triggering aud/jpy order.
Happy trading.
Euro gbp @ 10am guys.
Quick question - why such large stops/tp’s now? Technically I should be redoing my money management as with those stops its risking >5% of account per trade?
Hi Mbdav,
Its because they are the first trade on the reversal and might be a bit unsure. As I pyramid into them the stops will get smaller.
I may also reduce the size anyway, depending on what the price action is like before hand.
Its basically just a safety measure at the moment.
Understood, thanks
Ive only just noticed your ‘location’, ‘land of lazers, ninjas and gold’.
I like it! lol.