EUR/GBP Trading Room

Dedicated to traders whom like watching paint dry. The < eur/gbp >

Now here is a pair I am comfortable with starting on my quest to be a more Longer Term Trader! This pair gives a Trader time too REALLY Think.

Latest 4 hour chart....Possible short set-up in the making ??????

Let me SLEEP on it !!

Fxj

BTW....That purple-ish line is the 200sma


UPDATE: As of 1210am edt, 09/11/2007....still flat....no short signal triggered
Trading .68055/.68065

EG is the perfect pair for a range system. I have been using a system I 've been working on for a year and a half. It has returned a little over 100% from Aug 2006 to Aug 2007. This pair may seem like paint drying, but boring trading can be very profitable. I can post the stats if anyone cares to see them.

Hey Sam,

I'd be interested in the range method you use...stats and all. I've always looked at this pair....never traded it. It is going to be my foray into Long Term Position Trading!
After days on end scalping and day trading....I could use a bit of watching paint dry. Whole point of the thread!!

Here are the stats, I am reluctant to post the method publicly, because it apparently exploits an inefficency that has not been widely noticed.

My post was not to share a method, but to discuss EG and the fact that a slow steady approach can be very profitable.

I think longer term and no scalping and no wierd MM like martingale or any other negative recursion methods of MM. Just old fashioned trading of a perceived edge.

The thing I love about EG is that it is so stable. I can look at it maybe every other day and that is more than enough. If something is about to happen, the pair telegraphs the move like a rookie boxer, long before any action is necessary... EG is one of my favorite pairs. I have used this approach on other currencies such as GU and chf, with adequate results, but EG is the star of the show for ranging methods.

did somebody say boxer?

i worked on somethin in the past that identifies turning points with this pair at very high accuracy. never really tested it for too long and eventually just dropped the idea but i might start lookin into it soon

For those that aren't familiar with the EURGBP you should know that it's worth just over $20/pip so don't let the stability fool you!

I meant stability in the sense of ranging motion, because of the correlation of the Euro and the Pound.

But you are correct, there is lots of opportunity in it.

Real nice Scott(or is it Sam now?? ), but do yourself a favor and don't share the inefficiency if it is indeed that. Not in public at the least. Just keep making the $$

Good reminder for those that may not be familiar with this pair.

My suggestion would be that those traders not comfortable with the approx. $20/per pip, would be to adjust their normal lot size accordingly.

An Example: If a trader normally trades 3 lots on the eur/usd or 3 lots on the gbp/usd....maybe consider trading 1.5 lots with the eur/gbp.

Something else to give thought too might be "Margin Used"...Many brokers are different, so best to check with your own.

A sample from Oanda ( 50:1 ) works out as follows: as of 6:00pm edt on 9/11/07

150k eur/gbp = $4152 approx
300k eur/usd = $8304 approx
300k gbp/usd = $12,199 approx

Fxj

FXJ, that's a great point. To limit your risk to X% you would have to trade 1/2 of what you would normally trade for a pair like the GBPUSD or EURUSD. Thanks for pointing that out.

I ran your margin numbers my FX calculator that I have and got the exact same thing as you.

It really is not much of an issue for me, because I define percent risked as

Lots = Account Equity * Percent risk / Stoploss / Pip Value.

So regardless of the value of a pip the amount risked is always the correct percent of my equity.

Well, the secret is out now! What % risk do you use? I'm a 3% kind of guy.

LOL, I am a big spender at 2% per trade and usually 10% total trades

Slight change in thought from an earlier post...

While I have, to a small degree, taken long term trades in the past, ALL have been based soley on T/A and I was rather quick on the trigger with taking profits and scaling OUT of the position. ie...I went long last year usd/jpy around the 110.00 ( I entered on a very short term time frame ) area and was stopped out around 123.75 on a TS. It's posted somewhere on FF.

Yeah, that sounds GREAT!!! BUT! By the time it was finally over....along the way, I had been stopped out on several wild market swings and re-entered....so was it really a long term trade?....Was I repositioning? Was I following the trend? Did I adhere to my plan? or was I adapting to market changes? Did I follow F/A news to evaluate? Did I work the trade? Did I give the "relationship" room to breathe?? Lots of Q?'s.....many I probably can't think of right now. When it all finally ended, @ 123.75....the relationship was so withered and scrawny....it wasn't even worth the time. When the Market did reverse from just over the 124 mark....I was stopped. Another thought......I did not place my TS stop in some GREAT location, I think I pushed it so close to Spot in the hopes I'd get knocked out for good. I was drained. I wanted to move on....maybe the market as a whole did also???

Only one thing I know for sure....I NEVER Married the Trade, oh....., we got cozy and comfortable, a few rough patches, I even walked out a few times, though I left things at the HOUSE ( a few minor/small positions -I was never FLAT this pair until 123.75 TS - though nothing I'd miss if the relationship had ended )... maybe we even had a serious commitment. But no marriage nor proposal either. Do I have commitment phobes??? Some women would answer YES!!!!!!

My target was > +121.00....and I was collecting some nice interest....yet, did I ride the ups and downs without scalping abit along the way?? oh,....I know in my heart this ole' rabbit chaser did!!

So Let's see if an old dog can EASE into a relationship slowly, maybe develop one, before needing "additional confirmation" i.e. Technicals.

In my thought process...the market is a women. I, the trader, am a man. The market wants to be courted ( traded ) and I want to trade her!!!

Going to find out if I can build this relationship up and see it to the end.....
Starting with the FA ( based on some sound advice from a few member posts and News analysis found right here at FF. BABY STEPS....not too fast or I'll freak and run.
Here is the Chart....Trade will be/is with Oanda
Position : Short
STOP : None ... Hey I want to build something here, not let her know I'm going to leave if she doesn't meet my expectations quicky, in fact....I shouldn't have expectations of her, I am here to see if we are compatible!! That's why slow and easy. She won't get too deep into my pockets to soon. Nor will I push her either.
Entry: Multiple...work in progress. I'm sure the multiple entries will stop once we get married!!!
Target...the 200 Daily sma for starters, below that...we may have a longer term relationship.

Communication is key in a relationship....so eur/gbp and I will make sure to talk daily and give each other our space.

Yeah, I know....It's not like I'm trying to woo the GBP/JPY

As of this writing, 2 dates so far..
1st / coffee only....seems I'm picking up the tab so far.....
2nd / a burger and beer over lunch....

Fxj

P.S...The yellow vertical line is the START DATE....NOT an entry signal

Murphy's Law.....Post something and it will come back to bite you.

Seems eur/gbp is kicking up her heels, and I am not the one pushing this relationship along.
Even before our scheduled ''next meeting'', I have found myself a bit more invovled.

Two (2) more sell limits have been triggered. The monthly desending TL broken.

Maybe a 2 day "breakout" fling would have been better for me?!?

Attaching an updated chart....cleaned this up a bit.
Will just let the charts speak.

When building a relationship, something can be said for "hedging" your bets!

Fxj

The only time I look at this pair is when I need to move money to France.

But, after the comments here I thought I'd take a look as well.

Nothing fancy, expecting it to come back towards its normal mid-6700s I've a sell stop just below the hourly lows.

Now why couldn't I have been a Normal guy and have had my first date on a Friday??

Appears my chosen "euro lass" has become a bit more "Les Jeunes Filles" as she becomes a bit needy, and testy as she is "undermined" by some current issuses.

Slow and steady she is not this week...which of course implies Murphy's Law...just not sure which one! There are so damned many.

Though she is testing me, as most will in the early beginnings of a relationship, I was prepared for this.

Even as she tests and fills yet another of my limits, (.6902) I congratulate myself for having the foresight for not jumping into this endeavor blindly and with both feet.

Is she just being a bit fiesty, as she has had a tendency too do from time to time, or will she test my resolve a bit too far? Jury is still out...at least she is leaving small tips at the end of the day. I still have more rope to give her.

Posting a 1 hour chart to view my positions as of Sept 14, 2007

I left my T/A indicators on this chart....remember, I am thinking Longer term Fundies...not a smooth ride....had I been trading T/A....I'd have been long.

The reason I chose Oanda for this little exercise is due too the position sizing available. As I "hinted" at in an earlier post, I have hedged my bet....though not with same position sizes, as my 2nd broker does not allow these sizes.

I do not think the hedge has any real relavence to this trade, as I think I would hedge future long term positions, as I scaled in, until LT trade was up and running in my favor. This has not required much of my time.

Wanting to keep this transparent....
Fxj