I am in on GBP/JPY and up about 40pips right now and moved S/L to +10 pips..Going to see what this might goto tonite....
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The GBP/JPY is extremely volatile. A 10 pip SL is very tight. Can go 10 pips either way in the blink of an eye. Being extremely conservative, yes we have a cross, but it's hugging that pivot point too much for my liking. Looks good on the 4 hour but going sideways on the daily. It's not what I would call a "cross with conviction". Let's see what happens after the retracement.
Glad I got out of that short GBPUSD trade. I'm in Asia so I was asleep during that interest rate announcement. Anyway I never trade the news.
Might be safer to wait until price breaks resistance at 234.80 and breaks the trend line. Note that the weekly is trending down. You can't just blindly take every cross.
Yeah I moved it to +10pips after my trade went 40pips +.. I am using the day chart now and trying to find a SL that works for me with out risking to much..That trade went up higher moved my SL to +20pips and went to sleep adn when I woke up it hit my SL, But thats ok I am fine as long as I am in the +++...
Yeah I moved it to +10pips after my trade went 40pips +.. I am using the day chart now and trying to find a SL that works for me with out risking to much..That trade went up higher moved my SL to +20pips and went to sleep adn when I woke up it hit my SL, But thats ok I am fine as long as I am in the +++...
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Not sure what you mean by adjusting SL to what you are willing to risk. You should adjust the lot size to stay within your risk not, I repeat not the SL. A good place for the SL on the daily is either at the low or high of the previous daily bar or if the previous bar is enormous then 70% of the daily range works well. It's a bit discretionary. Sometimes there's a clear resistance or support level to place the SL.
Money management is the key. My personal rule is that I won't expose myself to a loss that is more than 2% of my account. MM is the most important thing I have learnt about trading.
I'm sure you understand this but let me spell it out anyway. So let's say my account is 10,000 dollars. I want to go long GBPUSD which is 10 bucks a pip on one full lot size. Quick intraday trade on the 15 minute chart for maybe 20 or 30 pip profit. My trade determines I need a SL of 20. Possible loss is $200 if I get stopped out. That's 2% of my account - so I can buy one lot.
Now I'm on the daily chart. Bigger SL's apply. These trades need room to breath. I've worked out I need an SL of 100. Same risk of 2%. Possible loss if I got stopped out on one lot would be $1,000. Can only afford $200 loss which means I buy one fifth of a lot which is 2 mini lots. (0.2 lots) to keep within my 2% exposure. I could have 10 losses in a row and still have 80% of my account intact. Ignore this at your peril!!
So on the one hand you make less per pip on the daily charts for the same risk, but you are looking to harvest many more pips than you would on a 15 minute chart. That's why you don't just grab 20 pips on a daily chart and call it a day.
Money management is the key. My personal rule is that I won't expose myself to a loss that is more than 2% of my account. MM is the most important thing I have learnt about trading.
I really could not agree more with this statement. Personally I only risk 0.5%, but I am naturally very conservative in my trading. Many of my trades get stopped out for a profit by using a trailing stop. My winners on average earn about 1.2%.
I think MM is one of the biggest factors that separates the winners from the losers in the long term.
PeterM, your thread for beginners is by far the best information I have read relating to the forex market. I thank you sir for taking the time too put this together and share!!
PeterM, your thread for beginners is by far the best information I have read relating to the forex market. I thank you sir for taking the time too put this together and share!!
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thank you for your kind words, I hope you have some success with the strategy.
