Auslanco - GBP/JPY and GBP/USD (newstrade)

u took my advice? Did it work, if ure in profit, watch out for a reversal, DOW may shake it off soon

2008.04.24 15:01:15 US Mar New Home Sales -8.5% To 526,000 ; Consensus 579,000

Horrible housing data.

lowest in 17 Y

G/J is expected to go 213-215 area ..hmmm..but before that it should retrace to 200-202 area for sure..IMO i'm writing this many times...

Yep but Market is fixated on better employment data

seems to me that this 205.30 - 40 is not an easy barrier to pass. If the housing news is bad, I believe we will head down. We may see a very bearish Friday.

My M15 and daily analysis:

I didn't use a stop loss but my finger was on the buy button

Does anyone know of a good Dow chart, preferably free online? Oanda don't Dow.

I found this but was hoping for something better.

http://www.livecharts.co.uk/MarketCharts/dow.php

GBP/CHF heading North to AK =)

Basically agree

I beleive Q had mentioned that we are going to challenge 205.40 area and then head on down. When he speaks we listen

Take a look at this link. Interesting Yen Cross analysis, including GJ by Jamie Saettele ...

http://www.dailyfx.com/story/currenc...885529644.html

mmmm thank you very useful info.

The same thing is been mentioned on this thread a week ago by me and Q..
(they must be reading this thread.. LOL )

If you click next, you can also see the GBP crosses.
http://www.dailyfx.com/story/currenc...977156109.html

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Wow!, you guys have loads of cash to waste, what I could do with 10% of that.

Seriously, if you have followed this thread , one theme has been consistently played throughout:
A: Use stop losses
B: No system is perfect.

Speaking of perfect, If I was to say, (just saying), to persons that there was a 90% possibility of price going to the daily sma low price and then turning back to go to the sma close, I guarantee you that if 10 people followed such a "call" , some would get stopped out, others would get 1 pip, and still others would bring home the bacon. Why? Because a significant amount of trading strategy is related to the psychological aspect and the other major pillar, to price action, "within the framework of your strategy".

That's why someone can give away a trading system that works , say, 80% of the time, and you will still have people losing, because of "nerves" or the opposite, being in unholy marriage to a losing position.

Forex trading is a numbers game, and exponential numbers at that. What that means is that we can think in terms of fractions, not multiples when setting up our money management system. Which is to say that I am sure that you are probably attempting to get 100% return on your equity within a couple of trades. DO NOT DO THAT, as they say, make haste slowly.

Now check this out, using 5% account risk and an average stop loss of 70 pips and a take profit of 80 pips, your account will be quadrupled, by making just 30 trades (approx 1.5 months, approx 1 trade/day).

10% real monthly return on equity is therefore possible after only after 2 correct trades in 2 days for the whole month, with a reasonable 5% account risk per trade. The point is, if you have the capital, as you clearly do, you don’t need to overtrade. You only need 4 correct trades per month to do 20% return on investment = very well. So you can afford to wait and pick the most obvious trades. On that note, it is rare that the general consensus on this thread is, say, bullish and price action is actually bearish. Watch out when you have several contending views among the "seniors"

On the flip side, it would take 15 consecutively wrong trades to wipe out 50% of your equity. Risk held constant at 5%.

Risk held constant means that if you make a profit you should raise your lot size to reflect 5% of your account, and if you make a loss, you lower your lot size to reflect 5% risk (stop loss) of your account.

From the above therefore, the absolute maximum risk exposure(and this is for experienced traders) should never exceed 10% of your account. At this risk level you could lose 50% equity if you made 7 wrong trades back to back.

With 5% risk level, you would have to be wrong 15 times consecutively to lose 50% of your equity. At 2%, 38 loss trades back to back! Based on the above figures, and given a sound trading strategy, a reasonable ratio, is somewhere between 2% and 5%.


There is no substitute for chart time, you've simply got to spend time with your charts, eventually you will start to see candlestick patterns that repeat, and can be traded profitably. Pay keen attention to the different sessions and when volatility usually occurs. If you were to follow Auslanco's 15 min trading strategy in late Tokyo (5:00GMT) and the European SESSION only, I simply can't see how you could not be successful.

I have created a spreadsheet that will calculate lot sizes based on initial investment and stop loss levels and risk profile. Sheet2 of that spreadsheet gives the flip side calculation, in terms of how many consecutive losses you would have to make to lose 50% of your equity.

very choppy market today. Hard to trade even on M5 time frame. I only made a 60 pips today.

Thanks very much for your clear thoughts, spreadsheet and the time you have taken to put this together. I know its going to help me and others.

Excellent piece of work GodfreyH. it will surely help to manage my trade better.