Chart and trades summary. *Correction to chart analysis: Target was "S1" vs R1. Correction: "(PDT)" should be "(PST)."
To clarify what I meant by a high risk trade. I made the trade on my regular account vs. the new small account because my regular account is so much bigger. In the event that price reversed while I was at my meeting, I wouldn't get hurt much vs. the new smaller account which doesn't have much money in it. Overall I felt I was pretty safe about the decision not to put on a stop loss anyway. Market momentum was very slow, not many players in the game at that time of day. If there had been a retracement or pullback, I didn't think it would be much for the reason that the overall direction was still down.
Re: Stop losses. The experts say you should always have a stop loss in place. Sure, you'll cut your losses short that way. On the other hand, a stop loss can nickel and dime you to death as price stair steps up a bit and then drops back to the stop loss and takes you out. Happens all the time. Knowing a move will likely drop back several times before it finally takes off in the direction of my target, is the reason why I don't place a stop loss initially. Put another way, each time I'm stopped out and get back in, I'm out the spread all over again. Dealer spread on the GBPJPY is nine pips. I can quickly rack up 36 pips in spread money before I've made a dime.
Because I don't place a stop loss initially, I have to be very careful about the trade I pick (what's wrong with that?). In other words, I have to make sure that I've found the highest probability, risk/reward setup: Trending Momentum with a 100+ pips opportunity from a floor to a ceiling (or vice versa), ideally between pivot points. Then, after the trade has moved twenty or thirty pips in my favor, I place my first (and usually last) stop loss at breakeven entry. I may still get stopped if price drops back to the entry, but I haven't lost anything.
The experts say that the reason my stop losses get stopped out is that they are too tight, i.e., too close to my entry. Right, I know. The experts say that I need to have a fifty or seventy-five pip stop loss in the event of pullback or retracement. Been there and done that. Problem is, I don't enjoy watching a trade going fifty or seventy-five pips against me, plus the spread. Again, how I get around having to do that is to pick my trades very, very carefully, i.e., the highest probability that my trade is going to take off with momentum and head for the target without dropping back. There isn't any guarantee, but the above strategy at least minimizes the possibility.
To clarify what I meant by a high risk trade. I made the trade on my regular account vs. the new small account because my regular account is so much bigger. In the event that price reversed while I was at my meeting, I wouldn't get hurt much vs. the new smaller account which doesn't have much money in it. Overall I felt I was pretty safe about the decision not to put on a stop loss anyway. Market momentum was very slow, not many players in the game at that time of day. If there had been a retracement or pullback, I didn't think it would be much for the reason that the overall direction was still down.
Re: Stop losses. The experts say you should always have a stop loss in place. Sure, you'll cut your losses short that way. On the other hand, a stop loss can nickel and dime you to death as price stair steps up a bit and then drops back to the stop loss and takes you out. Happens all the time. Knowing a move will likely drop back several times before it finally takes off in the direction of my target, is the reason why I don't place a stop loss initially. Put another way, each time I'm stopped out and get back in, I'm out the spread all over again. Dealer spread on the GBPJPY is nine pips. I can quickly rack up 36 pips in spread money before I've made a dime.
Because I don't place a stop loss initially, I have to be very careful about the trade I pick (what's wrong with that?). In other words, I have to make sure that I've found the highest probability, risk/reward setup: Trending Momentum with a 100+ pips opportunity from a floor to a ceiling (or vice versa), ideally between pivot points. Then, after the trade has moved twenty or thirty pips in my favor, I place my first (and usually last) stop loss at breakeven entry. I may still get stopped if price drops back to the entry, but I haven't lost anything.
The experts say that the reason my stop losses get stopped out is that they are too tight, i.e., too close to my entry. Right, I know. The experts say that I need to have a fifty or seventy-five pip stop loss in the event of pullback or retracement. Been there and done that. Problem is, I don't enjoy watching a trade going fifty or seventy-five pips against me, plus the spread. Again, how I get around having to do that is to pick my trades very, very carefully, i.e., the highest probability that my trade is going to take off with momentum and head for the target without dropping back. There isn't any guarantee, but the above strategy at least minimizes the possibility.
Attached Image(s) (click to enlarge)
