DislikedI'm demo trading at the moment, trying to slowly work my way through this thread and cement to memory everything as I learn. So apologies if these questions have already been answered before along the way. Choosing the right pair. Trade one pair exclusivelySince I am new I was going to choose just one pair and trade that exclusively until I can learn its 'rhythm' and it's 'pulse' - then once in sync with that pair branch out to others. I was interested in Leighs choice of EUR/JPY because she said that often it gives moves big enough to capitalise...Ignored
hey Nomadic,
Regarding your question about potentially buying at the top of a trend. If you had entered the market with your scout then position size is insignificant. Only after the market begins to move in your favour would you being to scale into the position for your attack. Only when you being to attack does your exposure and risk begin to increase. So you must be careful and well timed when you decide to attack.
So if you had bought at the top of a major uptrend you would notice the top occur on the 5m chart first and trend on the 5m time frame change. Hopefully you had not attacked into the move and so If you were holding your scout at this point you would simply kill it off and try to setup for a new position.
If you had began to increase your exposure and scale into the position and get caught then you have 3 options available to you. Either to Kill the position and take the loss, attempt to rescue the position or flip into the new direction.
If you believe the position is still favourable you may attempt to rescue it. So the only way to improve the cost of the position is to snowball into it. NEVER snowball into a position against the trend. If you had noticed the 5m trend change and are caught with some exposure, then you will need to look to the 15m, 30m , hour charts to find where the trend is still in tact and be patient for the move to finish and give opportunities for you to re average the position. If you choose to undertake in these activities It is life and death, it is war, and so you must treat it as such, you can not fail.! Do not be careless with rescue attempts.!
This is why it is so important to start with a very small position, as the snowball builds very quickly. The smaller the initial position the more room you have for rescue should things go wrong. When you are just starting you should take a simple skew, 1,1,1 or maybe 1,1,2. Practice it. Both rescue and attack. Start very very small. You make money from your strong attacks.
Remember the MM is only a tool. It can be used both to your advantage and disadvantage. Your ability to follow price action and stay with the flow of the market is critical. This is a skill that you develop with experience and practice. The better you become at this the more it will serve you. For those times you go wrong and get misfooted from the flow the MM allows you to readjust.
Hope this helps.
