.........(3) Careful position management may also help whereas you don't let every trade run to -10 SL or +5 TP, but take action earlier on both sides (ie. close at less loss or gain in case you find PA is against your position). Nevertheless doing so too often may make it too discretionary and turn the expectancy of the system around.
Take a look at these three trades I took today.
Okay let's not discuss whether (today with US closed) they should have at all been taken on the first place. They all were according to the rules and also upon or before entry at the level, M15 or H1 retrace was broken and price continued its way in the daily direction. So I say PA-wise they were okay. Nevertheless as time passed by the net pip value of all three positions showed various amounts. There were serious negatives and some okay pluses.
In retrospect:
GU: I'd better not close and get 5 pips. Looking now when I closed GU it wasn't really weak it's just that I had three positions none of them really working!
EJ: It feels right closing as it may come to a full -10 loss now.
UC: I was thinking about closing at -4 or -5 to prevent a possible full -10 loss at the time of a fast up move, then it turns out waiting some payed off, even it may have been wrong to take it out -1.
(Discretionary) position management is hard stuff.... closing early may prevent you from a bigger loss but at the same time it means you leave less space for market to breathe. Early TP may give you some green pips instead of a BE or even some losses but at the same time may prevent you from gaining the full 5 pips putting less on the positive side of the pile.
When you are really good at feeling and 'predicting' the market, maybe then discretionary position management gets you benefits, however if you are good as said you will actually only take trades that get you to TP with high probability FIFO!
Many say in forex trading it is not the entry but the exit that is more important. Well... IMHO in case of a 5 pip scalping you gotta be very careful when do you enter.
Just a rainy day... Áron
Out sailing -> no PC, no mobile phone, just beers and sunsets... Studied EJ and GJ PA charts and (re-)read trading related books. flx69
