Marc Walton on May 15, 2013 with no comments
Hi,
I explained on Sunday how you need to be flexible and that there were
multiple options for a trade on the Gbp/$. Had I stuck to my intended
goal of trading simply from daily charts I would have had a text book M2
short on this pair, but I also chose to long it on Monday morning. Why?Pierre went in to detail in the forum explaining why he felt this was a bad idea and he proved to be correct. In my defence I would point out that price was in a channel with a 300 pip average range and only needed a 50 pip stop, therefore 1:6 risk reward ratio AND my thinking was if that lost and price broke and fell below the trend line we had another potential 300 + pip move in the opposite direction, so another excellent risk reward ratio. Learn to concentrate on decent risk reward ratios and then it doesn’t matter about having a lower winning ratio.
I for example never take a trade if I believe there is less than a possible 1:2 risk reward. The odds are too low and therefore you need a very high win ratio to be profitable. I have a friend who only trades off daily charts with minimum 1:2 and preferably much more. He wins less than 50% of the time BUT is very successful.
On the subject of winning, daily M2 trades the Aud also worked almost to the pip after the break and close below 1.000. This was so logical (not a phrase I use that often when referring to forex)
but traders all over the world were watching parity, once it broke a pull back was to be expected.Other than that I continue to look for bigger pullbacks on the Yens and will not trade them if they do not. I don’t trade the Yens that often, Mary (Tradespotting) in the forum and some of the other more experienced members are better traders than me with all things Yen related, so drop by the forum if you want to learn how to trade them.
I continue to ignore the Euro and be very wary now re the potential short at 1.0250 on the Cad. I will only take that (half stake) form a daily candle close.
Regards, Marc
New members please note: If I am looking to take a trade long, at for example 1.6000 , I place my order 10 pips above & 10 pips below for a short. This is because price often does not quite reach a major line and you need to allow for spreads.
We are NOT a “tipping service” our aim is to teach you how to trade for yourself. For more up to the minute updates do not forget to drop by the forum
Pierre, Vassilis (Capsmart), Raa, Omar, Mary, and other experienced members will be available in the forum to give you a more up to the minute assessment & whether they see any potential trades lining up in the next few days. Many members tell me this is the best forex forum there is (no back biting & bitchiness, nor spam, that spoils most forums) and all members are happy to help new visitors. Its a great resource, USE IT: Forex Forum