Jemook wrote:Update on the basket I opened on Friday:
At Fridays close the basket was +250 pips and is now -100 pips. I'm going to let this run as I'd like to get a feel for letting a basket run to complete TP or complete stop. However if this was on a live account I'd shut it here and take a small hit so I don't risk a full stop out.
If you see a basket moving against you then you should re-assess if it's a good one to keep open. If your long pairs are breaking down under the daily pivot this is a good sign to get out and look for a re-entry again later. Opposite for short pairs. Today all my open pairs opened on the wrong side of the daily pivot which means watch out!
It's very important to cut your losses quick smart.
Just wanted to requote myself here. I can't stress enough how important it is to
not be afraid to close basket that shows signs of weakness. You need to be able to judge the market and be a smart 10.2 trader for this!! Everything works in tandem and you will see sure-fire signs that a basket is turning to shit on all the pairs. Here are some example warnings.
Sign #1: Almost all of our basket pairs have weakened the .8 threshold. Everything moves in tandem. I'm not 100% sure yet but when everything goes off the .8 threshold this might indicate a reversal of currency strength.
Sign #2: Monday open on the wrong side of the daily pivot and didn't really break above on
most pairs.
Sign #3: H1 Currency Slope Strength were showing diverging lines and strength in the wrong places.
Sign #4: Pairs such as the AUDUSD bounced off the Monthly Resistance 1.
I had plenty of opportunities to shut my basket today for a small loss but I didn't and now it's looking like a full stopout on this one. I still need to work out the best money mangement policy for this strategy. Should I TP when I see some? Or should I wait for a full TP/full SL? For now the only answer I have is the charts tell a story and you need to be able to read it. If you want to know how to read it study 10.2 & 10.2a!
