kwanann wrote:
I firmly believe in playing pairs that you know well, there is no need to go and play all 25pairs, just stick to a few for starters. Most of you would have tried 10.x, i'm not sure how many of you were able to handle the sheer number of pairs and trades. I couldnt juggle everything and it became a terrible pain. Instead i found it better to just concentrate on the 3 most popular pairs EU, GU and UC, with the occasional obvious trades that appear in the other pairs.
For EU, GU and UC i trade w/o SL for the higher TF trends, and i WILL add in positions when i'm in DD as long as the higher TF trend is still being enforced. Of course these positions are added when it PA is moving back to the main trend and not away from it.
If i'm doing CT or for those pairs i'm not familiar with, SL is a MUST, and i will trade smaller lots as well.
I believe its similar to Bob's document previously where he ranked each of the pairs and their characteristics. Once he knew how those pairs move its easier for him to trade them and manage his expectations.
One example is GBPUSD vs GBPNZD. GBPUSD has a typical ADR of about 50 to 100pips. GBPNZD has a typical ADR of 100 to 200pips. Knowing this, i will trade HALF the lot size for GBPNZD vs GBPUSD.
Also it might be good to stick to just one TF and play that out, dumping a H4 or H1 analysis on a M15 can sometimes lead to MAJOR DD and you start wondering "what the h***". Of course confluence is good stuff, when ALL TF are in confluence it means you are pretty much covered and should have no problem leaving the trade as is for a while
Lastly even though you are earning green pips, one thing i always do AFTER i close my trades is to mark out my closing area and my target TP zone, and THEN see what PA does after that. It helps me to see what i have missed or got right? e.g i closed at the first push instead of the 3rd push, or i closed nicely at the peak. This really helped me with the chart vision and improved my sixth sense.
Excellent post Kwann! Very instructive, especially on the issue of stops and adding trades when in DD.
Trades differ widely one from the other for several reasons which include Quality of Entry, Higher TF Trends, General State of the Market etc. etc. It is good for one to take all these into consideration in setting a stop loss, if at all.
There are several occasions when I have carried significant DD, but closed the final trade having earned in the region of about 3 to 4 times what I would have made had the trade proceeded straight to TP in the first place. This definitely comes with the disadvantage that you remain tied to the pair in question and would have perhaps preferred to trade some other pair instead; but then, if you are in it, you are in it, and you might as well just make the best of it.
This is not, by any means, to say that you can just open a trade with a shoddy if not ridiculous entry and then sit back hoping that, one fine day, it will go into profit! It's really a question of balancing all operating forces as wisely as one can manage.
Perhaps much of this hinges primarily on the issue of trade monitoring. If you are not in a position to closely monitor your trades and cannot afford protracted screen sessions, then maybe you are better off with strict stop loss rules across the board. But you had also better have the honed and highly perfected skills of CJ, otherwise you will surely have course to mourn more frequently than you'd like.
The bottom line to all of this is practice, practice and more practice. No child learns to walk without taking a tumble over and over again. And then comes one day when they have learned all that the previous tumbles had to teach, and they begin to walk in safety.
When your stop gets hit, just take it as part of the learning curve; but be sure to look closely to see if there isn't something there for you to learn. |
