Pips in wheelbarrow - Trading FX profitably
- Thread starter Galts Gulch
- Start date
GG, You are doing well as you are. Continue the same way. As you have asked - Do post something of your good and bad experiences, learnings and insights, your story as a trader, best and worst trades, trading psychology, emotions and how you manage them....
Question :
* Since you trade on 4H TF, how do you decide your SL?
* If you take for example 10 trades, how many would be failures? (You have explained your Win/Loss ratio, but this got missed.)
* When do you exit a profitable trade?
* What is your exit strategy when you trade multiple lots? Are all exit at once, or you reduce your positions?
* How do you manage a spike against your position in a smaller TF, while the main trend is in your favor. Have seen this happen many times trading Gold and Silver. Does the same apply to currencies as well?
* What is the average holding period of your trade?
* Do you carry positions overnight? If so, how do you manage gaps?
* Usually it is said, never let a profit turn into a loss. May well be true. But counter moves come in fast and furious, and after stops are run, the trend resumes. How do you manage that? Should SL be based on : Indicators alone, logical levels, comfortable SL, based on % of capital?
Have asked too many questions. Thanks for your time.
Question :
* Since you trade on 4H TF, how do you decide your SL?
* If you take for example 10 trades, how many would be failures? (You have explained your Win/Loss ratio, but this got missed.)
* When do you exit a profitable trade?
* What is your exit strategy when you trade multiple lots? Are all exit at once, or you reduce your positions?
* How do you manage a spike against your position in a smaller TF, while the main trend is in your favor. Have seen this happen many times trading Gold and Silver. Does the same apply to currencies as well?
* What is the average holding period of your trade?
* Do you carry positions overnight? If so, how do you manage gaps?
* Usually it is said, never let a profit turn into a loss. May well be true. But counter moves come in fast and furious, and after stops are run, the trend resumes. How do you manage that? Should SL be based on : Indicators alone, logical levels, comfortable SL, based on % of capital?
Have asked too many questions. Thanks for your time.
SL is not a Static Number ... Nor one should be adamant and rigid about it. Nearest SL will keep getting hit and there is no fun in having 250 Pips SL either ... One should consider if it is trending market or range bound, TF, the reasons behind the entry, ROI expectation on that Trade etc to arrive @ SL zone ... If I'm trading D or 4H TF, I will have wider SL, the H/L of the Previous swing ... This way I'm making sure that my SL does not hit easily and also I'm giving the market and The Trade, sufficient time and breathing space to come my way ... But if I'm trading 1H TF / Scalping, I always have 15 Pip hard SL ... and if I'm sitting through a trade and realize that I have done a mistake, I kill those trade/s immediately for small loss and analyze at the next candle for my next move. These are my Foundation SL strategy, but I do take deviations, depending on the Market. There have been instances where in I killed my trade for 2 Pip also.
It is tough to give win / lose % for 10 trades ... My previous 22 trades are either winners or running in profit till now. Before that I had consecutive 5 loses. That is why I spoke about win / lose % for 100 trades. I normally have 75 - 80% success ratio. But when I lose at all, as I do not do martingale trading, my loses are small. But profits (in USD) are high because of the Scaling In Strategy that I always use in for all my Winning trades.
Exit strategy again should not be fixed. Once my trade/s hit 50% of the expected profit, I activate 6 - 9 pips TSL. But, if I have taken a trade on 4H TF, say after Euro / London Open) and D Tf confirms with the same trend, as soon as my trade hits 25 - 28 pips profit, I start adding positions and moving my SL for my first trade. This way, I'm reducing the risk, but increasing the ROI of the trade.
As far as exiting Multiple trades, as I did mention earlier, they are all taken at different values and to enter new trade/s, I will either move my SL of previous trade/s or activate TSL for previous trade/s. But, if all trades are running in profit and TDI Green starts turning / tweaking, I will either kill the trades or tighten the TSL value.
In FX, spikes happen largely due to an important / high volatile NEWS coming in. As you rightly observed all Spikes hurt trades taken in shorter TF. I do not trade on shorter TF's when I know that a NEWS is due in next maximum 4 hours, as 4 hours is the maximum time I can give a 1H TF trade to run. If a 1H trade does not come to profit in less than 4 hours, either market is ranging, or entry rules are wrong. Either the way, I kill the trades for a loss and Move On. And Spikes never hurt higher TF trades and I do not worry about them. And yes, Spikes happen Big and High in Currency market.
I hold all my 1H TF trades for maximum 4 hours, for the same reason I explained in the previous point. But, my higher TF's run anywhere between 18 hours to 2 days. Because if a Trade is reversing from a historical S/R zone, it will take time to get in to profit. This is the reason, patience is a Virtue for a Pro trader ... "Do not trade because of a Live account ... Trade because of a Trade-able set up, because you have more chances of winning than losing" ... There will be days, when my terminal will not have any trade at all and there will be times, when I will have 18 - 22 open positions, but with minimum 12 -16 of them in profit. If, my previous 5 trades are yet to come to profit, I normally will not take 6th trade. I do not try to judge the market ... I swim with the market ...
I, not only carry positions over night, I carry them over in week ends also. Not as a rule though. Only if conditions are right. For example, now I have EU and GU long positions open in the week end as THEY ARE OVER SOLD ON 4H, D AND W TF'S. They are due for some sort of reversal / pull back / retracements of minimum 150 - 225 pips. Will post my next week's "Weekly trading Plan" in next couple of hours. FX market does not have daily gaps, only weekly. And if the trades are taken on higher TF's (People might be getting mad at me for for my regularity of using higher TF's ... cn't help though, that is where money bag ... wheelbarrow of pips ... is and even those gaps will not hurt.
Counter moves are always Fast and Furious. I do not trade pull backs (20 - 30 pips kind of pull backs), neither in shorter TF's or in higher TF's ... That way, I'm safe from counter moves ... Befriend the Trend and treat the counter as neighbor is my Mantra. And as I said earlier, I always activate the TSL soon after the trade hits 25 - 30 pips profit ... to protect the pips in the barrow.
And YES ... SL should be based on all the parameters of Indicators, historical S/R levels, any important NEWS coming in, equity size and more importantly Psyche of the trade ....
Hope I answered all your questions to the best of my abilities.
Pour in, if you have any more. I appreciate questions more than the Thanks button .... Questions increase / rehash my knowledge as well ....
"Trading is more about The Psyche of the trader than anything else"
It is tough to give win / lose % for 10 trades ... My previous 22 trades are either winners or running in profit till now. Before that I had consecutive 5 loses. That is why I spoke about win / lose % for 100 trades. I normally have 75 - 80% success ratio. But when I lose at all, as I do not do martingale trading, my loses are small. But profits (in USD) are high because of the Scaling In Strategy that I always use in for all my Winning trades.
Exit strategy again should not be fixed. Once my trade/s hit 50% of the expected profit, I activate 6 - 9 pips TSL. But, if I have taken a trade on 4H TF, say after Euro / London Open) and D Tf confirms with the same trend, as soon as my trade hits 25 - 28 pips profit, I start adding positions and moving my SL for my first trade. This way, I'm reducing the risk, but increasing the ROI of the trade.
As far as exiting Multiple trades, as I did mention earlier, they are all taken at different values and to enter new trade/s, I will either move my SL of previous trade/s or activate TSL for previous trade/s. But, if all trades are running in profit and TDI Green starts turning / tweaking, I will either kill the trades or tighten the TSL value.
In FX, spikes happen largely due to an important / high volatile NEWS coming in. As you rightly observed all Spikes hurt trades taken in shorter TF. I do not trade on shorter TF's when I know that a NEWS is due in next maximum 4 hours, as 4 hours is the maximum time I can give a 1H TF trade to run. If a 1H trade does not come to profit in less than 4 hours, either market is ranging, or entry rules are wrong. Either the way, I kill the trades for a loss and Move On. And Spikes never hurt higher TF trades and I do not worry about them. And yes, Spikes happen Big and High in Currency market.
I hold all my 1H TF trades for maximum 4 hours, for the same reason I explained in the previous point. But, my higher TF's run anywhere between 18 hours to 2 days. Because if a Trade is reversing from a historical S/R zone, it will take time to get in to profit. This is the reason, patience is a Virtue for a Pro trader ... "Do not trade because of a Live account ... Trade because of a Trade-able set up, because you have more chances of winning than losing" ... There will be days, when my terminal will not have any trade at all and there will be times, when I will have 18 - 22 open positions, but with minimum 12 -16 of them in profit. If, my previous 5 trades are yet to come to profit, I normally will not take 6th trade. I do not try to judge the market ... I swim with the market ...
I, not only carry positions over night, I carry them over in week ends also. Not as a rule though. Only if conditions are right. For example, now I have EU and GU long positions open in the week end as THEY ARE OVER SOLD ON 4H, D AND W TF'S. They are due for some sort of reversal / pull back / retracements of minimum 150 - 225 pips. Will post my next week's "Weekly trading Plan" in next couple of hours. FX market does not have daily gaps, only weekly. And if the trades are taken on higher TF's (People might be getting mad at me for for my regularity of using higher TF's ... cn't help though, that is where money bag ... wheelbarrow of pips ... is and even those gaps will not hurt.
Counter moves are always Fast and Furious. I do not trade pull backs (20 - 30 pips kind of pull backs), neither in shorter TF's or in higher TF's ... That way, I'm safe from counter moves ... Befriend the Trend and treat the counter as neighbor is my Mantra. And as I said earlier, I always activate the TSL soon after the trade hits 25 - 30 pips profit ... to protect the pips in the barrow.
And YES ... SL should be based on all the parameters of Indicators, historical S/R levels, any important NEWS coming in, equity size and more importantly Psyche of the trade ....
Hope I answered all your questions to the best of my abilities.
Pour in, if you have any more. I appreciate questions more than the Thanks button .... Questions increase / rehash my knowledge as well ....
"Trading is more about The Psyche of the trader than anything else"
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Ways to Scale In ... Add positions to winning trades /s ....
One way is to add positions after the trade hits 25 - 30, 45 - 55 and 70 - 85 pips of profit. Keep moving the SL of the profitable trades. SL of the newly opened trades should be smaller than the profit generated of the profitable trade/s. For example, if the 1st trade has generated 30 pips profit and you move the SL to 20 Pips, SL for the 2nd trade should be 15 - 20 Pips. Same logic for all the future trades.
Second way is on TF. As I mentioned earlier, 4H candles change at 6.30 am, 10.30 am, 2.30 pm, 6. 30 pm and 10.30 pm IST. Supposing you have taken the 1st trade at 10.30 am. After 10.30 am, next 1H candle change at 11.30 am. If you find the same trend continuing on 1H TF at 11.30 Candle, add position. Repeat the same exercise at 12.30 pm, 1.30 pm and so on ... But usage of SL should be as I defined in the earlier para ......
"Saving a Penny is a Penny Earned ... Same way, A Pip saved is a Pip earned. Always Protect the Pips in the Barrow"
One way is to add positions after the trade hits 25 - 30, 45 - 55 and 70 - 85 pips of profit. Keep moving the SL of the profitable trades. SL of the newly opened trades should be smaller than the profit generated of the profitable trade/s. For example, if the 1st trade has generated 30 pips profit and you move the SL to 20 Pips, SL for the 2nd trade should be 15 - 20 Pips. Same logic for all the future trades.
Second way is on TF. As I mentioned earlier, 4H candles change at 6.30 am, 10.30 am, 2.30 pm, 6. 30 pm and 10.30 pm IST. Supposing you have taken the 1st trade at 10.30 am. After 10.30 am, next 1H candle change at 11.30 am. If you find the same trend continuing on 1H TF at 11.30 Candle, add position. Repeat the same exercise at 12.30 pm, 1.30 pm and so on ... But usage of SL should be as I defined in the earlier para ......
"Saving a Penny is a Penny Earned ... Same way, A Pip saved is a Pip earned. Always Protect the Pips in the Barrow"
Weekly Trading Plan ....
This Chart is to convey how I make / Analyze my "Weekly Trading Plan" ....
Analysis for other pairs will not have pictorial explanation .....
EU is Over Sold on Weekly TF as well ....
On D TF, heavily OS .... Excellent and clear Double Bottom ....
On 4H TF, Candles are not creating HL or LL. Instead they are under correction process ... The arrow mark can be a Resistance from where, the down trend will resume all over ...
EU's new M TF Candle is indicating strong Down Trend. But, As it heavily OS on 4H, D and W TF's, there has to be correction / pull back / retracement of about 175 -225 pips ...
Will Watch Tokyo session keenly and enter Long, against confirmation, after Euro Open ... On 1H TF ... Reversal / retracement / Pull back journey starts from Smaller TF's ...
"Trading (Pressing buy / sell button) is a macro second affair. Analyzing is where one has to spend time, energy and efforts"
This Chart is to convey how I make / Analyze my "Weekly Trading Plan" ....
Analysis for other pairs will not have pictorial explanation .....
EU is Over Sold on Weekly TF as well ....
On D TF, heavily OS .... Excellent and clear Double Bottom ....
On 4H TF, Candles are not creating HL or LL. Instead they are under correction process ... The arrow mark can be a Resistance from where, the down trend will resume all over ...
EU's new M TF Candle is indicating strong Down Trend. But, As it heavily OS on 4H, D and W TF's, there has to be correction / pull back / retracement of about 175 -225 pips ...
Will Watch Tokyo session keenly and enter Long, against confirmation, after Euro Open ... On 1H TF ... Reversal / retracement / Pull back journey starts from Smaller TF's ...
"Trading (Pressing buy / sell button) is a macro second affair. Analyzing is where one has to spend time, energy and efforts"
For a valid double bottom you should have prior trend, first low, then a peak, second low, draw the neckline @peak, break above neckline for a target of distance between the peak and low.
Here in daily TF, it is still in a down trend, last candle closing below the close of previous one. Also all TF's candle close is below the MA. Stochastic can easily stay in oversold/bought area for any number of hours/days/months/years if the trend is strong.
From the weekly chart, the strong support zone is approx. @1.27840 (30 MAr-23 Jun). I consider that period as a double bottom. On H4 can't it be considered as a flag pattern. If it can be, price target calculation gives approx. 1.27355, matches with the weekly support zone.
If I want to enter the trade, I'll wait for a valid reversal @close above the MA, minimum confirmation. These are just my own views, nothing against the strategy you follow. You are doing a very appreciable work for the fellow boarders. Thanks :thumb:
Here in daily TF, it is still in a down trend, last candle closing below the close of previous one. Also all TF's candle close is below the MA. Stochastic can easily stay in oversold/bought area for any number of hours/days/months/years if the trend is strong.
From the weekly chart, the strong support zone is approx. @1.27840 (30 MAr-23 Jun). I consider that period as a double bottom. On H4 can't it be considered as a flag pattern. If it can be, price target calculation gives approx. 1.27355, matches with the weekly support zone.
If I want to enter the trade, I'll wait for a valid reversal @close above the MA, minimum confirmation. These are just my own views, nothing against the strategy you follow. You are doing a very appreciable work for the fellow boarders. Thanks :thumb:
You are Right ... according to the rules book ... :clap::clap::clap:
No doubt at all ...
But, all actions do have opposite reaction ... And the speed with which EU feel down ... It will react as well ....
EU is certainly in down trend ... NO DOUBT .. I did mention M TF pointing DOWN ... As much as I do not entertain or trade small pull backs, this pull back can be 150 - 225 pips ... Drive that with tighter SL (Only after Euro open and if this pull back analysis is confirmed in Tokyo session) ... Once the Pull back is over ... Drive it down North ....
And I forgot add something fundamental. -ve NFP from USD will also help Euro to stabilize ... I'm looking @ 1.3200 / 1.3225 / 1.3240 to SHORT again .... From present level of 1.2950 ... it is almost 250 - 320 Pips ...
South or North ... Pips in the wheel barrow is what matters ...
No doubt at all ...
But, all actions do have opposite reaction ... And the speed with which EU feel down ... It will react as well ....
EU is certainly in down trend ... NO DOUBT .. I did mention M TF pointing DOWN ... As much as I do not entertain or trade small pull backs, this pull back can be 150 - 225 pips ... Drive that with tighter SL (Only after Euro open and if this pull back analysis is confirmed in Tokyo session) ... Once the Pull back is over ... Drive it down North ....
And I forgot add something fundamental. -ve NFP from USD will also help Euro to stabilize ... I'm looking @ 1.3200 / 1.3225 / 1.3240 to SHORT again .... From present level of 1.2950 ... it is almost 250 - 320 Pips ...
South or North ... Pips in the wheel barrow is what matters ...
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I took it for granted that every one knows two things about FX ... Pip and Brokerage ...
Pip is the smallest denomination by which market movement is valued. If, say, EU moves by 5 pips that means 5 points movements and on a .1 lot size that will 5$ ....
Unlike our domestic market, wherein, we have brokerage, service tax, CTT (for MCX) and education cess, FX trading has ONLY brokerage (Called SPREAD) and that is very meager for most of the currency pairs ... Only during high volatile NEWS, this brokerage will increase.
Most of the times, EU will have a spread of 1.8 - 3 pips .... That will be 1.8$ - 3$ for a .1 lot sized trade .... This spread can be negotiated and for higher account sizes, brokers do offer 1 pip spread ....
Margin for a .1 Lot sized trade will be 100$, on a 100 leverage ....
Do remind me if I'm forgetting anything basic to cover. FX market is so very HUGE, I might have been forgetting even most basic aspect/s to cover ....
Pip is the smallest denomination by which market movement is valued. If, say, EU moves by 5 pips that means 5 points movements and on a .1 lot size that will 5$ ....
Unlike our domestic market, wherein, we have brokerage, service tax, CTT (for MCX) and education cess, FX trading has ONLY brokerage (Called SPREAD) and that is very meager for most of the currency pairs ... Only during high volatile NEWS, this brokerage will increase.
Most of the times, EU will have a spread of 1.8 - 3 pips .... That will be 1.8$ - 3$ for a .1 lot sized trade .... This spread can be negotiated and for higher account sizes, brokers do offer 1 pip spread ....
Margin for a .1 Lot sized trade will be 100$, on a 100 leverage ....
Do remind me if I'm forgetting anything basic to cover. FX market is so very HUGE, I might have been forgetting even most basic aspect/s to cover ....
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