22 /2/10 Sterling – 2 Trades, 2 Losses -35 points. Boo

February 22, 2010

FX Trading, Trading Set-ups

So today I started with 3 system trades and 1 discretionary trades.  I had 3 system trades placed upon my platform and only one triggered.  A short in the GBPCHF which went a few pips positive before reversing and hitting my stop for a -15 loss.

The interesting thing here is that from a discretionary view point I felt that GBPCHF was a possible long trade.  However I decided to follow my systems short entry order but decided to scale back on the position size to the smallest amount possible.  As George Soros says; take the trade with the smallest amount you can. You can always add to it if it goes your way.  It’s fair to say that George knows a thing or two about trading so I’m likely to give his advice some credence.  Anyway trade taken, loss taken, minimal P&L bruising taken.

The second trade was a discretionary trade going short on GBPUSD.

I saw that after Fridays Rally Cable was entering an area of resistance and was looking to roll-over.  I liked the fact that my cotton trader set-up was available along with a couple of other confluence of events.  I placed an order to go short at 1.5469 with a stop of 1.5489 and a target of 1.5419.  The target was in the 50-62% area of the rally up and gave me a nice possible 50 points for a 2.5:1 reward to risk.  Fair trade.

Trade triggered and dropped nicely.  It went approx 20 points positive.  My idea was to move stop to B/E at +25.  It became apparent that there was (not surprisingly) strong support around the BRN of 1.5450.  Price bounced hard from here and moved back north of my entry point.  I did consider closing as I felt the sentiment was shifting but decided to let the trade play out.  Price kissed the trendline and dropped again back to the 1.5450 area…..which it bounced off again!  This is where I made a mistake.  The market had now shown me that the 1.5450 area was strong support. When it struggled to break that level on the 2nd time I should have either taken some profit or moved stop to B/E.  I did neither and decided to stick with my plan and let the trade play out.

It played out alright….with the BRN of 1.55 acting like a big magnet price just shot north, took out my stop for -20 and then hit the BRN before dropping.  If I’d been in the zone (I wasn’t this morning) then I would have sold the line at 1.55.  But that will keep for another time.

  The set-up was fine, I liked it then and I still like it now. What could have been better was my Trade  management. My learning points:

1. Be mindful of areas of S&R.  If price is struggling to break the area then either lighten up or move stop closer.

2. The market is always communicating in probabilities with us. Be open to it. Notice that  the lows of the candles are all higher. The market was responding to Bullish buying pressure.

So not a great start to the week. I’ve learnt from it. Now time to move on.

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About FXTraderPaul

A professional Trader and Coach, FXTraderPaul blogs about his adventures from the front-lines of FX Trading. A Trader and educator who can walk the walk as opposed to merely talk the talk!

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2 Comments on “22 /2/10 Sterling – 2 Trades, 2 Losses -35 points. Boo”

  1. Allison Yannakis Says:

    Is it true Monday’s are not the best day to trade on – if at all? I have heard this several times and from looking at a few currencies today there has not been much movement – a lot of side action. I have also noticed that on Friday afternoons there is a lot of action – is this traders closing off their positions before the weekend?

    Overall how many pips do you aim to get for each trade – sometimes I think I am aiming for too many as it can take hours, sometimes days to get to my target – but sometimes that because I am giving my stop loss a wide berth. Suppose it all depends on each chart, support/resistance etc.



  2. FXTraderPaul Says:

    Hi Allison,
    It is true that Mondays can be tricky….but on the flip side I’ve also had days when I’ve achieved my weekly target by 0930 on the Monday! It mostly definetly a case that you have to determine what works best for you. As for Friday there are sometimes great moves partly due to traders closing up positions. Once again on the flip side last year 50% of my losing trades were on Fridays so I cut out trading that day and spent it working on self-development.

    As for how many pips you are targeting then there is a lot to be said for what type of trading you are engaging in. If you’re looking for 100 pip moves on the 1 & 5 min chart then you’re wasting your time. Alternatively trying to scalp 20 pips on 240 and daily charts is pointless. 75 – 250 is a good target for me on 4 hour swing trades. 15 – 40 is reasonable for intra-day trades.
    Hope this helps and thanks for the feedback!



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