February 13, 2009 • 9:22 pm 0
It is the markets’ job to reallocate money from the ignorant to the intelligent, from the lazy to the hard working and studious; from the naive to the educated, and from the speculator to the investor.
Via The Big Picture
Filed under: Random Thoughts
February 10, 2009 • 6:11 pm 0
I know everyone all around are saying that the stimulus package of new administration will not be enough… and most probably GBPJPPY will resume the downtrend soon and looking at the daily chart it looks that way. However, it might not happen this week at least not tonight in my book. I’m going long at the trend line seeing all the charts below H4 is oversold and price couldn’t penetrate the trend line in the first try went up 150 pips after making a hole.
Lets see… this is one of my perfect setups :-)
Filed under: Random Thoughts
February 4, 2009 • 1:49 am 0
The daily downtrendline was broken last week and this week on monday it had a sharp decline but the fact of the matter is, GJ is not respecting the daily trendline at all.
This is the live trade I’m currently in. Based on the last low at 128.40. If it retrace more I’ll adjust my position size and target profit according to the development.
- A~I~
Filed under: GBP/JPY
February 2, 2009 • 5:46 am 0
The idea is that most of the time traders try to pick their target and put their position size according to that.
However, in trading… regardless of what instrument we are trading there are only one variable that is constant. That variable is our account. The losses that we take on our account are the only real value in all those numbers. Thus, we should be doing it the other way around. Pick your stop and trade your time.
For example, lets say you want to fix a stop loss of 50 pips on each trade. Well unfortunately market does not offer the exact setup where price is 50 pips away from your stop. So it might be 200 pips away from market, what to do? There you go, all you need to do is find out what your position size would be in order to equal 50 pips to 200 pips.
Lets say, with 50 pips stop loss, you wanted to limit your loss to 2% of the account size, then go ahead reduce the position size to a limit where 200 pips will equal to 2% of your account size and there you go, ready to enter the market :-)
This is one way to maximize your profits as well. Ask me how?
Lets say, my usual loss per trade (anticipated) is 1% of the account size and I got this awesome trade setup where my stop loss is only 10 pips away and the profit target is 500 pips away… I’ll put 10% margin trade with 15 pips stop loss and 500 pips target! Just imagine the expected value of this trade… the thing is I’ll be losing 1% of my account at max anyway regardless of where the current market price is from my stop loss order.
Got the idea? And let it run… you got nothing to gain from taking early profits. At least let it run till your initial risk is recovered. Which is 1%… or 2% or whatever % for you.
Unless you are doing this, you will keep loosing money regardless of how good your entry is. Regardless of how good analysis you do. Money management is the key.
Happy Trading!
Filed under: Random Thoughts
