If I would have “bet the farm” on my short USD trades some days ago – I’d be fairly deep under water. The USD has continued to rise in the face of rising equity prices – and for the most part will likely have broken every “short USD” trade out there in the process. I don’t trade that way – I don’t “bet farms”.
Considering the weakness in JPY and the 9% account profits I’ve generated there – I can’t complain. Regardless….the point being – If you see a trade idea developing, and decide to get involved – place small orders in the direction of the momentum.
In the case of JPY for example – I had several orders waiting several pips “above” the current price action day-to-day. If indeed the momentum continued in my favor – more and more orders would be picked up – but more importantly – ONLY IN THE DIRECTION OF THE MOMENTUM. When looking to short USD I “had” several orders waiting underneath day-to-day price action with “hopes” of getting filled. As the USD continued to move against me – no problem as I’ve got next to no “immediate exposure”.
I had posted /suggested getting long the EUR/USD pair at 1.3170 some time ago. Well……I’m not going to enter the market at that level IF PRICE IS IN A DOWNTREND – why get involved when a trade is moving opposite your interests? But I “may” decide to take the trade once price action has turned – and I see the same value of 1.3170 – BUT WHEN PRICE IS MOVING HIGHER!
So – In staggering your orders, you afford yourself additional time to evaluate the trade – and access your ideas….without commiting such resources that the trade “must move in your direction or you’re toast”. Sure you might miss a pip or two but that’s not the point. Why get involved with price – when price is still moving against you?
Small orders over time – will keep you in the game….betting the farm won’t.
What position do you still have open right now? Just wondering.
I’ve still got a couple “short usd” positions via USD/CAD as well AUD/USD. Otherwise – I am hanging out more long commods vs JPY orders ABOVE current action after booking profits on the entire trade.
Great blog advice Kong – I’m learning !
Keep on Rolo – that’s great. Keeping your orders small to start – (real small) lets you see/trade things in real time – and not run the risk of getting cleaned out.
As well “nailing” an exact price level where things will turn is 100% totally and absolutely – impossible.
Keep up the good work.
Like the way you think. Wish you had this blog started 2 yrs ago. Would have saved me a lot of trouble. Looking forward to your subscription setup. My usd based shorts not going anywhere so far. Waiting.
Lots more to come here! We’ll see where we are at IN 2 years!
So far it’s been alot of fun – also a pile of work.
Thanks for the support.