Patience pays off with a nice GBP long trade to finish the week.
It’s important to wait for the setup or not to trade at all. Follow the rules for a high probability trade and be rewarded. Never chase a trade and always have a calculated reward to risk ratio to ensure you are not risking too much for the amount you are trying to gain. Accept what the market offers you or your target amounts.
Enjoy your weekend!
Questions are welcomed.
Michael
GBP offered a slow and steady short overnight. The session was a little unusual in that the breakout sellers were not punished. One day a week or about 20% of the time breakout traders get off easy and don’t get eaten by the Whales. Eighty percent of the time this will not be the case so DO NOT BE A BREAKOUT TRADER!
Recognizing a small stop was all that was needed to enter short after the intial pullback – after the UK session began, followed by 2 hours of consolidation, an entry is taken. Both targets are hit.
Let’s see what Friday brings us.
Questions are welcomed?
Good luck with your trading. Keep in simple.
Michael
www.privateforexcoaching.com
The EUR offered a nice short setup overnight. Plan your trades – never chase a trade and wait for your setup. If you concentrate on a few pairs and get to know their patterns, you will find reoccurring setups appear most sessions. If the setup is evident and meets your rules with a valid reward to risk ratio – you are risking very little per trade…should it move against you.
Learn the criteria for high probability trading!
Let’s see if the trading ranges pick up for Thursday and Friday…
Good luck with your trades!
Questions are always welcomed!
Michael
There was some encouraging economic news for the UK overnight, but a trade setup for a GBP short followed – for those that were patient.
An issue that arises for traders is… we have other obligations and need to leave our trading desks. I had not reached my target by the time I needed to go out today, so I had a decision to make. Do I take my profits now or tighten up my stop and hope that the market will move down to my target? It’s never a good idea to get greedy. There’s an old Wall Street adage that goes…”pigs get fat but hogs get slaughtered”. I did not want to risk more pips than I was still trying to gain, so I closed the trade. If you’ve made money with a good trade and have to go out – take your profits or use a really tight stop to avoid giving it back. The market will always be there tomorrow.
With the first 2 days of the week having tighter ranges than usual, look for a more active market as the week continues. Be patient and only trade when the setups present themselves.
Good luck in your trading!
Questions are always welcomed!
Michael
Sunday/Monday trading tends to be erratic – especially during the summer and holiday periods. I prefer not to trade Sundays/Mondays because the setups have a lower probability of being successful…no point in starting the week off on the wrong foot. After a week of moving down the GBP was up a bit overnight, but not convincingly – in any manner. Most pairs traded without much of a range.
Be very selective in what you trade, keep your rules simple and be patient!
Good trading…
Michael
Avoid trading around major news releases and Non-Farm Employment Change is a Big One!
When I first asked my mentor a number of years ago, about trading around major news events, he told me, “not to stand in front of an oncoming locomotive”. He trades in the tens of billions of dollars. He then told me that he and his traders go for breakfast during the news and come back when things have settled down.
When I further asked him about the huge spikes that frequently occur in advance of major news events and if the dealers were stopping everyone out, he told me, “no, it’s the institutions pulling their orders in advance of the news”. This creates a lack of liquidity and makes for some horrible fills for those that try and trade it.
If the Biggest Traders in the world are not trading these events… why do so many retail traders try to pick up some quick pips???
Enjoy the weekend.
Great trading!
Michael
