FXjake's Free Pips

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Stop is below the daily low at 1.0780 - I had the wrong stop on the previous post
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This USDCAD trade is 100 pips + in the money.

Have moved the stop to breakeven and will hope to cash out 1/2 the position at 1.1100
 
Quote from FXjake:

This USDCAD trade is 100 pips + in the money.

Have moved the stop to breakeven and will hope to cash out 1/2 the position at 1.1100
More...

Cool! 1/2 the USDCAD position cashed out at 1.1100 (while I was mid-flight :p ), now I will see how patient I can be with the rest and hopefully get to 1.1300 or so, that would be great.


There are so many cool setups today, but I think that I will wait for some retracements before jumping on any of them.

Things like shorting the GBPUSD and AUDUSD look really good to me right now, I will wait for the double tops or sHs to form (I guess it depends on how you view the charts) before I jump on anything and I will post them here.
 

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Quote from FXjake:

Cool! 1/2 the USDCAD position cashed out at 1.1100 (while I was mid-flight :p ), now I will see how patient I can be with the rest and hopefully get to 1.1300 or so, that would be great.

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OK, the big fat bearish 1hr candle has scared me into thinking that it may be best to exit the remaining lots...
 

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Quote from FXjake:

This is a great question, Austrijec.

The details are key to profitability, as I see it.

It's funny, I think that entries really aren't that critical, but the exits sure are.... and I am not alone in that thinking.

A great example of this is the recent trade I took on the 4hr NZDUSD chart (attached).

[I know I didn't post this one on this forum, I forgot.....it happened rather quickly.]


I thought that price would bounce off of the "major" s/r zone (black line) and approach the minor s/r zone (purple shaded area), but the question remained, would price then retreat back down, or would it go higher?

At this point the trade was a "free trade" and a few pips were locked in, but I had made the decision that it looked like the minor support/resistance area (purple) would not hold, and that price would come down and knock me out at breakeven, so I exited.

Will you always get it right?

Nope.

But I have found that psychologically, it is easier to have two targets - an easy-to-achieve target that is close, one of the nearest minor support/resistance zones and a more aggressive target. Once the first target is met the remaining lots will me moved to breakeven (or + a few pips) and then I see if I can get more out of these.

Sometimes when it is clear that a reversal is coming - it is ok to just jump out straight away.

I have been thinking about this a lot and I think that there are ways to "develop" your intuition. Cognitive psychologists would call this "expertise" - but it is sort of the same thing, as I see it.

I have a lot of other thoughts on this, but I think I will use them to write an article on this issue, thanks for the inspiration austrijec.
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Hi fxjake, glad to be of help... I did use large stops for a while and worked great. Until it stopped. I do have rule to move to paper after net 3 losses in a row. After catching the breath, and making sure there is no structural change in the market, start again with real money. So my max drawdown is small. But still unwound couple of months of profits. Profit/largest drawdown ratio was high and after some calcs, finally concluded that larger stops do not add value for me. Small stops lead to smaller drawdowns, and one can instead increase bet size and get same or better effect.

So, decided to diversify into more than one system & more than 1 market - fx and shares.

What is your experience with drawdowns ?
 
Quote from austrijec:

Hi fxjake, glad to be of help... I did use large stops for a while and worked great. Until it stopped. I do have rule to move to paper after net 3 losses in a row. After catching the breath, and making sure there is no structural change in the market, start again with real money. So my max drawdown is small. But still unwound couple of months of profits. Profit/largest drawdown ratio was high and after some calcs, finally concluded that larger stops do not add value for me. Small stops lead to smaller drawdowns, and one can instead increase bet size and get same or better effect.

So, decided to diversify into more than one system & more than 1 market - fx and shares.

What is your experience with drawdowns ?
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Austrijec

Thanks for the post.

I agree that the drawdowns can be severe. However, I rarely have a drawdown of significance because my win ration is so high and I do not risk a lot per trade.

With an 80% win ratio it is difficult (but not impossible) to get 5 losing trades in a row. Also, risking a small amount, less than 2% per trade, means that you are not really going to have any terrible drawdowns.

If you change either of those factors - win rate or risk per trade, then you will obviously get into trouble.

So far I have had a 3.4% drawdown, so it has not been too bad.
 
Quote from FXjake:

long from 1.1525
stop at 1.1434

1st target 1.1800
2nd target open
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This has run over 120 pips in the expected direction, so my stop is now at break even to reduce the risk.
 

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