Month 1, Day 18 - 36-month forex trading challenge - adding to my EURCHF short.
Lots of activity overnight with AUD weakening across the board. As a result my GBPAUD (T10S) trade has been stopped out on a trailing stop. This was a winning trade, but only achieved a 0.79 reward-to-risk ratio and captured 43.7% of the potential in this trade.
Getting out at the bottom (or top) of a move is extremely difficult and I rely on my EMA (Exponential Moving Average), SMA (Simple Moving Average) signals or my trailing stop. There is always a delicate balance between giving a trade room to breathe, and locking in profit.
I have no bias on the direction of any currency pair and there now could be an opportunity to enter a long position in GBPAUD, which would be my first long entry of the challenge. The 10 EMA has crossed above the 50 SMA, but as the 50 SMA is still sloping down there is no entry permitted under my TREND strategy rules. If the 30 EMA crosses above the 50 SMA later today and the 50 SMA is flat or turning up this will be my signal to buy.
One thing I've noticed however, is while all USDJPY SMA and EMA signals were pointing south at entry, in terms of the daily chart, price action was actually BULLISH. The grey boxes show a higher high following the previous high. This is something I need to watch for on future trades. My job is to pick the high-probability pairs and this is a filter I failed to consider. Lose and learn, and moving forward this filter will be a valuable addition to my trade selection.
I've now added to my EURCHF (T11S) short. This trade has so far performed perfectly, holding inside the 240 chart's 10 EMA. With a close yesterday below the 1.1000 even handle and with EUR being one of the weakest currencies on my daily relative strength analysis, I added to this position at 6am this morning.
News out at 8:15am shows French Flash Services and Manufacturing PMI were worse than expected, with Germany's reports just out at 8:30am showing worse for manufacturing and slightly better for services. While I don't trade the news, the market has reacted, so far at least, to the offer side.
USDCHF (T12S) is taking some heat and I'm now out of 2/3 of my initial position. This is turning out to be a very similar trade to USDJPY above.
GBPUSD (T13S) has seen sideways action overnight and for the moment there's nothing to do.
USDCAD (T15S) is holding the top of the range, so again there's nothing to do, but to watch and wait.
I'm now just inside the limit of my permitted risk exposure, so am unable to enter any additional positions without exiting current ones.
I'm out this morning delivering a training session to a group of young people on employability, so I'll be away from my desk at 10am. While I try to be at my screens every four hours for the candle close, it's not always possible.
The market will do what the market will do, and all I can do is follow my rules and maintain my discipline!
Before I close out today's blog post, here's the link to last week's YouTube video, which is just out. It's much longer than I'd expected and I'm working towards making the weekly video shorter and punchier. Ideally I'd like to get these down to under 30 minutes. Let's just say it's work in progress.
Is it really possible to turn £50K into £1M? Over the next 36 months I'm going to find out by trading my personal account with full transparency.
Follow my 36-month challenge to turn £50K into £1M.
Read my blog here: https://stgforextvforexchallenge.blogspot.com
Subscribe on YouTube here: https://www.youtube.com/channel/UCyGySJ5IeDjq-DIJPU7nYvw
[Please note, the information presented is general educational material and does not constitute trading advice.
Trading foreign exchange (forex) on margin carries a high level of risk and may not be suitable for you or your circumstances.
Before trading forex you should investigate all of the risks, including the possibility that you could lose more than your initial investment.
It’s important to consider your investment objectives, level of experience and risk appetite. If in doubt seek advice from an independent financial advisor.]
Getting out at the bottom (or top) of a move is extremely difficult and I rely on my EMA (Exponential Moving Average), SMA (Simple Moving Average) signals or my trailing stop. There is always a delicate balance between giving a trade room to breathe, and locking in profit.
I have no bias on the direction of any currency pair and there now could be an opportunity to enter a long position in GBPAUD, which would be my first long entry of the challenge. The 10 EMA has crossed above the 50 SMA, but as the 50 SMA is still sloping down there is no entry permitted under my TREND strategy rules. If the 30 EMA crosses above the 50 SMA later today and the 50 SMA is flat or turning up this will be my signal to buy.
Now to other updates, and I'm out of USDJPY (T14S). The EMA exit signals all triggered and I followed my rules to get out with a 0.65% loss, instead of a potential 2% loss if my initial stop loss was ultimately hit. Somewhat ironically, price is now trading back down through the 200 SMA and approaching my entry. This happens, but it doesn't concern me – my job is to follow my rules. Although this trade took a financial loss, in terms of following my approach to the letter, it was in fact a winner.
News out at 8:15am shows French Flash Services and Manufacturing PMI were worse than expected, with Germany's reports just out at 8:30am showing worse for manufacturing and slightly better for services. While I don't trade the news, the market has reacted, so far at least, to the offer side.
GBPUSD (T13S) has seen sideways action overnight and for the moment there's nothing to do.
USDCAD (T15S) is holding the top of the range, so again there's nothing to do, but to watch and wait.
I'm now just inside the limit of my permitted risk exposure, so am unable to enter any additional positions without exiting current ones.
I'm out this morning delivering a training session to a group of young people on employability, so I'll be away from my desk at 10am. While I try to be at my screens every four hours for the candle close, it's not always possible.
The market will do what the market will do, and all I can do is follow my rules and maintain my discipline!
Before I close out today's blog post, here's the link to last week's YouTube video, which is just out. It's much longer than I'd expected and I'm working towards making the weekly video shorter and punchier. Ideally I'd like to get these down to under 30 minutes. Let's just say it's work in progress.
*********
Is it really possible to turn £50K into £1M? Over the next 36 months I'm going to find out by trading my personal account with full transparency.
Follow my 36-month challenge to turn £50K into £1M.
Read my blog here: https://stgforextvforexchallenge.blogspot.com
Subscribe on YouTube here: https://www.youtube.com/channel/UCyGySJ5IeDjq-DIJPU7nYvw
[Please note, the information presented is general educational material and does not constitute trading advice.
Trading foreign exchange (forex) on margin carries a high level of risk and may not be suitable for you or your circumstances.
Before trading forex you should investigate all of the risks, including the possibility that you could lose more than your initial investment.
It’s important to consider your investment objectives, level of experience and risk appetite. If in doubt seek advice from an independent financial advisor.]
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