Have you ever though about the common saying – CUT YOUR LOSSES EARLY AND LET YOUR PROFITS RUN? I’m sure every trader knows it, however, not everyone follows.
During the process of creating my strategy I was asking myself the question – why traders wait and keep losses run, but as soon as profit comes we fix it?
A lot of traders stay in sagging for days and even months, but don’t hold profit for more than an hour. How come the profit compared to stop is so little? Thats the fear of market speaking inside you. The fear of loosing everything. That is a completely wrong approach.
Under Trade like a pro, I mean banks, funds, investment companies and other big players. The ones who hold foreign currencies, not the position of currency pairs. As long as the market situation stays the same, they will not make any move (change to other currency or buying actives). These players don’t depend on leverage and margin call for them impossible. I took the similar approach for my trading signals and partly for my trading strategy.
My idea based on S/L is fixed and known, but T/P depends on market situation and greed of the trader. The market gives as much as it can. It’s foolish to deny what you can have. I recommend take goals of 40-70 pips from S/L, not excluding 100-120 pips for one trading session (8 hours).
The trading strategy means, that S/L will be your T/P. As long as price changes, S/L changes. In case the signal changes for opposite direction – close the trade and wait for the right direction of trend or your own idea. That will save your time and increase your efficiency. Cut the number of trades, increase the quality. Remember, it is better to loose the change of profit than stay in sagging and have losses.
Each signals term, as well as trade – one trading session. You can see the schedule under the trading signals table. Ideal variant is to catch the trend and move S/L till the moment it is higher than your trade’s open price.
S/L will not be right every day, but statically it is a winning strategy, that generates profitable trading ideas 24 hours per day, except weekends.
Rule #6 – DON’T TRADE EVERYDAY
Also, you can use contra strategy and play against the signals. Put the limit order on breakout stops with S/L 20-30 pips (depending on pair volatility) and T/P from 40 pips. Do not forget to correct the limit orders according to changes in the signal table.
Last but not least advice – before making any trading decision evaluate how far can the price get. As more obstacles and barriers on your way, as least preferable the trade is.
Rule #1 – TREND IS YOUR FRIEND