I’ve managed to find myself with nothing to do for about an hour earlier on. It is rather unusual, since my work day is always full. At the time chart of EUR-GBP was on one of the screens, so I decided to do web search on recent articles in financial press that mentioned the pound. Here is a sample of titles that came up:
“Sterling tumbles towards parity with euro”,
“Sterling smashed again”,
“The inevitable decline of sterling”,
“More pound punishment”.
On and on it goes, with no end in sight. Few pages of various articles came in my search and not one had anything positive to say about Pound. Granted, GBP keeps falling in a lamentable fashion, some would even call it scandalous, but surely there must be somebody out there who is at least little bit positive about the old cable. Isn’t current sentiment just a bit too Pound pessimistic? Of course I’m saying it because I’ve been unable to catch a nice break in price of EUR-GBP. On a positive note, my losses have been marginal so far, comparing to the total number of pips I make/loose daily. More on this at the end of this post.
Quick review of the Kiwi trades I didn’t cover yesterday.
My original order at 2.4230 didn’t get filled first time price hit that level. This was just ofter the FOMC decision. I reentered the order and it was triggered soon after. Few hours later price moved strongly and bounced just as hard. Since I had 3 other trades in NZD crosses and this one was clearly the weakest of them, I decided to get out with profit of 61 pips.
Sell in AUD-NZD was a little unlucky. Price missed my target of 1.1790 by a few pips and jumped, so I took some pips of the table, 71 of them. Overall not a bad string.
It would appear that both EUR and CHF are hitting a wall, or at least taking a breather. They had an impressive run, so maybe it is time for a break. With this in mind, AUD-CHF looks like a good buy opportunity.
Order was placed to go long at 0.7608 and an objective of about 130 pips, or 0.7740 area. As far as EUR-GBP goes, I keep moving my sell order ever higher to most recent low on hourly charts. Concurrently, in another account, additional short order is placed. This one trails daily bar lows and, when filled, will have a target of about 500 pips. Hopefully soon.Mike K.
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December 18th, 2008 at 11:39 am
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Just saying hello. Like your style, like the blog. Good work.
Thank you, Bob.
“Cable fall is lamentable and scandalous”? I burst out laughing, mate. There is good dose of entertainment here. Sentiment is absolutely abysmal, this might be a good indication that bottom is nearby.
This EUR-GBP business is making me sick to my stomach. It just ran up 500 pips in couple of days. You were much wiser here to wait for the down move to begin. I should have paid more attention to your posts. Still have some room left in the account, but it doesn’t look good for me. Expensive lesson for the future.
Hi,
what is your average reward/risk on your trades? It seems, that you have a pretty wide stop compared to your target/take profit.
regards
Thomas
Thomas, my stops are rather loose and they will vary from trade to trade. It depends on how the chart looks like before the trade. If I was to average it out, I would say risk reward is a little less than 1:2. But there is much more to that. Pairs that move tightly, for example EUR-GBP, I will most of the time have a fixed stop. Crosses like, say GBP-NZD I only have an estimate in mind and watch how the price develop. There is not much point in having tight stops there because there is so many wide spikes. In this blog I cover mostly crosses. Every trade is a little different but this is the nature of discretionary trading, nothing is really written in stone. Varies greatly from systematic trading. There is always a trade off when it comes to stops- the tighter the stop, the more loosing trades but hopefully the winneres are big enough to recover. Myself I’d rather have more winning trades and a little bigger losses. Also, I use very little leverage per trade, so very small stops are not that critical to me.