Wednesday was not a good day's trading seeing just 4 USD profit but as I have said since I started trading, it's a profit and that's better than nothing and definitely beats a loss! I don't care whether the profit from a position ends up being 0.10, 20 or 200 USD, it is still a profit and that is good enough - it's a step forward and a bench mark to try and beat with the next trade. I was expecting an end of week rush in one direction or the other, spread over Thursday and Friday but that did not happen as I made clear over Twitter, wondering why there was no real movement in the markets.
Thursday was a very boring day of trading unfortunately - the US economic numbers that were released having much less impact than I expected! THAT WAS UNTIL 1700 GMT (1200 EST) when I checked my mobile phone trading app on a whim (having previously given up on the market) to see, to my surprise, the market had dropped just minutes before. I didn't catch it right at the bottom of the trough but figured that with a solid day up-trend my short positions (sell positions) would probably not get another chance to see the bottom of that trough and so implemented "stop orders", with dynamic follows on all of my profitable positions. I will explain stops and limits for those unfamiliar with trading, so those of you who know about it can skip down a bit.
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[Stop loss orders and limit orders: let's say you open a position on GBPUSD. Many
traders will immediately implement a "stop loss order", a line on the graph at a certain
value which if crossed will trigger the position to be automatically closed at a loss. So
for example if you open a "long" or "buy" position at 1.610, you may set your stop loss
20 pips away at 1.698, if the position is worth 1 USD per pip, the position will then close
at a 20 USD loss. Stop orders prevent positions' losses from increasing to silly amounts.
They close the position automatically, even when you aren't there, and can be very useful
for some traders.
Limit orders do the same but for profits; you open a position and if you think it may hit a certain
value but only for an instant or want to garuantee a profitable close it if does so, you can use a limit order to make it close when it hits that price. Automatically and immediately.
Both types of orders' values can be changed at anytime.]
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Now I must say that I don't use stop losses in the traditional way because no loss is really ever acceptable to me - if I make a loss, I want to learn a lesson from it to prevent it from happening again rather than just accepting it and moving onto the next loss. The only time I use stop orders is when I have a position open and in profit and I want to get the maximum profit from it. To do this I have the computer automatically close the position at a spike in the price. I get it to do this, as you may already have worked out, by using the "dynamic stop" option - so that the stop line follows the profit line at a set distance but never goes back on itself, only increasing the profit that I can bank from the position. By doing this, Thursday evening's drop in the market brought me around 30 USD in profit before rebounding slightly. That was all for the day, I had hit my target and was pleased that the trading day had livened up a bit!
Friday was a very mixed day. It was SO BORING all day and I even tweeted that it was, wondering where the end of week rush was... Then suddenly it happened, very suddenly. The market had been twiddling it's thumbs at around 1.62-1.64 all day and was being really dull until the late afternoon/early evening when there was a spike upwards towards 1.62. As it began I knew that this was the start of a strong trend because it started with such impetus. I went long, then again and again as it went up. By the end of the trending period I had banked almost two hundred pips profit and while not all of my positions were of any significant size, it helped me surpass the day's target... Make up for Wednesday's losses... Bank next Monday's profits and put a smile on my face for a good end to the trading week. Three days in one wasn't bad!
Friday was a very mixed day. It was SO BORING all day and I even tweeted that it was, wondering where the end of week rush was... Then suddenly it happened, very suddenly. The market had been twiddling it's thumbs at around 1.62-1.64 all day and was being really dull until the late afternoon/early evening when there was a spike upwards towards 1.62. As it began I knew that this was the start of a strong trend because it started with such impetus. I went long, then again and again as it went up. By the end of the trending period I had banked almost two hundred pips profit and while not all of my positions were of any significant size, it helped me surpass the day's target... Make up for Wednesday's losses... Bank next Monday's profits and put a smile on my face for a good end to the trading week. Three days in one wasn't bad!
After this enormous and unexpected movement, the GBPUSD stopped moving and with my "Oh there it (the end of week surge) is" Tweet tweeted, I was ready to relax for the weekend. I am very reluctant to get next week's trading going again as I can see it rising above 1.62 and I do not want this - I still have short positions open further down towards 1.61 and below and I really wanted those to close this week, when I expected the market to drop due to the US economic figures being predicted as good and also being actually good. Alas it looks as though fear of the fiscal cliff is directing and urging the market in one direction. We shall see what next week brings and I will keep updating on here and on Twitter - I am thinking of opening a Facebook page related to my trading as well so that it is easier for others to directly interact with me - as a fellow twitter user mentioned last week, trying to chat with a 140 character limit is a nightmare! Let me know what you think, opinions on everything here are very welcome - especially criticism on the way I trade as it will open my mind up to mistakes I might be making or things I am missing. I have just 200 USD to go to hit my Christmas Challenge and seven days to go (six strictly as trading is closed Christmas day).
Final word: I read a statement the other day that struck me as a very obvious and a very valuable rule to trade by, it was "Trade what you see, not what you think." - said by no-one in particular but not me originally. If I had done this since I started I would have avoided losses of ~300 USD. I keep repeating it to myself as I am trading since I heard it and I think it has been working somewhat. This is something I recommened urgently to beginner traders - don't try to predict the trend, just follow it. Hope you enjoyed reading this as much as I enjoyed it happening to me. Remember, follow me on twitter @fxamateurtrader and comment here if you have anything longer than 140 characters to say! Thanks.
Damn that was a lot...
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