Tuesday, June 16, 2009

Set A Stop or Just Get Out

I'm on a nineteen trade winning streak with my eur/usd trading presently. I've identified a fairly reliable, non-news release chart pattern that has produced another win for me this morning (by "non-news" I mean that if there's a news release that affects this pair, I wouldn't dare rely on this particular pattern - news releases are wild times).

I'm setting stops too tightly though, or perhaps using them in situations where I should just cash out the position and not think about letting a winner run. At some point I picked up the habit of setting a stop just above break even on a trade that goes in the money by 10 pips. Sometimes this is the beginning of a long run in my favor, but most times the trade snaps back to the stop and I cash out with a few pennies. That's not always bad as the price action sometimes moves in such a way that my trade would have gone against me, but it always leaves me feeling like I've left money on the table.

I need to keep an eye on these moves and see if there's some pattern that would indicate that a small winner like I'm describing is done and should just be scalped. The two that I witnessed this morning, had I scalped them, would have put me past my weekly NAV target for this week.

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