As I mentioned last night, I had gone long on the GBPJPY at 174.21 with a 50 pip stop loss and a 45 pip trailing stop. I had correctly picked the right direction and the market went up…. my trailing stop went up also to capture profits. The market hit a short term peak at 175.00 before it started to fall and caught my stoploss which at this time has moved to 174.58 netting me 37 pips. This was quite annoying as at 175.00 it was a 79 pip profit. Then, not soon after hitting my stop, the market continued it’s direction upwards to hit 172.20. Well, a profit is a profit… I still can’t decide in my head what to do for futures sake however…

The current thoughts which are playing my mind are:

1. Enter a trade with a trailing stoploss and no profit target. This will allow me to know my maximum loss plus the trailing stop will allow me to capture profits and keep myself in for potential large moves. The trailing stop will allow me to at least capture some profits (or eliminate losses) as the trade goes my way. This is what I did in this case and my trailing stop got me out of the trade.

2. Enter a trade with a predefined stoploss and a predefined limit stop (usually 2 x stop distance). This means that I will know my maximum loss and profit. If the market goes my way, I will profit but miss out on potential moves.

I have been thinking about the mixture of the two.. enter two lots.. both say with a 50 point stop. One of the lots takes a profit at 2 x stoploss and the other lot is moved to breakeven should it reach 50 points or so and then I just run a trailing stop…  I don’t have the guts yet to go double my current lot size but this may eliminate the worst bits of both trading methods.

Anyway, here was the chart showing my entry and exit.

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I just went long GBPJPY at 174.21 with a 50 pip stop loss and a 45 pip trailing stop.. the market has come off pretty strongly and I am expecting a countertrend bounce as the market seems to have found a temporary bottom between 173.60 and 174.00.. the over trend is down however so this is quite a risky trade. However, if the market does move up, I am expecting quite a handsome reward (that’s if I can hold onto the trade!)

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The last few trades, I did make quite a few trades on the currency and the DOW (urgh, why am I still trading this instrument?). I haven’t documented everything as I usually do…. many of these trades were done during the day when I was at work and not able to give myself the time to watch the markets.. yes, what on earth am I doing? Anyway, since the 24th, I placed 6 currency trades… all losing.. hmm, I won’t go too much into but they were all small losses. All I can say is that the currency markets have ‘changed’ again, I think they are in rangebound movements again as before, when I was using my trade signals to get in and out, they were working beautifully.

Anyway, back to Friday’s DOW trades, I made two trades.. one during my working period which amounted to a loss. However, at one stage it was 50 points up and if I were about watching it, I would have moved my stop to contain it.. I can’t even say it’s unlucky, I just was there to watch it and so the fault is my own, I really need to not trade when I am unable to watch it. Anyway, first trade was a -61 loss. My entry criteria was the lower stochastic on the second peak in prices, negative divergence.

When I got back home, I traded and managed to claw back some of it. There was a descending triple top pattern and I traded off the third top as it fell from the resistance line. It fell rapidly and I closed out before it went the other way.. my exit was quite lucky as it shot up from it’s position and closed 114 points higher!

Here is the chart:

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