Trader Tip 61: the stop loss order is not as you are outdoors carrying a position but it is to be paced where you see a clear reverse at.
Trader Tip 62: It is wiser to look at the current market condition than looking at your equity in loses or in profits. You should have what the market gives not what you want.
Trader Tip 63: the stop loss place is a relative thing. you are always exposed but you should have a stop loss. then you can choose your accepted downward and your unaccepted one too. the stop loss help you especially after a consolidation period as the breaking of the barriers of the consolidation can be in form of a trend fueled by market stop loses.
Trader Tip 64: do not repeat your position after the stop loss as long as you have chosen a well place for it.
Trader Tip 65: generally, as long as you see further rooms against you, you have to close your current position. there can be a trend and further loses. so do not rely on average on this case waiting for further losing rooms!
Trader Tip 66: the direction in the normal trading times of the day with a market sentiment forming a trend should not be defied but just wait for a correction of it or join as it is the current market sentiment. Whatever it was fast or excessive but it is the current direction. You can wait for a higher low to join that trend or go with it with a stop lower than the current bottom using a stop loss behind on these lines breaking is recommended. Caring of that trading just after the data is something else as it usually followed by a profit taking wave.
Trader Tip 67: do not test the market but wait for the market to exercise your experiences and analyses.
Trader Tip 68: You can see how the market has reacted clearly to the US labor report at the chart in this link
http://www.fx-recommends.com/fxrecommends.html . the market was expecting the US labor report to come at 200k for November 2004 but it has came lower than expected at just 112k. GBPUSD has made the spike on the data and here you can see clearly that in spite of the main dovish sentiment that was containing the market the profit taken has happened on the data clearly as most of the buyer are taking profit right there on this new level that has been caused on the data which has lead the pair to come back again lower than 1.93 level but the current market sentiment has been changed on this new data causing new buying for the pair on a third wave after the data and this has caused a new high breaking above the resistance at 1.936 and this was helped by more strength on the main trend of the USD dovish market sentiment. Also it is clear on the chart the squaring of USD selling that what has been done in the day before the data. There was also an increasing of USD selling before the data on the market tendency to sell USD on the data anyway especially as the market was already discounting good data and the main bearish trend of dollar can give much more strength to the profit taken wave on the data.
But it is not welcomed as we have said before to take risk before this important data and as you have seen that it is very good to wait for the data to take profits and even on this dovish market sentiment of USD as it is not just the main market sentiment before the data or the main trend or what is the market discounting but it is also the significance of the data what can determine the end of the spike of the first wave on the data or the profit taken wave or the third wave on the change of the current market sentiment on these new data.
Trading on the third wave or on the change of market sentiment after taking profits on the data, should be lighter than the profit taken trading. As here you start for the anticipation of an end of the profit taken wave and you should cut loss if there is breaking of the level of price that was before the data as this means that the profit taken wave can persist and this can be done if there is a high discounting level of the data or the data was against the main trend of the market and the main sentiment should persist by bargain hunters.
69: It is always preferred to take your risk on the midterm. This keeps you from the forex market fluctuations and it always gives you a time to evaluate and think.
70: the first step to loss more is comparing your current loss with your big previous profits regardless of the current losing position condition looking at your account balance. this can maximize your loss comparing with your other winning positions eroding your results.
Walid Salah El Din
FX Consultant
E-Mail:
mail@fx-recommends.com