FT has been trading full time from home for two years, with nothing but four kids and a beach to distract him .
He fills his spare time with weight training and rugby, though more coaching than playing these days.
FT mostly trades the forex markets and although he plays FTSE on occasions his bread and butter market is £$.
He likes to think that his technique is evolving but still hasn’t the temperament or money to back the big calls. He prefers to trade between 1 and 3 times a day, aiming to take regular small gains, but feels part of the evolution is in not dealing if the conditions don’t feel right.
Stop Losses Need To Breathe Too
Sterling sold off overnight and I think there were two reasons. The newswires were blaming the Independent newspaper, which reported that the Financial Services Compensation Scheme (which is supposed to compensate savers who lose their deposits) has only £4.4m. FOUR MILLION SQUID! That would have needed a variation on the bread and fishes trick to cover Northern Rock savers!
Shocking though this is, I’m not sure it’s big enough to knock a cent off GBP/USD overnight. The other reason that I have some time for is shown on the chart below. Yesterday’s overnight rise hit the downtrend line that started in July, but failure to break above it saw Sterling return from whence it came.
Those of you who follow the dark arts of Technical Analysis through Japanese Candlesticks will have noticed a bearish Shooting Star, a definite topic for a future article.
Recently I’ve been making OK money, but no more than that, and the main culprit continues to be my mismanagement of the trailing stop loss.
This morning I spotted a pretty good downtrend that had started in Asian time. To be fair I took too long with my Weetabix and only joined in the tail end of it, but it was worth doing.
I sold £8 of GBP/USD at $2.0116 when the price failed to break resistance. Initially I placed my stop at $2.0130, safely above the downtrend line. I locked in profits as the price fell, first closing off £5 of the bet at $2.0103 and the another £1 at $2.0096, but was more restrained in bringing my stop down.
“Give it a bit more room to breathe,” I thought.
I trailed my stop at a minimum of 5 pips above the downtrend line, which meant I hadn’t reached breakeven when the currency had a change of mind and stopped out my last £2 as it rallied.
Not much damage done, I made £77 overall, but the trailing stop loss experiment continues.
Happy Trading
P.S. Any oil barons out there might want to read this - BP predicting a “Dreadful” third quarter.
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