Two Trades, One Post

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Hello Traders,

This Monday was good to me and I was able to execute two trades.  Here they are:

GBPCHF

The first trade was a classic Monday Trade.

Click above to enlarge

I got burned a few times in recent weeks because the GBPCHF had a strong tendency to the downside, so I was cautious and actually set my target 38 pips below the Weekly Central Pivot, instead of the usual 20 pips below.  Price hit the target easily and I am glad that I traded it a little more conservatively.

The final result was

a +8.5% gain on the account.  In review, there isn’t anything I would have done differently.

GBPUSD

I was flipping through the charts and I came across this trade.  It hasn’t been setting up that often, but when it does, it is fun to trade.  It is the Counter Trend Trade (CTT).

Click above to enlarge

As you can see, the daily pivot was missed and S3 was hit on the same day.  Traditional CTT rules say to stack entry buy orders up to a target 20 pips away from the missed daily pivot.  However, my backtesting has shown that if the next day’s daily pivot is missed by enough of a margin to stack trades, then there will be a much, much better chance of price hitting the next day’s pivot than the original missed pivot.

In other words, it is easier money (in my opinion) to target the next day’s daily pivot.  So that is what I did.  The final result was a +5.5% gain on the account.

However, the question remains, should I have also done a stack to the original missed pivot and taken full advantage of the signal?  In hindsight, price action looks like it may have a chance at going all the way back to the missed pivot.

Although it would have been nice to go for the much bigger profit, I believe that not taking that trade was the right thing to do.  The primary reason was trade correlation.  When I went to sleep, I had two stacks of orders in the GBPCHF and in the GBPUSD.  That is a lot of money riding on the British Pound.

If price popped up, executed some of my orders, then dropped like a rock, I would have been losing money on three different trades all going the same way.  Not good!

We will see if price gets there, but I am happy with the results.

Conclusion

So two good trades to start the week off.  They yielded a total +14.1% gain on the account and are helping me recover from the string of losses I experienced.

These are risky trades and are explained here for informational purposes only.  This is NOT trading advice.  It is suggested that you backtest a strategy extensively before ever trading it with real money.

If you enjoyed this article, you might also like:

1. Another Tough Monday Trade
2. Last trades of July (JPY)
3. 03/12/2010 EURUSD CTT Trade
4. This Week’s Monday Trade
5. A Little Redemption