I’ve hardly ever won at this currency pair on Forex. But that does not deter me. I’m looking at it again and have shorted it recently at the peak with a very wide stop-loss above. There are some interesting patterns in the chart which means to me that the probability is favourable. Trading currency pairs is different in most cases to trading stocks. I’ve found that the same principles apply but not to the same degrees.If I know this is a dangerous currency pair, why am I still at it and willing to lose? Think about the enemies – fear is one of them. Fear of losing money is to be conquered. This is part of the process. I need to understand why I’ve been losing at this one and change my strategy to a winning one, for this pair.
I’ve put bets both in my live account and on demo accounts, using different stop-losses for almost the same entry position. I want to see what will happen. Sometimes getting a stop-loss wrong on a currency pair, is the main reason for losses. Obviously I’ve put much larger stop-losses on my demo trade on this than in my live account. This is the process of experimentation – that’s where the learning is. If I discover how to play this one, I could snipe it much better in the future. But I’ve got to learn about my prey to better take my aim.
Update: 2015-03-10 – busted badly on this again.
- It’s the wildest pair to trade.
- It follows closely most time the USD value on USD/JPY.
- Reward:Risk ratio not favourable relative to my pot.
- Focus well on ‘charts’ that are less high risk.
- Know my limitations relative to size of ‘investment’ or risk.
- Don’t be lured too much to conquer big challenges, that are attractive but where Reward:Risk is unacceptable (in general or specfic).
- Become the ‘sniper’: more forethought and less trading.