Losing trade yesterday morning on the GBP/USD costing me 15 pips when the market dipped and just hit my trailing stop:
And another 3 pip loss later in the morning when the same thing happened. Looking at the daily chart the trend has been down for about a week now so it’s not surprising buy trades are turning sour I suppose:
Now, I had an e-mail from a reader yesterday regarding how I determine if the signal is in the same place on the 5 and 10 minute charts. I’ve been asked this a few times and so I would like to clarify this right now. If you have a look at the chart below you will see this is for a signal yesterday afternoon on the GBP/USD. It would have been a good trade but it’s not a qualifying signal according to the ‘system’ I’m using:
As you can see, for every two bars on the 5 minute chart, there is one bar on the 10 minute chart. So I count along from the nearest hour and judge a signal to be positive if the dot over the 10 minute bar corresponds with a dot over either two of the corresponding 5 minute bars. So in the chart above you can see the dot is over the third bar on the ten minute chart but it is not over either two of the corrsponding bars on the 5 minute chart (bars 5 and 6), instead it is over the 8th bar which would correspond with the 4th bar on the 10 minute chart.
Now, obviously being trading there are no hard and fast rules, but I have been sticking to these rules because they are the rules that have been so very succesful for me for the last three months. This week has been a bit poor so far but I’ve not had a down week yet. Looking at the trade above I suppose you could argue that the signals on the 5 and 10 minute charts are very close together so perhaps that indicates a strong signal, and perhaps it does, but it’s not what I’ve been doing so I don’t really know if it works well doing that or not.
I was also asked yesterday what I do if I get a signal in the opposite direction while waiting for the initial signal to fill. This happens sometimes and up to now it’s always resolved itself by both signals disappearing before qualifying, or the later one becoming valid so there has been no need for me to make a choice. This is perhaps to be expected though if the market doesn’t know what it’s doing it’s going to drift sideways and the trade signal disappears after three bars anyway.