GBPJPY trade update
As I mentioned last night, I had gone long on the GBPJPY at 174.21 with a 50 pip stop loss and a 45 pip trailing stop. I had correctly picked the right direction and the market went up…. my trailing stop went up also to capture profits. The market hit a short term peak at 175.00 before it started to fall and caught my stoploss which at this time has moved to 174.58 netting me 37 pips. This was quite annoying as at 175.00 it was a 79 pip profit. Then, not soon after hitting my stop, the market continued it’s direction upwards to hit 172.20. Well, a profit is a profit… I still can’t decide in my head what to do for futures sake however…
The current thoughts which are playing my mind are:
1. Enter a trade with a trailing stoploss and no profit target. This will allow me to know my maximum loss plus the trailing stop will allow me to capture profits and keep myself in for potential large moves. The trailing stop will allow me to at least capture some profits (or eliminate losses) as the trade goes my way. This is what I did in this case and my trailing stop got me out of the trade.
2. Enter a trade with a predefined stoploss and a predefined limit stop (usually 2 x stop distance). This means that I will know my maximum loss and profit. If the market goes my way, I will profit but miss out on potential moves.
I have been thinking about the mixture of the two.. enter two lots.. both say with a 50 point stop. One of the lots takes a profit at 2 x stoploss and the other lot is moved to breakeven should it reach 50 points or so and then I just run a trailing stop… I don’t have the guts yet to go double my current lot size but this may eliminate the worst bits of both trading methods.
Anyway, here was the chart showing my entry and exit.
