This is what I did today. It was a little bit unorthodox, because for me it is a first time test of trading this way, but with some minor mistakes it went okey. Let us get to the review:
So on the plan of the day we had USD/CAD, being in a Buy zone, so obviously our plan was to look for Buy spots. The development of the price during the day was not that much tho, so the price entered in to a M30 range formation, bouncing between a support and resistance level. So I decided to take a new approach in todays’ trading day. I observed the same range on the M5 time frame and decided to Buy the bottom and Sell the top on the M1 time frame, of course not with a full investment, but only 50% of my usual full investment.After opening a position and when the movement has ended I cut 80% of the trade and leave the rest 20% to float. I accomplish two things this way:
- I win some profits, because I use a very small stop loss and my pip value goes up
- I have 20% open trades on both Sell and Buy. This way I do not care if the price breaks the range and goes up or down. In either case one of my position will be stopped at the SL, but since it is only 20% left, it will be a very small loss and is covered by the profits I made on the same position inside the range. And the other 20% position will ride the wave winning me profits – either up or down.
I will keep monitoring the pair and I will continue to open both Sell and Buy positions until we are in the range. That way when a break occurs I will have a few 20% positions running and making me profits.
#Mistake: The only mistake I did today and it is essential for this type of approach, is that at one time I opened two even three Sell positions one after another, which is a mistake in two ways:
- You lose more if the pair continues to go up and breaks the range, so you will be at a loss overall.
- Our main plan on the H4 chart and our analysis are showing that the price will go up and we are in a Buy zone. So at this point it is better to open more Buy trades than Sell ones, and just open 1 Sell trade when the market reaches the top of the range.
Here is a graph with all the entry spots. SLs and closes of my trades today:
M30 time frame:
M5 time frame:
M1 time frame + positions:
Total of the day:
Profit: 3.39 euro
Two 20% positions open: 1 Buy and 1 Sell