As mentioned in my twitter, I am trading spot forex in demo account to get familiar with the platform and position sizing. This is a dummy trade of USD/JPY. Long position was established around 1am NY time @117.1199. Stop loss was set at the recent swing low 117.056. First target of 117.346 was achieved, stop loss was trailed to 117.279 and triggered.
Closed 2/3 of position at 117.346
Closed 1/3 of position at 117.279
One paper trade with + 1.48 R
[photopress:USDJPY1hour29Mar2007.PNG,full,alignleft]
Journal note: Apparently, the exit was premature. I was over aggressive when trailing stops. To lock in some small profit, I am missing the forest. Well, lesson learnt.
I am starting trading live tomorrow. The risk amount for forex trades are half of my normal R size, until I see convincing result I will get back to my normal R amount.
A USD/JPY trade stop only 5-6 pips away from your entry (or trailing, for that matter) is extremely close. You could get taken out on any little fluctuation, as you’ve observed. If you were scalping or really short-term trading, that might be ok, but it looks like you’re aimed more toward swing trading, so you definitely want something a bit looser to not get taken out by the inevitable little twists and turns.
A USD/JPY trade stop only 5-6 pips away from your entry (or trailing, for that matter) is extremely close. You could get taken out on any little fluctuation, as you’ve observed. If you were scalping or really short-term trading, that might be ok, but it looks like you’re aimed more toward swing trading, so you definitely want something a bit looser to not get taken out by the inevitable little twists and turns.
John: You’ve nailed it. I have been stopped out a couple of times due to this stop. I thought it was chart based, “it should be safe”. Apparently, I am wrong.
I am working on it. Thanks for your comment and suggestions!
John: You’ve nailed it. I have been stopped out a couple of times due to this stop. I thought it was chart based, “it should be safe”. Apparently, I am wrong.
I am working on it. Thanks for your comment and suggestions!
Hi TraderGav,
The upside of trading USD/JPY from the long side is the carry. It is a high interest paying position, yielding some 4%, but you can only benefit from this aspect of the trade if you hold it for a significant length of time.
I think charts may be the way to go with the yend as it doesn’t track the economic fundamentals as obviously as GBP, USD or EUR. I would just spend a little time getting a feel for the intraday ranges, to get some gauge of the breathing space needed for trades. I wouldn’t be averse to placing a 5 pip stop in some rare circumstances, but it’s probably always more profitable to take profit than to have a trailing stop so close to the spot.
All the best
Hi TraderGav,
The upside of trading USD/JPY from the long side is the carry. It is a high interest paying position, yielding some 4%, but you can only benefit from this aspect of the trade if you hold it for a significant length of time.
I think charts may be the way to go with the yend as it doesn’t track the economic fundamentals as obviously as GBP, USD or EUR. I would just spend a little time getting a feel for the intraday ranges, to get some gauge of the breathing space needed for trades. I wouldn’t be averse to placing a 5 pip stop in some rare circumstances, but it’s probably always more profitable to take profit than to have a trailing stop so close to the spot.
All the best
Caravaggio, Thanks for the comment. I am still new to FX trading. Now, I am in kinda experimental phase.
I do find problems when trading FX with pure TA approach. I am looking into carry trade strategy as well.
By the way, you got nice track records so far. Keep it up!
Caravaggio, Thanks for the comment. I am still new to FX trading. Now, I am in kinda experimental phase.
I do find problems when trading FX with pure TA approach. I am looking into carry trade strategy as well.
By the way, you got nice track records so far. Keep it up!