One of my clients and I were discussing the situation on GBPJPY last night looking for a potential entry based on the retest of the structure lows. Well instead of holding those lows with say a , we broke through to the downside causing me to flip my entire analysis. With the lower low, lower close, the question that I’m no asking myself is how can I get short?
There were a few chances over the London session and another this morning but, with all of the Greece back and forth going on, I didn’t want to hop on too aggressively on the news based spike. What I’m looking for is a push back into our previous outside return, that way I can give myself the opportunity to potentially gain massive reward without a lot of risk. Just in case I have to be wrong once or twice before nailing it (not necessarily for this trade, but in general those are the benefits of having a good risk to reward ratio).
This is a pure trend continuation/trend following trade (depending on you as a trader) which has a massive downside. Our next major structure level on this pair doesn’t come until a little under 190’s. I would expect a few road blocks on the way around the 193 and 192 even handles, but when was following a trend ever that easy (one of the reason I’m not a trend following trader).
So I’ll be keeping a close eye on this intraday in the Live trading Room and see if I can find a way in. if I do I’ll certainly share it with you when tonight’s Weekly Video comes out (https://www.youtube.com/playlist?list=PL...), but until then I’d like to leave you with this quote that I used in yesterday’s blog post. http://tradeempowered.com/a-give-take-ga...
“Perhaps the most important rule is to hold on to your winners and cut your losers. Both are equally important. If you don’t stay with your winners, you are not going to be able to pay for the losers. You also have to follow your own light. Because I have so many friends who are talented traders, I often have to remind myself that if I try to trade their way, or on their ideas, I am going to lose. Every trader has strengths and weaknesses. Some are good holders of winners, but may hold their losers a little too long. Others may cut their winners a little short, but are quick to take their losses. As long as you stick to your own style, you get the good and bad in your own approach. When you try to incorporate someone else’s style, you often wind up with the worst of both styles. I’ve done that a lot.” –Michael Marcus
Chief Currency Analyst at http://www.TradeEmpowered.com