Not entirely related to what I was talking about, but watching the pair and drawing lines I saw this, just some food for thought I guess.
The UC moves 90~ pips per day on average.
Price tends to move away from a line.
How am I not being able to capture some of that movement?
I've always played around with 1:1, 1:1.5, 1:2, 2:1, and running that structure for long series of trades, asking myself "would this work?", only to get to break even at the end. After getting the same results over and over, I came to the realization that it'll never work if I do it like that.
After watching at these charts, the "cut your losses short and let your winners run" statement makes much more sense.
I think I've always neglected trade management, or well, proper
trade management. Setting a SL with risk attached to it is just risk management, not trade management. Well, took some time to realize that
. I was listening to a Linda Raschke interview the other day, and she said "you could take random entries, and turn it into a profitable strategy with proper trade management." And then I remembered TRO stating that you could trade with an Einstein line with a positive outcome (basically you draw a horizontal line when you turn on your platform at the current price and trade off that).
Ideas to cut losers short:
- Use smaller positions instead of using super tight stops, and use that size to add later on if the trade goes my way.
- Close if it doesn't go my way after some time, because it means the idea didn't play out.
- Closing and re-entering with smaller size is better than closing and re-entering with larger size.