GBP/USD, and that gentle folk, is why you should use stops

[JDTRADER]

Yeah well I had 6 short positions but got in to early leading up to this and got margined out at 01.10am for it to colaspe back this morning arraaghhhhh. My own fault !

The market says it was not expecting this but overnight the market was buying to push it up to get the short drop ? Once again us retail guys get screwed lol

We hate it but love it to

3pm London time could be an entry for a short to still ride this wave down.

 

[Shakone]

Why do you say it was acting a bit weird yesterday Black Swan? Maybe you meant another pair, because GBPUSD was technically a very good day. I agree with you though, stops are essential, and tight ones even better to minimise this kind of effect...if you were long that is.

 

[rnicoll]

wrong side of 3 GBP pairs...

Sympathies; I was only on the wrong side of one pair, thankfully. Hope you did indeed have stops in place (I did, and even then got a 20 pip slippage before it finally traded). Managed to make about half of it back on the initial bounce, though

Today's lesson; I really REALLY need to watch out for major news announcements

 

[TAjammy]

trade with the news or not at all with such big announcements.

 

[Masquerade]

Today's lesson; I really REALLY need to watch out for major news announcements

Out of interest, how can you trade without even looking out for economic announcements?

 

[Black Swan]

Why do you say it was acting a bit weird yesterday Black Swan? Maybe you meant another pair, because GBPUSD was technically a very good day. I agree with you though, stops are essential, and tight ones even better to minimise this kind of effect...if you were long that is.

I follow/trade ten pairs, overall it's been a good week, but you know when you get the feeling that the forex markets are 'choking' on something? Well that's the feeling I got yesterday. My pairs weren't excessively choppy, just misbehavin, the chart patterns just looked and felt odd (I know that doesn't make sense)

I couldn't stay up 'till the Asia open, (feel like 5hit TBH) but went asleep expecting something to kick off overnight...

 

[rnicoll]

Out of interest, how can you trade without even looking out for economic announcements?

Badly?

Seriously though, I'm working on a technical analysis based auto-trader. The theory is it makes enough by trading 24/5 to make up for the losses when it screws up because of data that's difficult (but I'm working on it) to determine from a computer program.

At the moment, though, it's having the entire execution engine re-written, so I've been trying to this by hand. As I don't have the reflexes, patience, or ability to trade for 100+ hours straight that my algorithm assumes, this is mostly proving an informative lesson in why I should stick to the day job.

Edit: The execution engine is being re-written because as it stands, my auto-trader would have swallowed 100 pips of loss, and probably come back for more on the second crash.

 

[Shakone]

Well I'm sure it is possible but I don't think it is the wisest plan to ignore the news. At least be aware of the times of day important news usually gets released.

The theory is it makes enough by trading 24/5 to make up for the losses when it screws up because of data

What makes you think trading 24/5 is going to be better than trading just the london session for example

 

[Masquerade]

Badly?

Seriously though, I'm working on a technical analysis based auto-trader. The theory is it makes enough by trading 24/5 to make up for the losses when it screws up because of data that's difficult (but I'm working on it) to determine from a computer program.

At the moment, though, it's having the entire execution engine re-written, so I've been trying to this by hand. As I don't have the reflexes, patience, or ability to trade for 100+ hours straight that my algorithm assumes, this is mostly proving an informative lesson in why I should stick to the day job.

Oh yes...I remember your thread back in July 08. I remember posting on it. Are you breaking even on it yet?

 

[Black Swan]

Well I'm sure it is possible but I don't think it is the wisest plan to ignore the news. At least be aware of the times of day important news usually gets released.



What makes you think trading 24/5 is going to be better than trading just the london session for example

Strange thing is I can't recall an announement on ONS data having such a dramatic effect on Sterling before, not sure how it rates/flags up on, for example, FF's diary, but at a guess not that highly. Having said that the landscape changes/evolves on a daily basis, it's another part of the brain scar tissue that has be accepted for future use and reference.

 

[rnicoll]

Oh yes...I remember your thread back in July 08. I remember posting on it. Are you breaking even on it yet?

Fairly much breaking even (certainly breaking even before commission & other expenses). August was very good to me, which helps.

 

[Shakone]

If people say they are breaking even, they usually mean they are losing but slowly, lol. No offence rnicoll, I've been there. In fact I'm break even for today...

 

[rnicoll]

Well I'm sure it is possible but I don't think it is the wisest plan to ignore the news. At least be aware of the times of day important news usually gets released.



What makes you think trading 24/5 is going to be better than trading just the london session for example

Well, there's a few upsides. Firstly, it massively increases the chance of getting opportunistic trades. Secondly, while news events in the busy 8-10 hours of the day can rattle the trader they tend not to (and certainly not this badly), and that leaves a "quiet" 14-16 hours a day.

Long term, though, I'm trying to get data on upcoming events into the trader using RSS feeds or iCal so it can be processed semi-automatically.

 

[rnicoll]

If people say they are breaking even, they usually mean they are losing but slowly, lol. No offence rnicoll, I've been there. In fact I'm break even for today...

None taken, you're probably right (definitely after books, data feed etc.; I just blew $300 on IQFeed's developer kit), and lets be honest, if I was reliably making money from this I wouldn't be here complaining the GBP/USD surprised me, would I?

 

[GammaJammer]

Strange thing is I can't recall an announement on ONS data having such a dramatic effect on Sterling before, not sure how it rates/flags up on, for example, FF's diary, but at a guess not that highly. Having said that the landscape changes/evolves on a daily basis, it's another part of the brain scar tissue that has be accepted for future use and reference.

Well that's the thing - if you start relying on the colour of a little flag on the economic diary of a retail focused internet forum to tell you that right now UK GDP is kinda important then you're not quite getting the big picture. There are numerous examples during the day of market moving information that the retail punter can't reasonably be expected to have access to in real-ish time and / or to be aware of in advance, but this really ain't one of them.

 

[GladiatorX]

A 1.64% move down... Oo no. The end of the world...

Maybe if you were super-leveraged it would hurt; as a 1.64% super-leveraged position in any market would be, but as for volatility; 1.64% is relatively small; Although admittedly, currencies are less prone to large % swings simply because they are stable and such massive massive volume/holdings (Of not active traders, citizens for example)

High 5
So yeah; actually i guess that is a big move now that i check the chart; No support what so ever.

 

[Black Swan]

Well that's the thing - if you start relying on the colour of a little flag on the economic diary of a retail focused internet forum to tell you that right now UK GDP is kinda important then you're not quite getting the big picture. There are numerous examples during the day of market moving information that the retail punter can't reasonably be expected to have access to in real-ish time and / or to be aware of in advance, but this really ain't one of them.

Agreed.

 

[Black Swan]

A 1.64% move down... Oo no. The end of the world...

Maybe if you were super-leveraged it would hurt; as a 1.64% super-leveraged position in any market would be, but as for volatility; 1.64% is relatively small; Although admittedly, currencies are less prone to large % swings simply because they are stable and such massive massive volume/holdings (Of not active traders, citizens for example)

High 5
So yeah; actually i guess that is a big move now that i check the chart; No support what so ever.

t'was more a post re. the use of stops/trailing losses TBH bud, but point taken. Also it's one thing locking in profits/protecting gains, but it's the second/third time in a month I've not got out of my swing trading mentality 'comfort-zone' quickly enough to just put a big one on when I see that kind of slam dunk violent move...

 

[fcta]

The only sign that I saw was the daily which opened and closed at the same price and gave a signal of uncertainty.
This would have helped one stay out of the market but not take advantage of the huge drop.

Buddy you just exposed your ignorance of market. This is suprising to me coming from someone with so much experience.

What is uncertain in your eyes - is the certainty in the market. The world trading schools taught you to sow (buy), when you are supposed to be harvesting; and harvest when you are supposed to be sowing; It is a foolish knowledge, that cannot get out of the minds of retail traders.

Secular traders read their chart upside down. They dream and expects what is not there in the markets base on the wickedness of their hearts and not what the market is telling them.

Where is your experience you so much boast about. I pity people following calls of the so-called lengendary traders like you in this forum. Go and read my Friday's Journal to deprogramme your trading mindset from worldly and unprofitable tactics.

 

[dr.blix]

mint, i had no idea there'd be such things as god bothering traders...you live and learn ey...