Comment by Peter jcp on June 9, 2012 at 12:52pm

Hi Trae - Although I always keep an eye on this pair - I very rarely trade it. I can see the cloud is showing good resistance and the fact that the trend last 12 months as been down it does appear that more lies ahead. However i do see further strong support at the 0.7900-40 area and therefore wondered the following.- 

What targets are you looking at and how many months are you giving it ? 

Your stop look approx over 0.8500 and so you are allowing at least 400 pips ?

Therefore you need to be looking under 0.7500 and so that could be 3-7 months and then the end result would only be a RR of approx 1.?

Trae - no disrespect but am I missing something here  ? I hope i am wrong but I think my real question should be why?

Regards

Peter

Comment by Trae on June 9, 2012 at 2:29pm

 if you over think think things peter you will never ever be involved. I have rules that I follow according to my plan, if my rules are met I  get in a trade, I risk money I am comfortable loosing and have a good r/r that means i size the lot based on how much money Im willing to risk pips has nothing to do with it u can risk the same amount every single time. I really liked the monthly set up, but i used the 4hr for a good entry if you will look there is a nice pin bar set up,when all this stuff lines up for me its time too get involved. hope this helps better understand, thanks for the question 

Comment by Peter jcp on June 9, 2012 at 3:28pm

I will try and explain further the question and what I mean etc - Question -

Why take this long term trade with a 400+ pip stop on the E/G pair?  

OK - if it was a yen pair I would understand more as G/J pair etc can move 1-2k pips in a few months - so RR's of 2 -4 available off a 400 pip stop. However the E/G is a small mover normally - so if you stop had been under 100 pips on a long term position trade and you were after 2-400 pip target over 1-3 months I could understand more.

Any RR under 1 or under 1.5 really are not really that good. So a 25 pip stop and a 80 pips target is far more rewarding in cash terms than a 400 pip stop and even a 1000 pip result.

Think about it - lets say a $10k account and your stake on trades is 2% 

400 pip stop - stake per pip is 50 cent / half a dollar - target 1000 pips result - $500

25 pip stop   - stake per pip $8  - target 80 pip result -$640.

Conclusion - why wait months for a worse result than one that can happen in less than a day ?

Now I am like you and do like an occasional monthly trades. I use lower stake than scalping - but a good position trade to me need an RR over 10. 0.5% risk on stake can be 5% reward. ie maximum 50 pip stop - looking for 500+ pip result. ( I work off smaller stops but don't expect all traders to do scalp/ swing /position).

If you are like 85% certain on longer term you probably think the stop is irrelevant. But its not - because you base what you are comfortable at loosing  - and so if its 400 pips that means your stake as to be low. I appreciate once you are in the trade and up 100 pips you can start loading on more and tightening the stop. If you are planning that good luck and I wish you well that it turns out in your favour. Good trading regards Peter

 

Comment by Trae on June 9, 2012 at 3:53pm

My target is not yet decided peter I enterd on the 4 hour pin and will now manage this trade on the monthly my exit will be when price closes above tenk whether it be 1 to 1 1 to 5 or a loss I am ready for what ever comes I will loose no sleep over this trade. I saw a chance to short so I did there are many ways to manage this now hope this helps

Comment by Trae on June 9, 2012 at 4:10pm

Thankyou lisa for your insight and thankyou peter for your questions much respect for your thoughts and opinions

Comment by Trae on June 9, 2012 at 5:03pm

I have become a fan of your trading style Lisa

Comment by Gill on June 9, 2012 at 6:05pm

Hi Trae -looks great as usual... I wish my charts were so neat -  what about the chinqou span I only noticed it's not on your chart... do you not use it? Gill

Comment by 2ndSkiesForex on June 9, 2012 at 7:02pm

Nice trade, I like how its happening with such a strong flat kumo along with a key role reversal level being broken.

I will be interested to see how this plays out but overall, based on ichimoku kumo breaks, its a solid entry.  

Kind Regards,
Chris

Comment by Trae on June 9, 2012 at 7:29pm

Thanks Chris and also for the studies,

Comment by Trae on June 9, 2012 at 8:26pm

Hi Gill, I use the span but I also take it on and off my chart if I feel I need just one more confirmation ill put it up and confim it above or below price hope it helps

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