"My method" can be applied to any currency pair (or gold or any market) that trends. Only the parameters of the Trailing Stop Loss and the contract size are the variables."
In the case of the GBP/JPY, it is more volatile than the EUR/USD, therefore the Trailing Stop Loss should be larger and the number of contracts should be smaller (relative to EUR/USD)
1. If you look at the weekly and daily charts, there was an impressive turnaround in July 2007 and the market has been trending downward ever since. Therefore the main trend is down.
Furthermore, that downward trend since Oct 2007 has accelerated.
Remember: If the chart starts at the top left corner and ends at the bottom right corner...the market is going DOWN (It is amazing the number of people who can't see that!!)
Therefore, as a Trend Trader, you should only be trading in the main , or "short", direction for the GBP/JPY pair.
2. Stops
From a quick look at the GBP/JPY pair, it would appear that for a medium term trader, that you would need to use stops of about 150 pips. (Big enough not to be whipsawed by the "noise" of the market, small enough not to cause too much damage too your account...but also sufficient to tell you that your entry was wwwrong)
Also, when you have got this down pat, you should then think about using Trailing Stop Losses that continually lock in your profits as the market continues to move in your direction.
AAAAhhhhhh !!!!! SUCCESS !!!!!!
3. Anti-Hedge Insurance
Now lets look at the other scenario. You know, the one where you were wwwwwrong. (I have trouble saying that word... LOL ).
The Anti-Hedge is a method that will minimise your drawdowns AND will get you back all or most of your losses if you make a bad trade. It was explained here yesterday. Go here
http://www.forexfactory.com/showpost...ostcount=70735
Use those three steps, plus some reasonable money management and you are assured of successful trading.
http://www.forexfactory.com/showpost.php?p=1921509&postcount=70845
Practical Tips For Newbie
8 years ago
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