Firstly, i am a noob, i know basic economics and a good grasp of technical analysis, which really doesn't add up to much.
O well, most guys are noobs when they start ! i've been 'into' trading for almost 2 years. the first year was dossing about, the second year was very intense and i have improved a lot in both technical and economics aspects.
I had the help of a very good trader too, he told me about averaging down about i year ago and it's only about a month ago i've come to realise the usefulness of this tactic, many other professionals do it too.
Right, i average down into pullbacks in trends. Like GBPUSD, uptrend and looks like it needs a pullback and looks overbought, instead of setting a buy limit on 'where it should bounce' i set several buy limits, each an amount between each other: each have the same stop loss and risk is CAPPED, unless gap downs etc; but shit happens and if a 170 pip gap up is as bad as it gets, i'm in.
My buy limits double the further down, as in , i start at 0.1....0.2....0.4...0.8. bringing my average price closer.
Sunday, 23 May 2010
Friday, 21 May 2010
details
Here's my trading in a nutshell (demo anyways!)
i swing trade fundamentally correct trends;i try not to catch the reversal itself, though that would be great. Instead i try best to understand what's happening with economics, let the reversal happen, so that i understand it. Once the trend has begun i average down into pullbacks in these fundamentally correct trends, my max risk on these trades is pre determined and about 2-3% risk, target of the trades is at the retracment's high and stop loss is wide and above the previous high/bewlow previous low.
I have a daytrading activity going on too, i trade the hourly charts of GBPUSD and average down into pullbacks in trends, using 50/200 EMAs and multiple timeframes to help with that. It is entirely possible i'm long GBPUSD on a swing trade and short it on a day trade.
No trend no trade.
i swing trade fundamentally correct trends;i try not to catch the reversal itself, though that would be great. Instead i try best to understand what's happening with economics, let the reversal happen, so that i understand it. Once the trend has begun i average down into pullbacks in these fundamentally correct trends, my max risk on these trades is pre determined and about 2-3% risk, target of the trades is at the retracment's high and stop loss is wide and above the previous high/bewlow previous low.
I have a daytrading activity going on too, i trade the hourly charts of GBPUSD and average down into pullbacks in trends, using 50/200 EMAs and multiple timeframes to help with that. It is entirely possible i'm long GBPUSD on a swing trade and short it on a day trade.
No trend no trade.
Thursday, 20 May 2010
Watch this space
Currently demo trading forex for a year and big focus on economics/fundamentals with a technical entry, i also average down but in a calculated way
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