Learning to make a POTENTIAL big loss much, much SMALLER

I am a technician by nature, but I also know that keeping track of the fundamental stuff will help you mitigate losses...Preserving your trading capital should be your chief concern...not "how much can I make on this trade?"

This morning the BOE lowered interest rates by 50bp, which was expected. Before the announcement, I held 2 Lots (short) on the GBP/CHF and I was down significantly. On the news the pair dropped and my positions got significantly better...so I covered half my position at a small loss.

The trade triangles on both the weekly and daily are still pointing south so I kept some of my position in case we continue down, but it was not worth the risk to hold the whole thing, given that it has been losing since I shorted it....

Here is a good summation for why I maintained some of my short, even though it is still down.

Doji again doing its job

In the video from a few days ago, I never made the trade, but I felt that the Yen was going to retrace. Below and to the left is another example of a Doji star that appeared at the (short term?) high recently. Candlesticks are great technical indicators:

The Psychology of a Losing Trade (but still alive!)

Here's a video of a losing trade that I currently have.

----------------------------------------------------------

(Below 1 minute chart looks more bearish then the 15 and hourly, for some reason.)

Another Doji...This time a star!

A Doji on the Sterling/Swiss Franc Weekly...and one of the reasons I am waiting for a breakdown of support. Shorting 1 Lot which is temporarily down.

The Power of a Long-Legged Doji

Sometimes I will place a trade strictly on technical price action, but then lower the size of the trade. This is usually a trade where I expect a pair to strengthen in an overall weak trend. Below is what gave me the trade to buy 1 mini-lot ($10,000) of the Ozzie/US Dollar:

(Experienced traders...this is for the newbies!) Do you see the long skinny bar with a line right through the middle? That is a Long-Legged Doji Candlestick on an hourly chart. It is considered bullish, but obviously would be a much better indicator if it were on a daily or weekly chart. That is why I did a 'scalp' trade...in and out quickly. It was a small profit for $15.00...but it was in 5 minutes.

Unbelievable Results

A lot of you know how incredible I have been doing since starting to use trade triangles with my existing techniques. Well, I have also been trading another account occasionally. In this one I have taken $50,000 to over $57,000 since January 1.

I just updated the statement for the main account.

How a Weekly Trade Triangle Saved Me $10,000

A week and a half ago, I posted a non-blog entry where I thought that after hitting $1000 an ounce, Gold would have to retrace.

The video that Adam did on Barrick Gold convinced me that the Gold spot was going to make that break out. It was very significant, technically. Then, on February 23, Market C issued a weekly red down triangle on Barrick Gold (see below.)



Because of this, I maintained my shorts on Gold from the $970 level (we are trading at $909 today) and sold my long positions. Most of them were profitable. Had I not seen this triangle, I may have been a little slower to decide the ultimate (intermediate) direction of Gold, and those longs would have ultimately closed at a loss.

If you want to know how I do this, click the Market Club.

Here We Go Again!

In an earlier post, I did some analysis on the Sterling/Swiss Franc. I also did a couple of shorts and, combined, I think I finished even. I was very skittish, because I wasn't sure if the Sterling was ready to come down. Now I think it will. Below is the daily (the weekly is down too):



The Bank of England is meeting on Thursday morning...and it's anybody's guess what they will cut interest rates by OR what they will say about the next time they meet. So, it will behoove us to look for a support breakdown...stay tuned for my numbers.

Out until we can analyze the Euro and British monetary policy

I am out of all Euro and Sterling positions (with a sterling profit!) See statement. New research and video coming soon.

Why you have to respect the 'Bear Flag' pattern!

New video that I did last night on my trade of the Sterling/Yen. Trend is down even though I covered with a $1000 profit.

Took some profits...now what?

Took some profits...but left half the positions on the table.
See how the trades went here, along with an account update as of this blog entry.

This video will give you an idea of how I execute my trading plans.

Newsflash: 88 level on the Greenback becomes a crucial area!

The equity markets are at serious 12 year lows. Are we going lower...most probably. So now investors will fly to risk aversion investments. Bonds...Gold...and I think the US Dollar. 88, my friends, 88.

We have a dilemma...the US/YEN pair is due for a technical correction (retracement) but the equity markets are looking pretty evil (as my son would say.) So see the case for both sides on this short video.