There was good news for the USD this morning at 8:30 a.m. as there were less people filing for unemployment so I went short on the USD since it was good news for the USD. In fact, the news was better than expected because it was much less than the forecasted figure and less than last month’s figures. Therefore there was a larger deviation.
As you can see from this screen shot 4xPartner already closed 1/3 of my position once it reached the target of 20 pips. Now it is waiting to go to Step 1 of 20 or 40 pips (20×2) and close out another 1/3 of my position. Once it reaches this Step 1 of 40 pips, the Stop Loss will move to 22 pips (Safe Amount of 2 pips + Step 1 of 20 pips.)
And now it will wait to see if price can go on to my next target of Step 2 of another 40 pips (20×2) beyond the stop loss of 22 which would mean the price would now be at 62 pips and now the stop loss is brought to 42 pips. Either price will retrace and hit my 42 pips stop loss thereby closing out my last 1/3 position or if price keeps moving in my favor it will keep stepping up using the same formula.
Step 2 Formulas:
(Safe_Amount + STEP_1 + STEP_2 + STEP_2)
(2 pips + 20 pips + 20 pips + 20 pips)
Step 2 Formula for determining stop loss = (CurrentProfit – STEP_2)
Since I am so curious and I hope you are too, I just had to calculate what would happen if price kept moving in my favor especially when these TP’s and Step values are so small anways. I have seen quite a few times that the price of the EURUSD can move 100 pips or more so it would not be unrealistic to see prices go beyond the initial Step 2.
So here goes the calculations for the last 1/3 position. If price keeps moving in my favor now it will keep stepping up using the same formula. And here are the formulas:
(Safe_Amount + STEP_1 + STEP_2 + STEP_2 + STEP_2 + STEP_2)
(2 pips + 20 pips + 20 pips + 20 + 20 pips + 20 pips) = 102 pips and the stop loss would move to (CurrentProfit – STEP_2) or 102 – 20 = 82 pips. Either price will retrace and close my last 1/3 position at 82 pips yielding a grand total of 142 pips. (20 pips + 40 pips + 82 pips) = 142 pips.
Or if price keeps moving in my favor, it will keep stepping up using the same formula which would be (Safe_Amount + STEP_1 + STEP_2 + STEP_2 + STEP_2 + STEP_2 + STEP_2 + STEP_2)
(2 pips + 20 pips + 20 pips + 20 pips + 20 pips + 20 pips + 20 pips + 20 pips) = 142 pips
Now the stop loss will move to 122 pips. So if price retraces my grand total will be (20 pips + 40 pips + 122 pips) or 182 pips. And this scenario can happen as long as there is a big move.
As you can imagine, I am not going to figure out the next set of probabilities because chances of price moving in my favor may diminish due to reaching a major area of resistance or support.
Edit 9:30 am – As you can see from this screen shot, the price retraced and hit my 2 pip safe amount thereby closing out the last 2/3 of my position. By the way, I figured I would use a lower target of 20 pips instead of 40 pips because I knew there was more news coming at 10:00 am that could affect my 8:30 am trade.
I will be placing a trade at 10:30 a.m. when the Home Sales figures comes out and see if I can do better and get all 3 profit targets reached.
I have to say for the record that I love using this software because it has made my manual trading so much simpler and effective. I hope you order it and love it just as I have. Click here to order this highly effective tool called 4xPartner.
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Quote of the Day:
When You Hear Something – You Forget It.
When You See Something – You Remember It.
When You Do Something – You Understand It!
- Chinese Proverb