The Legend of The Gambler - page 42
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I can confirm that this spike was actually on most EUR pairs.
It's also on my Reuters Forex Data
Cheers,
^ Thanks for the confirmation, I'm sure it was not an errant spike. Usually those spikes only hit your SLs. LOL.
My point is that I don't wonder why the market moved here or there suddenly. I don't design my strategy to try to capture or avoid these spikes. I ride the trend with a sizeable SL, that if my SL was taken out then my original overall trend view was probably wrong. I will then trail my SL as the price either confirms or rejects my overall trend view. I don't try to optimize my SLs too closely because the market needs room to move. I can start with a TP of 100 and a SL of 300, and as the trade progress, I will try to adjust the RR ratio to my favor. I don't always start with a positive RR ratio because frankly, I'm not that good, and the market is not that easy. You want to get in on the move before it is too late, and sometimes, that means getting in at the first possible signs of a sustainable trend...even if you are too early and it reverses on you.
Sometimes you are on the right side of the spikes, sometimes you are not. If you have statistics on your side, then over a large sample size, you should be on the net profitable. If not, then that just means you have no edge...and you better find one quick.
I just about to finish my AUDUSD analysis (2 more months to manually backtest), and it is showing that my trending stategy SUCKS big time on this pair. It doesn't like to trend without a lot of spikes and intermitten reversals to hit my stops. What a revelation! I'm glad I didn't trade too much on this pair with the current strategy.
The interesting part is that I will now trade countertrend for this pair, and add average down trade at around 150 pips to take advantage of this trait. My SL will be set at 300 pips for all the trades because my analysis shows that after my entry, it usually does not go 300 pips without a pullback that will hit my stops, so if I trade countertrend, then I should be able to cash this in.
So with such a big Sl of 300 pips, my hit rate must be very high. Every pair has their own behavior, so it is important that data analysis be done. I would have never come to this conclusion if I did not do this analysis. We'll see if this behavior is reflected in the other pairs that I plan to trade. And perhaps, I will add NZDUSD to review.
Funny you say that- because that spike hit me after I put on my SL as I was about to leave for a meeting.
If I didn't leave, my trades would still be sl-less until I saw fit to protect my profits.
Cut my profits in half. Oh well. At least not a loss.
^ Thanks for the confirmation, I'm sure it was not an errant spike. Usually those spikes only hit your SLs. LOL.
My point is that I don't wonder why the market moved here or there suddenly. I don't design my strategy to try to capture or avoid these spikes. I ride the trend with a sizeable SL, that if my SL was taken out then my original overall trend view was probably wrong. I will then trail my SL as the price either confirms or rejects my overall trend view. I don't try to optimize my SLs too closely because the market needs room to move. I can start with a TP of 100 and a SL of 300, and as the trade progress, I will try to adjust the RR ratio to my favor. I don't always start with a positive RR ratio because frankly, I'm not that good, and the market is not that easy. You want to get in on the move before it is too late, and sometimes, that means getting in at the first possible signs of a sustainable trend...even if you are too early and it reverses on you.
Sometimes you are on the right side of the spikes, sometimes you are not. If you have statistics on your side, then over a large sample size, you should be on the net profitable. If not, then that just means you have no edge...and you better find one quick.^ Well, that'll teach you to be on the other side of my trades!
LOL, just kidding. 
Anyways, it's good hear from you, hope all is well with you.
Since my epiphany on AUDUSD yesterday, I may just try my new countertrend viewpoint later on today. I'll look at its price action in the next few hours to see if it is a candidate for my new twisted strategy based on my recent data analysis, and then decide if I want to risk 300 pip (SL) to test out my theory.
I could be totally offbase, and my analysis could be flawed, I'm really not sure. 300 pips loss would definitely hurt, especially the ego, but I've made more than that on my posted trades since I got back to trading.
I really think I will go through with the AUDUSD countertrend trade today because with this all of my talking and philosphy-spewing, what is the point if I can't demonstrate it in real life? I have to put my money where my mouth is.
Egg in my face be damned.
See ya in a few hours.
So I entered 1 AUDUSD trade, and placed a pending AUDUSD trade for the pullback countertrend.
AUDUSD
SELL @ 0.8423
SL @ 0.8725
TP @ 0.8315
Current Price @ 0.8427
Current P/L @ -4 (not including spread)
AUDUSD
SELL LIMIT@ 0.8575
SL @ 0.8725
TP @ 0.8315
Current Price @ 0.8427
PENDING (NOT FILLED YET)
Here goes! My countertrend trading has very bad RR ratios, I'll be risking 300 pips to make much less pips. This is because as time goes on, I will keep reducing my TP to get out of the trade. It is exactly the opposite on how I trend trade. I figure I will reverse my who way of thinking if I trade countertrend because of it reversing nature. With the pending trade in place, I will further risk another 150 pips to cost average down.
Placing another pending order on EURUSD with a decent 1:1 starting RR ratio if it fills.
EURUSD
BUY LIMIT@ 1.4260
SL @ 1.4200
TP @ 1.4320
Current Price @ 1.4282
PENDING (NOT FILLED YET)
The SL and TP was arbitrary, I still haven't figured out what is a good figure to use on EURUSD yet.
The EURUSD trade just filled.
I'm looking around the different forex shops, and I really believe I will be moving to mbtrading or strictly to futures on Interactive Brokers by the end of the year. I really don't need the metatrader platform because I'm trading manually and using my eyeballs on price action, and the spread is just horrible on IBFX relative to the other shops.
I'm losing 1-4 pips on each transaction. My AUDUSD is 5 pips spread on IBFX, while on mbtrading, it is around 1.6 pips. I don't mind paying a little higher like 1 pip, but they are not even competitive at all. When you are trading size and throughout the year, this adds up to thousands of dollars per year.