Popular Tags:

Cancelled AUDCHF and USDCAD orders

November 28, 2013 at 3:01 pm

EURNZD both profit targets reached. SL at break even

November 28, 2013 at 2:16 pm

Types of orders in Forex

November 28, 2013 at 2:15 pm
By now we know that as a part-time Forex trader we can take 3 types of action:

1. Buy a currency pair
2. Sell a currency pair
3. Just watch from the sidelines
Do not underestimate the third action, which is no action at all. One of the major sins of which all traders are guilty is entering a trade out of boredom. Just try not to do it. Period.
OK, we expect the pair to move soon what do we do? We can enter a trade by placing either:
1. Market order.
The market order means that the trade will be executed immediately. Your buy order will be filled at the Ask price and your sell order will be executed at the Bid price as soon as your order hits the market. During quite times most often your market order will be executed at the price you see on your screen. But during fast moves, your order might get filled tens of pips away from where you expected to enter. This happens because a flood of orders enter the market at the same time and they get executed on the first-come-first-serve basis.




2. Pending order

Most brokers offer just 2 types of pending orders:
   1) Limit order
   2) Stop order

   1) Limit order means that you set the exact price at which you want to buy or sell. This types of orders are useful when you want to enter a trade at a certain level on a rebound. In the picture below you can see that when the price dropped there was a good opportunity to go short if you placed a Sell Limit order near the white line on the graph (this line will be explained in the future). Also, there were numerous opportunities to enter long or add to a long position on the way up. The way to do that would be to place Buy Limit orders along the white line.

The problem with limit orders is that the price might not reach it a few pips or, when you trade multiple lots, not all lots get filled. For example, you wanted to buy 3 lots but at that price traded just one lot and then the price went back.

   2) Stop order means that your order becomes a market order once the price reached your stop level. Just the same as with the market order, the price at which the order is executed might differ from the price you set. Still placing a stop order gives you an advantage of being in the books before any market orders come in for execution.

I use stop orders both for entering and for exiting the market.

Slippage

Slippage is the difference between the expected and the actual prices. Sometimes the slippage works for you when you exiting the trade on a wave of a strong move. But most of the times the slippage is an expense, which comes out of your pocket. This is a reality of life that one has to live with. But be aware that for dishonest brokers the slippage is also an excuse to stiff you out of extra dollars.

Ways to avoid slippage:
   a) before opening an account seek experiences of other traders with this Forex broker/dealer;
   b) be aware of significant technical levels where most traders place their orders;
   c) when placing your stop orders allow a couple of extra pips for slippage. It is not uncommon to get a fill on a stop order a pip higher or lower than the highest or the lowest price of that time period. Missing a major move because you placed you stop order a pip or two too close is very disappointing. But even more disappointing is getting bumped off at the price that was not even registered.

EURUSD

November 28, 2013 at 1:44 pm
EURUSD Buy 1.3622 SL 1.3579 P1= 1.3644 P2= 1.3664

Nov. 28, Good morning!

November 28, 2013 at 1:28 pm
AUDCHF Buy 0.8281 SL 0.8238 P1= 0.8296 P2= 0.8305

EURNZD Buy 0.6711 SL 0.6688 P1= 0.6734, P2= 0.6748

USDCAD Sell 1.0566 SL 1.0603 P1= 1.0552 P2= 1.0534 

Nov. 27 end of day

November 28, 2013 at 4:22 am
I didn’t have much time to trade today and missed a few opportunities. But that’s the beauty of Forex. It’s always there for you. Never chase a trade, another one is just around the corner.

Anyways, let’s make it more fun and calculate profits/losses in dollars as opposed to pips. Let’s see how much money a person can make or lose trading my system in mini-lots.

If we traded mini lots, today’s transactions would look like this:

USDCAD Bought 0.1 lot at 1.05662, sold at 1.05844, profit $17.20

If you noticed, the purchase and sale prices were different from the original stop orders and that was due to slippage, which I will explain a later time.

Market is unmoved by the news

November 27, 2013 at 1:40 pm
Cancelled all EURUSD orders.

USDCAD 18 pips of profit, the other 2 positions SL hit at break even.

EURUSD News play

November 27, 2013 at 1:27 pm
Trading 2 units with P1 = 20 pips and P2 = trailing stop or end of day

EURUSD Sell Stop 1.3578 SL 1.3612 P1= 1.3558
                 Buy Stop 1.3612 SL 1.3578 P1= 1.3632

USDCAD P1 is filled

November 27, 2013 at 12:52 pm
USDCAD P1 is filled. Moved SL to break even at 1.0566

Notice how the price just touched 1.0585 and immediately pulled back.

Nov. 27 morning

November 27, 2013 at 12:32 pm
There are important news for USD coming out at 8:30am and Corporate profits for CAD

USDCAD Buy 1.0566 SL 1.0536 P1= 1.0584 P2= 1.0594

EURUSD is not clear yet