$EURUSD Now I can say it is a winning trade. A post on the retrospective of the risk assessment.

Is it a luck? Whether or not EURUSD started to be sold badly here could have been luck…at least to some extent.

But anticipating the possibility, carefully determining when to enter the market, assessing how much risk involved and how big position one could take are all about one’s effort.

Now, I am entitled to move to my loss cut line to 1.4517 that is average entry level of my short positions. So, my trade is now risk free.

Some retrospect on my preparation:

  1. I had to change my Elliott wave count three (!) times before this one hit. For the count version 1, I actually profited over 100pips although my count later was rejected. For the latter 2 counts (this and this), I had set stop sell entries that did not get filed (fortunately). So I did not lose any money while my count was not ultimately correct, but I made bucks.
  2. After getting the rain checks from the market, I convinced that the chances are higher on the next one, so I planed to risk about 2% of the capital on this trade.
  3. After the 1.4580 peak, I passed the first wave going down (black 1 in the chart) following my trading rule.
  4. When black wave 2 came close to 1.4580 peak but losing the momentum, the loss cut size came very small. Looking the uptrend losing momentum, I decided it was the time to sell. So, I sold at 1.4546 with 1.4590 stop. It was 44pips potential loss, so I adjusted the lot size so that max risk at this time will be 0.7% of the capital (the hard number is not really the point I am trying to make here).
  5. Then I set stop selling order at 1.4490 with stop loss at 1.4565, assuming what we see now as black 2 label as the presume peak. So it was 75pips max loss. I risked 1.1% of the capital here.
  6. This morning I moved all the stop to 1.4560 because by then it was clear black 2 had been defined.

20100114-eurusd-60min

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Current risk exposure:

"","","","","$29,058.30","","","","","","","","","","","","","","","","","","","","41.95%","","","2.00%","","","","","","","","","","","","","","","","","","","","","","","","","","","",""
Rational Move always use stop loss orders, and this is the worse case potential loss over the capital for the currently open positions. This is unrealized loss is less or equal to the risk exposure.

Capital growth

From recent 100 trades (%) The growth right before the 1st trade is set to 0%.
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Drawdowns

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Total returns

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(Aug 10, 2009)
Year-to-date Quarter-to-date
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This is a normalized value: the return on each trade is normalized against the capital just before the trade execution. This way, it is eliminating the effect by the capital change from deposits and withdrawals. The calculation thus reflects the trading performance of each trade. The value does not contain unrealized profits and losses. RM's trading strategy never risks more than 5% of the present capital. Not including subtraction by tax.

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