ACCURATE EXIT STRATEGIES PROVIDE GAINS AHEAD OF SHARP REVERSALS
Nevertheless, despite the combined profitability of these trades being lower than expected, the sharp 400-Pip reversals that took place highlighted the accuracy of the Holding Periods used for these Swing Trading Strategies.
|(FXCM Charts used for Entry Signals as they use the New York Close of the Daily Candle - crucial for the Price Action Methodology)|
|(Actual Trades done using the Dukascopy Platform)|
|(Trading Manual - "Successful Forex Trading With the Daily and 4 Hour Time Frames". |
Available at www.drfxswingtrading.com)
CHF JPY TRADE
This was a similar trade that took place during the same period as the EURO JPY breakout. A Pennant Setup was also being broken at Support following a pullback that tested then U-Turned at this boundary. The nature of the candles that started the breakout indicated that we would be using the Swing Trading Strategy for Slow Breakouts.
Having determined that the setup and signals conformed to the criteria for this strategy, the trade was executed with an initial target of 180 Pips. However, at the end of the Holding Period for this strategy, the trade was up by 101 Pips - again, smaller than planned but a good trading gain nevertheless.
The decisions to close these trades at the end of their respective Holding Periods were proven to be spot on given the reversals that took place a few days later. These reversals reflected the market reaction to the decisions made by the European Central Bank on Thursday December 4, 2015.
These sharp movements reinforced the need for Swing Traders to always implement and obey the time limits set for our trades. Reversals of 10, 20 or even 40 Pips are usually the consequences of disobeying these rules, but pullbacks of 400 Pips have a way of sobering us up to the harsh reality of what this market can do to us when we trade based on emotions, greed and our ego. It is often very tempting to want more out of a trade especially after a loss or when the market has only given us a fraction of what we want out of a trade. However, it always better to have smaller gains than large losses.