Monday, October 13, 2008

Swing trading practice

I approached today market with swing trading and half size trades. Before Europe trading there was strong trend up in eur/usd, after that in early EU range developed. When that range broke to the downside I decided to dip my toe on idea that it's retracement and trend up will come again at least back to the highs. First trade I abandoned too early but in the end it showed as ok decision. Second trade was based on idea that quick drop was just clearing first longs and after it bounced from some fibb level I got in again.
Now I was in territory not familiar to me and that is holding the trade. I had great entry and for my swing trading idea I should just hold through swings. At 13:05 price approached previous lows and I felt it will be resistance. But I was in swing trade so let's hold on. Well from that point I fell in emotional depression as market slowly ticked down more and more. I was very depressed holding that trade and not taking profit. It was really bad emotional state and I usually do things in the market just to get myself out of emotions. My trade was still positive but I was depressed and sad. Then there was pause around the lows, I was still in bad feelings. Then it suddenly started ticking up again, I was contemplating adding to the trade but I didn't. Quick trend cleared resistance at the previous morning support. My plan from the beginning of the trade was to take profit at around 660. Than I simply closed the trade without much technical reason. I guess that I was just relieved after being depressed and didn't want to risk another cycle of depression with market going down. So I cut my profit short I just couldn't hold it any longer. I wanted out of emotional roller coaster.
Well I could have used some trail stop, but no, I wanted to finish with whole swing adventure. Now while I write this market hit 680 and my swing idea proved right. It's still in uptrend and some good trailing could keep swing traders long for more.

Trades were half size so it's +26 full size pips

I guess that for me some kind of trading around swing idea would prove easier. Like looking in hindsight taking trade of the table around 13:05 when there was resistance, all with idea of establishing long position again when reaction start to slow down. Than again holding through next trend up new position with decision of taking it off when I notice again reversal tendencies. Opening again new position when reaction fades away. It's not trading in scalping manner because you can be off in new trades but let them be in loss on account of previous trend wins.
If I see correctly that like today 570 is low and we will probably touch high of 670 I have core idea. Than I should scalp in the direction of that idea until it's proving right. All the scalps count as one big long trade with me being out of it on occasions and back in. Easier than just hold, at least for me. It's true that sometimes you can be wrong and take off the trade that continues but it's all in practice.
I'm satisfied with profit today and my practice of swing trading just to see what problems do I face that way.

Original content can be found at Forex Intraday Trading website

No comments: