Of the ten trades I’ve placed over the past two days the only one I’m critical of is trade 6. It was just too close to the entry point of trade 5 and had my stomach in a bit of a knot while price hovered around 1.3040, on the cusp of a potential breakdown, which if it had happened would have left me with much less room for manoeuvre than if I’d only had the one trade open. In hindsight, trade 6 would have been better off being placed at 1.3020, close to that morning’s top.
I’ve decided to add another wrinkle to this trading method, one which I’ve used before extensively with the standard BWILC method.
I’m going to target selective trades for more than my standard 10 pips. This means that I will put on a small number of trades with profit targets in the range of 30 to 50 pips. I see this as an additional arrow in my quiver to mitigate against losses as well as allowing myself to be more flexible in my approach.
Using BWILC it was standard practice to have the vast majority of trades target 30 to 50 pips, while also allowing for the occasional 100 to 200 pip winners. The rationale was to have the large winners be the primary offset for the large losses that would be experienced. The smaller wins were the bread and butter that grew the account.
I’ve recently talked about how I’ve considered increasing the leverage on some trades to accelerate recovery in a drawdown period. I think it would make sense to mix and match this approach with allowing some trades to go for slightly larger profit targets as well. The two are not be done in a single trade however. If I spot what I consider to a super high probability setup then I can choose between doubling the gearing on that trade and shooting for the usual 10 pips, or else keeping my normal leverage and going for 30 or 50 pips instead.
Trade 4, from yesterday, is an example of this larger target for selected trades.
Anyone watched the Million Dollar Traders television show that’s been shown on BBC over the past few weeks?
3 February pips: 51
4 February pips: 52