Ok, so now the 4 hour trend looks up, I switch to the 15 min charts and get the signal to go long. Everything looks great. The price starts climbing and I’m in the positive, BUT, I didn’t really know where to get out at! Of course you want the price to climb to the moon, but you have to have an exit strategy! I was looking for a risk/reward ration of at least 1:2, which is much to high I’ve learned for the Cowabunga system. I was actually up about 25-30 pips, but since I was hesitant and got greedy, I lost all those pips and ended up going negative about 5 bucks again! Not a very great start for the first week of trading, especially since I should be in the red. I was so discouraged I just shut the charts down and didn’t look for any more opportunities, which is a shame, cause I checked later and there was another valid entry that would of gotten back to where I started and possible in the black.
So from now on I think I will use these rules for my exit strategy. I will open 2 lots, exit for first lot will be approx at 1:1 risk/reward ratio, and this first lot will be set when I set the stop loss. This will be setup as a Order Cancels Other setup. Profit will be taken at that point. Once the Take profit stop is hit, The second lot will either then have it’s stop loss moved to break even or higher and allowed to ride the wave, if the trend is strong enough to indicate that the price will go higher. Hopefully this will lock in atleast 1:1 risk/reward profits for 1 lot, and possible the same or more for the other lot.
One of the most important things to remember, STICK TO THE RULES OF YOUR SYSTEM! Once you start second guessing yourself you are pretty much sure to have bad results!
09/09/09 01:32:42 - Went long 2 @ 1.65283
09/09/09 02:56:19 - Price reversed, should of took profit, but got stopped out instead @1.65020