GBP/AUD Trend Reversion
We talked about this trade in the "War Room" today. We discussed the need to manage risk with this trade and to understand that it is on a H1 chart so it inherently comes with some more risk. Please plan accordingly. You can do so by reviewing the risk management formulas down below. 1. Risk Tolerance Per Trade: (Account Size) % Willingness to Risk = Risk Tolerance Per Trade Example: ($2000) .005 = $10 This is like saying with a $2000 account our max risk per trade is half of 1% which is $10. 2. Dollar Amt. Per Pip: Risk Tolerance Per Trade DIVIDED BY # of Pips Risking on the Trade = Dollar Amt. Per Pip Example: $10/50 Pips = 0.2 or 20 Cents Per Pip This is figuring out how much money you will make or lose per pip on any trade you execute. 3.How to Calculate Your Lot Size: (Dollar Amt. Per Pip) 0.1 = Lot Size Example: (0.2) 0.1 = 0.02 This is like saying to make or lose 20 cents a pip I need to use a 0.02 lot size on any trade that I execute.
— In the live trading room we concluded to move the stop loss to: 1.97117 and the take profit to: 1.88980 in order to make room to scale in if needed. Just as a reminder this is a long-term trade and should be treated as such. It may take weeks for this trade to close and will subsequently make or loss hundreds of pips.
— I added another order to my position. You may use the original stop loss and take profit!
— I reevaluated this trade this morning and I can see that the GBP/AUD appears a little more bullish now on a daily chart so I closed my two orders and have switched directions to go long. I'm going to use our trade recovery technique to fix this trade. I will explain more how this works in our webinar tonight but for now I have a few orders that I have placed in order to make this possible. I went long with three micro lots at: 1.92895 with a take profit at: 1.94944, and a stop loss at:1.92148. I also have four pending sell stop orders with a .01 lot size each at: 1.92175 with a take profit at: 1.90609, and a stop loss at: 1.92897. The above sell limit orders will be used and executed if the buy positions don't work out. The idea is that the sells should execute about the same time that the buys close at their stop losses. Another reason for doing this has to do with the fact that there is some uncertainty with Brexit coming out this weekend.
— Our long orders closed at their take profit this morning each making over 160 pips each each! Yesterday, we booked the loss on the two sell positions for a loss of -43.8 pips. We lost -62.5 pips on the first sell position and made 18.7 pips on the second order which gave us a total loss of -43.8 pips from the sell positions. The three long positions closed as follows, long # 1 closed for a +165.5 pip profit, long # 2 closed for a +166.3 pip profit, and long # 3 closed for a +165.6 profit! This gave us a total profit on the long positions of +497.4 pips. If we take the total profit of +497.4 pips from the longs and subtract the total loss from the sells of -43.8 pips we get a net profit of +453.6! Please refer to yesterday's live trading room if you have questions about this trade. You may also bring up your questions in the War Room tomorrow morning. You are also welcome to email me if you questions and concerns.