AUDJPY At 100 Pips

So, if you followed the advice in my last post you'd be sitting pretty with some AUDJPY carry trades profitable to the tune of 100 pips.

So, while I'm sitting on a nano-account, if things continue to go up I'll be able to accumulate more and more position at very little risk. Why? Because all of my positive positions have a stop loss set at a point that ensures that I cannot lose money on those positions.

So, while I might be stopped out of my carry positions, I can always add one more small chunk to my holdings once the last has become positive. It's great. Using my locked in profits I can afford to hold more and more carry positions until the market reverses again. It could be in an hour, perhaps tomorrow when the DOW trades, or next month.

Until then... I'll happily accept my interest payments. Cha-ching.

Riding the AUDUSD Upswing

I've been riding the recent AUDUSD increase.

Now, I have some competing issues on my mind. As the AUDUSD hits new highs I have to worry about corrections. However, if this instrument is going to continue rising, I'd hate to not maximize my participation. See my previous post about having to play to win.

Anyway, while a more experienced Forex trader might not have to "figure this out", I've finally stumbled on a strategy that I like.

As a current position moves into some level of profits I'll slap a trailing stop on that position. This locks in some quantity of profits, at my choice, that I can relax about no matter what happens in the market.

With that profit locked in, I can enter a new position and immediately set a (trailing) stop on that as well. This new position can have a total risk less than the locked in profit above though it doesn't have to. In any case, this lets me choose the risk level I'm taking.

If the new position gains enough, I can adjust the initial trailing stop, if desired, to lock in more profits, and then open up another position. This way I can ride an up trend with increasing participation while having any losses limited to a precise value on a single open position.

Of course, this can be modified, if I feel like being riskier, but since we are near recent highs I don't feel like taking larger bets.

New User Mistake

Well, don't do this!

I fell asleep last night before putting a loss limit on my USDCDN position. I could have lost my entire account balance if something disruptive had happened. Bad investor, bad.

However, upon dragging my sorry behind to the computer, with much trepidation, I found I was in the positive. So far, FOREX is my friend. I know the shoe will be dropping soon... especially now that I've been reading up so much and know how clueless and careless I really am.

B USDCDN 1.0554 S USDCAD 1.0560 +1.42 (TL)
B USDCDN 1.0545 S USDCAD 1.0595 +0.47 (TL)

Anyway, when I noticed I was in the positive I promptly put on a trailing stop, which theoretically allows me to continue to profit in a rising market as long as keeps rising. Of course, the market promptly dropped and my orders were executed at prices that kept me in the positive.

Fun stuff.