The Wisdom of Experiencewhich is quite lucrative for a 5-pip cost. If the currency pair has a
wider spread, I will usually look to make more pips than that.
Q:Whatisyourstopusually?
A: It really depends on whether I am looking for a shorter-term
or longer-term trade. But usually what I like to do is to exit in
increments. If it moves 75 to 100 pips, I might stop out a portion of
the position, if it continues to move another 75 to 100 pips, I might
exit another portion and so forth. I really like this exit strategy,
and it is something I have only started using in the past 10 years.
However, I only do this when I still believe that my directional bias
is correct. Keeping a portion of the position allows me to retain the
ability to turn this trade around. I have used this technique in the
past year and it has worked out for my trades on many occasions.
So I may put one stop at 100 points, another at 200 points, and
another at 300 points.
I do the same thing with profit targets. I will begin to slowly take
a portion off the table in increments. If I make 100 pips, I may close
out a quarter of my position, if it moves another 100 pips, I may
take profit on another quarter and so forth. This basically prolongs
the life of my trade in the market which I think is important for
trend trading.
Q: So it seems like you always trade in multiple lots then?
A: Yes, I have quite a bit of speculative capital dedicated to trading
currencies. When I trade and have confidence in my analysis, I may
put my entire speculative capital into the investment but manage
my exits more aggressively by spreading them out.
Q: When you trade, do you usually focus on one currency pair
at a time or will you hold positions in multiple currencies?
A: I usually trade one currency pair at a time because if I trade
too many, I will not be able to focus on my positions. So if I am