Although my main strategy is the ranging strategy, i.e. buy when the price is at the range lows, or sell when the price is at the highs, occasionally this strategy can turn a trade with the potential of 20-50 pips into a an even better gain when the price breaks out of a range. This is off of a 15 minute chart for EUR/USD where I went long on Eur 126.91 in the hopes that it would bounce up from the session low to the 127.40 previous high. I was in this one for about 2 hours and even refused to take a profit of 30 pips when it went in my direction the first time and even saw it go back down to 126.79 (-19 pips against me), but a bit of patience paid off as it pulled up, moved past 127.00 and then sailed past 127.40 to go all the way to 128.24. I set my stop at 115 pips (out of 130), on the chance that it would break past the 128.20 resistance zone (which would be a true breakout on the hourly chart) but it didn't and retreated back below 28.00 once the market took my stop at 128.06. Not bad for 3 hours of work. As always, when I conclude a trade like this, I log out, and take the rest of the day off, lest I be tempted to put my profit on the line while I'm a bit giddy with success. Nice to end the work day at the time I would go for my first coffee break in my previous job. Mmm...coffee.
I have been struggling as of yesterday and took on more losses than I care to admit, but I'm still here and I've re-learned the lesson that I keep learning every few weeks or so; bucking the trend continuously can be ruinous to your bottom line. On some days, I can get an idea stuck in my head -for instance buy on the low or sell on the high - and I'll keep doing it despite evidence and information that argues against an entry. I think I'm still dealing with my own psychological issues with regards to being a bit arrogant and firm in my ideas, when this is a game for neither characteristic.
The Bollinger bounce is a great way to get started if you enjoy being right most of the time, but this strategy cannot be blindly followed - something I do without thinking about on occasion, the kind of days when I don't review my rules and strategies prior to trading, oddly enough. The last hyperlink is courtesy of Baby Pips, which is a fantastic resource to use if you have some experience with forex, but I extend my endorcement to a must read if you are a beginer (like myself). The basic idea is to buy or sell when prices go outside of the ranges, where the bollinger bands provide you with a visual representation of those ranges on a chart. Often this can be viewed as going against the trend, but there are ways to use it with a lot of success, for example, using the bollinger bands as an entry point in conjunction with a larger trend. For example, if you trade off of a 15 minute chart (as I do), and then take a look at the hourly chart (which I have in the background), you can see an hourly trend, then look to get into it using a 15 minute chart to find your entry point. So in effect, you may be going against a fifteen minute trend, but in synch with the hourly trend. Used in combination with Fibonacci Retracements and Pivot Points, you can put the odds in your favour. Did that today, and although I entered twice on a GBP short vs the USD, first deal I got stopped out with at 10 pip gain, the second time around wourked out nicely with a 95 pip gain. Although I did not magange the deal to the best of my abilities, left more than 40 pips on the table, and I'm kicking myself for not going in with 2 lots as opposed to 1, I am content to have undone some of yesterday's damage.
In other news, RIM went all the way to 66, but is now consolidating back at 63. I'm curious to see if it will go anywhere near 80 in the next few weeks. In addition to RIM being a great company with a fantastic product (I love my T-Mobile 8320 Curve Titanium), and the seeming appearance of a bottom in stock price a few weeks back, I've heard that Apple's issues with Steve Jobs' illness, may be a factor in the appearant reversal in RIM's price.
