Over the past week, I have been managing one position...a short Eur/Usd. It turned out to be a pretty decent trade that probably has more profit potential...however, booking profits seemed prudent right now. Total, the trade booked about 400 pips which is a pretty big winner for my swing trading. 100-200 pips is the standard size for winners.
The trade was a good one but I really wanted to blog about taking off the trade. For me, booking profits is actually one of the hardest aspects of trading. I have found that there are 2 methods that work for me. A trailing stop or a profit target. Quite often I use both. For this trade, my take profit point was 400 pips. It was tempting to continue to trail my stops but there is a high possibility of seeing a bounce. 3 day one direction moves usually get corrected. Furthermore, we had a fed day yesterday and it's options expiration week..both are events that can move the equity markets and in turn put pressure on the euro. Sometimes booking profits and sitting out for a bit is the best thing to do..as long as you fully accept that the trade "may" have been much more profitable had to left it on.
So what's the game plan? I do think the Euro could fall quite a bit farther, it will just be a matter of patiently waiting for a pull back and an entry signal to put the trade back on. This is likely a very crowded position and a good rally may shake out a bunch of the shorts and provide some fresh fire power for a move lower. We'll see.
TLT
The trade was a good one but I really wanted to blog about taking off the trade. For me, booking profits is actually one of the hardest aspects of trading. I have found that there are 2 methods that work for me. A trailing stop or a profit target. Quite often I use both. For this trade, my take profit point was 400 pips. It was tempting to continue to trail my stops but there is a high possibility of seeing a bounce. 3 day one direction moves usually get corrected. Furthermore, we had a fed day yesterday and it's options expiration week..both are events that can move the equity markets and in turn put pressure on the euro. Sometimes booking profits and sitting out for a bit is the best thing to do..as long as you fully accept that the trade "may" have been much more profitable had to left it on.
So what's the game plan? I do think the Euro could fall quite a bit farther, it will just be a matter of patiently waiting for a pull back and an entry signal to put the trade back on. This is likely a very crowded position and a good rally may shake out a bunch of the shorts and provide some fresh fire power for a move lower. We'll see.
TLT
