Update to #GBPJPY - MACD Continuation - Explaining my approach.
Hey Traders,
Here is a prime example of why I have some tools to help me OPEN positions, and others to help me CLOSE them.
As we can see our continuation trade in GBPJPY has gone very well, smashing through target 1. (Check my other ideas for the original trade).
We are approaching T2. Now for me, T2 is not a rigid target like T1 is, if I believe momentum is in my favor I will have NO T2 and simply trail a stop behind the low of each daily candle until I am stopped, my goal is to capture as MUCH of the trend as possible, so I don't mind giving back some profit.
However, in this situation I want to take profit at T2 and then be out. As we can see here by the white line, we are approaching a point that has served as support and resistance many many times. We want to be weary of this level.
Let's say I didn't have a level of clear resistance or high volume, how do I know when to get out? Well, I use an exit indicator, specifically the TSI. I believe people traditionally use TSI to go long and short on 0 line crosses. I haven't found that to be very effective. But take a look at the red lines on the TSI which indicate +/-50, notice that a cross while over/under 50 seems like an excellent place to EXIT a trade you were already in. And I use it for just that.
I do NOT fade the market or reverse my position after a cross here though. The reason being is that the market still has momentum upward until sellers come in and prove otherwise. Traders who constantly attempt to call reversals and fade the market typically get REKT, trust me, I've tried it. A very fruitful career can be made solely on continuation trading, I suggest finding a method for getting in, create strict trade management rules that do not change, and find an exit indicator to get you out. Try to build your own human algorithm.
Best of luck traders.
Here is a prime example of why I have some tools to help me OPEN positions, and others to help me CLOSE them.
As we can see our continuation trade in GBPJPY has gone very well, smashing through target 1. (Check my other ideas for the original trade).
We are approaching T2. Now for me, T2 is not a rigid target like T1 is, if I believe momentum is in my favor I will have NO T2 and simply trail a stop behind the low of each daily candle until I am stopped, my goal is to capture as MUCH of the trend as possible, so I don't mind giving back some profit.
However, in this situation I want to take profit at T2 and then be out. As we can see here by the white line, we are approaching a point that has served as support and resistance many many times. We want to be weary of this level.
Let's say I didn't have a level of clear resistance or high volume, how do I know when to get out? Well, I use an exit indicator, specifically the TSI. I believe people traditionally use TSI to go long and short on 0 line crosses. I haven't found that to be very effective. But take a look at the red lines on the TSI which indicate +/-50, notice that a cross while over/under 50 seems like an excellent place to EXIT a trade you were already in. And I use it for just that.
I do NOT fade the market or reverse my position after a cross here though. The reason being is that the market still has momentum upward until sellers come in and prove otherwise. Traders who constantly attempt to call reversals and fade the market typically get REKT, trust me, I've tried it. A very fruitful career can be made solely on continuation trading, I suggest finding a method for getting in, create strict trade management rules that do not change, and find an exit indicator to get you out. Try to build your own human algorithm.
Best of luck traders.
I have closed my full position, as we approach this potential level of resistance (indicated by white line on chart). Now, if there is positive fundamental Brexit news, do not be surprised to see this resistance become support in the future, meaning some profits "could" have been left on the table. But for MY methodology this has been a perfect execution, in no way shape or form am I considering fading the market, GBP still is showing a ton of strength, however my targets have been hit and now I am on to other pairs.