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Lessons Learned on a Slow Day - EGM Trading Room
On this fourth day of the live Explosive Growth class where Casey has been showing us his live market trading tactics, having had our coffee (I hope we all had our coffee – at least no one died), we started looking at the charts and identified a few possible trades that were setting up. Things were moving a bit slowly so Casey did some teaching about trend channels and support/resistance as he analyzed various pairs for opportunities. We also learned a couple of “quick tricks” built into the MT4 trading platform:
Shift-CTRL Drag to put all your closed trades for a certain pair on the chart.
Double-Click, CTRL Drag a trend line to make a parallel duplicate of the line.
The USD/CAD Proves to be a Little Difficult
Eventually, we entered a long position on the USD/CAD as it hit significant daily support, looking for a bounce, but the support broke and put us into Three Bullets mode (our first position went negative.) After some dropping and popping most of us were able to get out of the bad position with a gain. Of course, many of us took a loss on the original position (I closed mine at -10 pips), but washed out that loss with other bullets (I opened/closed two bullets for +20 and +6 pips) for an overall profit on the trade.
We Learn a “Pending” Lesson
One important point we learned was at poor Nathan’s expense. He had been trading the GBP/USD yesterday and got a bit negative on his first position. With the Three Bullet strategy in mind, he placed a pending order at a support level for an additional bullet. The GBP/USD then turned and hit his target – but he forgot to close the pending order. During the night the market dropped, picking up his pending long, and then dropped quite a bit more. He woke up this morning with a very negative long GBP/USD position with the market dropping. Well, the good news is the market didn’t continue to drop and he’s in the process of washing his way out of the bad long. But the real lesson is this: if you use pending orders to get the best prices, be sure to close them when they are no longer valid. I’ve made this very mistake a few times in my trading career, so I check all my orders before I walk away from the platform – kind of light checking to turn off the lights as you leave a room. You do it often enough and it becomes habit.
Protect Yourself When Using Pending Orders
There are a couple of other things you can do to protect yourself too:
Set an expiration date/time on your pending order. If you’re scalping, you can probably set a one hour expiration on the order. Of course, keep an eye on it so it doesn’t expire about 30 seconds before the price hits that level.
Set a very tight stop loss on the pending order. If you are at the console when the order hits, you can move the stop loss to the correct spot. If you’re not at the console, you’ll get out with a minimum of damage. A ten pip stop seems reasonable. You don’t want to build in a ten pip loss, so it’s best to close it before you leave, but if you forget, at least you won’t kill your account on an unexpected news move.
We had a few other profitable trades for a slow, but successful day of trading.
