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Tuesday, September 30, 2014

Lesson 4: Support/Resistance and Pulling the Trigger


Executing the trade:

Before even contemplating a trade the first and foremost point to consider is one of leverage. In other words, what size? Using the demo account as an example as shown in the last post, the account is $14,107.97. Ok our SL is 50 pips and TP is 110. What concerns us here is the SL. Leveraged at 3% it goes as follows:

14,107.97 divided by 100 equals 141.07, times 3 gives us 423.23 then divide by 50 and you get 8.46 (which is 0.84). Which you can see in the above charts.

A pending Sell Stop has been initiated at the last area of support on the 5M chart at 1.25690, with our SL at 1.26190 and TP at 1.24590. I should add here that all trades are set as pending just in case the PA fails to reach the appointed level of support or resistance.
On some occasions they do not and in which case they are either amended or deleted.

This trade meets all the requirements for the time being which are:

1. It (EURUSD) has a positive sell swap.
2. The PA is below the 100 SMA on all 3 timeframes.


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