For my Forex trading, I tend to use a breakout from consolidation as a means of entering the trade in the direction of the trend. This captures the initial upsurge in momentum which is needed to get the trade into a free trade quickly.
I set a stop of 20 pips and a target of 22 pips on every trade entry. If my trade gets to 10 pips in profit then I move my stop to break even. This way I am in a free trade - no matter what happens I can't lose anything but I can still make my 22 pip target. If the prices start moving quickly and irratically more in the direction against my trade I may take a small profit of a few pips or more if it looks I will get stopped out at break even anyway.
I have learnt twice from bitter experiance - never never never ever ever trade Forex during UK office hours - as a miniscule amateur trader the sharks will eat you alive. All the nice little gains you make in the before and after hours sessions get taken back in no time. Some examples are presented below of such results.
Please note that the results presented here are using risk control and money management techniques but the leverage I am using is far outside what anyone would recomend. This is because I am starting with a very small trading account balance - £100 to start with a spread betting account. I am risking £20 per trade which equates to 20% of my account balance or 10 times the normal recomended limit. This is because I am comfortable with the small amount I am starting with and the percentage of winners that I know I can achieve trading the hours that I do. To get this level down to 2% I would have to trade through a Forex broker rather than through a spread betting company. I find it much easier to set up accounts with spread betting companies than with brokers hence the situation. You could say that I am trading with a virtual £1000 trading account risking £20 per trade but only starting with a £100 trading account balance.
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