A Look Back At Forex Trading - 3/28/06

A Look Back At Forex Trading - 3/28/06
We are starting to sound like a broken record, but Cable is in a very tight trading range. It is really difficult to make profit targets when the daily range is less then 50 Pips.For most of the day it was less than 40 pips. With that said, once again we were perfect with our entry, which was 1.7490. The most the market went against us was 3 pips, and with some good exit strategies we were able to take a 30-pip profit out of a very tough day.This brings me to an interesting subject that we will discuss today.When the market gets as tight as it has been over the last couple of weeks, it calls for some minor adjustments to be made to your personal trading strategy.One adjustment I am making and would like to put out to our subscribers is that until the market shows an increase in the daily range I am decreasing the maximum allowable stop loss from 40 Pips to 30 Pips.This is not just something I came up with out of the blue, there are reasons and rationale for this adjustment that I would like to share with you and get you thinking about what you could adjust in your own personal strategy.And please feel free to drop us an email describing your adjustment if you would like to share them. The first thing I looked at which will allow me the luxury of reducing my stop loss is that our entry's have been so good. Since our last losing day, 3/14/06 when our trade went against us for 40 pips, we have had only one trade go against us for more than 20 pips ( 23 pips on 3/15/06).Over the past three week had we used a static 30 pip stop loss, it would not have stopped us out of any trades, and it would have reduced our losses by 25%.This also allows us to move our profit targets down and still maintain good risk to reward ratios. We must move our profit targets down due to the small daily ranges.Had we used a 30 Pip profit target as the first target using 1:1 risk to reward ratio we would have closed four additional trades from 120 additional pips. Just a thought I wanted to share.Cable is definitely in consolidation, and is right where it was at this time last night, its banging up against resistance right now trading around 1.7460.This resistance is pretty strong with multiple levels in a tight region, which goes from 1.7460 all the way up to 1.7510. Consolidation should be expected to continue for the next few days with the early bias on the up side, but if the resistance holds below 1.7510 we will expect the price action to resume its downward move towards 1.7048.As we discussed previously, this is a very tough market to make money in. The daily ranges just get too tight to be able to get in trades and hit profit. Making minor adjustment to your personal trading technique is imperative in this type of market if you expect to continue making profits.Getting the proper forex trading education, to be able to recognize that adjustments should be made, and more importantly understand how to make those adjustments, is the best way to survive and thrive in this or any kind of market. Learn to be an independent trader and control your own future.We find these support and resistance levels using a set of technical indicators and other variables that we have found to be most successful for us.We use several other indicators and a variety of technical analysis techniques to enter and exit all of our trades.Every trader will have a different combination of indicators that makes the most sense to them.Learn how to develop your own successful Forex Trading style by getting a Forex trading education. Regardless of whether you choose a Forex trading course or Forex seminar, you must hone your skills before losing your money.