Back to live trading after an exhausting couple of weeks that introduced 7 new hotel rooms to our business. For the extent of the renovation See the hotel blog.
In trades, we started this week with a day of back testing. We then missed a trade day and later in the week had to change our normal routine to a later trade start of mid afternoon.
The late start provided a different challenge. You will know of the interest rate change and the sudden effect this news had on sterling. Our trade start time this week was after the interest change news and, therefore, after much of the action had already taken place.
The reduced activity in the market after the interest rate exhaustion meant that we needed to reduce our chart bars from our usual 5, 3, 2 or 1 minute bars down to 23 second bars. At 23 seconds we could get a read on the chart. The issue now is finding a trade that provides at least a 16 pip move, our smallest scalp in the GBP USD chart.
Working the 23 second chart is rapid. Strategies have to be clear and decisions decisive. Miss the exit signal and the chart is away from us into ‘no man’s land’ before we know it.
From that experience this week (Thursday after the UK interest rate decision and Friday after the USA non-farm payroll) we have introduced 3 brief but important points to our strategy page on exits.
If we hadn’t traded the 23 second chart the exit strategy points may not have been as defined or obvious to us. Using these same exit strategies in the higher time frame charts, which we will do this coming week as our routine is back to normal, will minimise unnecessary loss and sharpen profit taking.