There is a lesson to be learned from this break-even AUD-CHF trade: currency pairs with small intraday range produce a LOT of false signals, as far as day-trading is concerned. This is something I have noticed over and over again.
Can you please explain this statement you made "There is a lesson to be learned from this break-even AUD-CHF trade: currency pairs with small intraday range produce a LOT of false signals, as far as day-trading is concerned." The reason I ask you this is because you traded AUD-USD and won and then took AUD-CHF and lost - followed up by mentioning that there's a lesson to be learned - Both pairs have just about the same intraday range using the ATR. So my question is how come it was ok for you to take a trade on the AUD-USD pair but you we're disappointed in the AUD-CHF trade when basically they share the same range? Please explain - Thanks!
Hi, This has nothing to do with ATR. If a currency pair has a small intraday range when I get a trading signal it usually produces a false signal. To be more specific, if the intraday range is less than 45 pips or so (say from midnight to 8 AM, NY time) that means the trend is not strong enough that day (for trend-following systems), and a reversal is possible. In that scenario I move the stop to break-even as soon as possible, or I abandon the trade at the same price, if I still can.
This thread has been neglected for over 4 months now (due to family problems). But business is business, so let's get back to it, shall we? i am currently short AUD/USD at 0.7765, 26 pip stop. Australian CPI and Trade Balance coming out in a few hours, and my position is pretty "heavy", so behave, Aussie!