Order Entry – Small Orders Over Time

If I would have “bet the farm” on my short USD trades some days ago – I’d be fairly deep under water. The USD has continued to rise in the face of rising equity prices – and for the most part will likely have broken every “short USD” trade out there in the process. I don’t trade that way – I don’t “bet farms”.

Considering the weakness in JPY and the 9% account profits I’ve generated there – I can’t complain. Regardless….the point being – If you see a trade idea developing, and decide to get involved – place small orders in the direction of the momentum.

In the case of JPY for example – I had several orders waiting several pips “above” the current price action day-to-day. If indeed the momentum continued in my favor – more and more orders would be picked up – but more importantly – ONLY IN THE DIRECTION OF THE MOMENTUM. When looking to short USD I “had” several orders waiting underneath ┬áday-to-day price action with “hopes” of getting filled. As the USD continued to move against me – no problem as I’ve got next to no “immediate exposure”.

I had posted /suggested getting long the EUR/USD pair at 1.3170 some time ago. Well……I’m not going to enter the market at that level IF PRICE IS IN A DOWNTREND – why get involved when a trade is moving opposite your interests? But I “may” decide to take the trade once price action has turned – and I see the same value of 1.3170 – BUT WHEN PRICE IS MOVING HIGHER!

So – In staggering your orders, you afford yourself additional time to evaluate the trade – and access your ideas….without commiting such resources that the trade “must move in your direction or you’re toast”. Sure you might miss a pip or two but that’s not the point. Why get involved with price – when price is still moving against you?

Small orders over time – will keep you in the game….betting the farm won’t.

6 Responses

  1. illutionz March 8, 2013 / 10:30 am

    What position do you still have open right now? Just wondering.

    • Pot Stock Watch March 8, 2013 / 10:59 am

      I’ve still got a couple “short usd” positions via USD/CAD as well AUD/USD. Otherwise – I am hanging out more long commods vs JPY orders ABOVE current action after booking profits on the entire trade.

  2. rolo March 8, 2013 / 12:04 pm

    Great blog advice Kong – I’m learning !

    • Pot Stock Watch March 8, 2013 / 12:41 pm

      Keep on Rolo – that’s great. Keeping your orders small to start – (real small) lets you see/trade things in real time – and not run the risk of getting cleaned out.

      As well “nailing” an exact price level where things will turn is 100% totally and absolutely – impossible.

      Keep up the good work.

  3. Nfxtrader March 9, 2013 / 6:29 am

    Like the way you think. Wish you had this blog started 2 yrs ago. Would have saved me a lot of trouble. Looking forward to your subscription setup. My usd based shorts not going anywhere so far. Waiting.

    • Pot Stock Watch March 9, 2013 / 8:20 am

      Thanx Nfxtrader!

      Lots more to come here! We’ll see where we are at IN 2 years!

      So far it’s been alot of fun – also a pile of work.

      Thanks for the support.

Leave a Reply