This trade looked really good this morning after durable goods data was released; click here to see the original trade setup.  With GDP numbers scheduled for tomorrow I felt this trade had a chance to run Dollar to the bottom of the descending channel. Unfortunately the predictions of larger correction in Dollar seem to be holding true and the market found good support along the $1.4660 line.

I usually don’t post where I put my stop orders for three reasons:

1. I don’t want to influence you to take on more risk than your account can handle if my stop is to big.
2. I want you to create your own stop techniques, every trader needs their own style and there are many options for placing stops.
3. For me stop orders are the last resort in risk control, I don’t stick to them if other factors tell me to get out early.

This morning is a good example because my trade setup depending on the market holding below the trend line that had broke across the descending channel.  When the market closed above this trend line the trade was invalidated and I closed out my position early. There was no reason to wait around for my larger stop to take me out.

If you are new to my blog and wondering why I let a 50 point trade turn into a small loss I encourage you to read my recent post which discussed fixed stops vs. trailing stops. I’d love to hear your opinion on it.

This week has been somewhat frustrating because I missed the NZD/USD long off the ascending channel around .6950 and right now the pickings look slim. We still have two more trading days so stay tuned!

Ryan