Dynamic Trader Forex Blog FXCPS.co.uk: Exposure.

Good Evening / Morning Dynamic Traders

"Better to have tried and failed, than not tried at all"

Cross = USDCAD : Day chart below.

Good morning guys, Welcome to another week in the markets. I had expected a pullback on Friday after the gains on the previous couple of days, however it never happened and even this morning price moves forward. Remember that nothing goes up, up, up or down, down, down without a breather. When price has it's breather those with tight stops sometimes get taken out of the market.

Those of you who like myself, trend trade will operate with larger stops to allow these breathers.

Last night our weekly webinar gave us plenty of insight for the week ahead and some potentials trade for us to set up and take. These webinars keep you focused for the week ahead, as well as useful widgets for your E Signal analysis and I know that many of you have made tremendous gains following our strategies. For those of you who do not participate in the "Dynamic Trader Trading Room" each Sunday evening, click here for more details

With so many winning trades at present it is essential not to get too carried away and trade everything that moves, we must remember our EXPOSURE.
Exposure is the risk (entry to stop) on all the trades added up that have NOT reached risk free status. So, if 5 trades, each using 2% risk have not reached risk free (Target 1), then that is 10% exposure. I am currently in 15 positions total, 3 are risk free so therefore are not in my exposure. the other 12 are split over 6 crosses, of which 3 are positive and 3 negative as I write. My total exposure is currently 12.8% which is higher than the 10% I try to stick too. Until some of my existing trades become risk free, I will not be entering any new positions at present.

So what other trades am I currently in ? Lets have a look at one of these which is the USDCAD.

We have a established downtrend, with the VI closing in on price from above. Price has in general kept between the drawn trading channels and recently looked like providing a breakout. The pullback before the attempted breakout provided an entry point for the Short trade. The VI provided resistance and added to this we had divergence on the MACD. As price headed down we waited with patience until our trade triggered. This trade is not as yet risk free and is some 50 pips short of my target.

Please do your own analysis before entering a trade.

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Trade with Passion

John Maher
Forex Analyst