Hi Darrell,
Sorry I was not able to get back to you yesterday, it was just one of those days!
<really enjoying what looks to be an unbeatable way of trading!>
Our trading is solid :) but not unbeatable. Or rather, not easy. Because of our position sizing and risk/reward always being in our favor (the least it is 2:1 on a given trade) our losses are always going to be smaller than our profits which means we recover from our draw downs quicker than they happen.
Because of our position size as well we can withstand a string of losses and have a very minimal draw down (if you are not using the correct position size start NOW!) and because we let portions of our profits run our gains from a signal pair can make up for losses from several pairs on a given trade. Sometimes newer members to the group wonder how we can have a target price of a few hundred pips thinking that is way too much, little do they realize that 1st order is us taking profits quickly and we are letting the 2nd trade order go much further if the market allows.
<Got so say, i really appreciate the amount of hard work you must have put in over the years. It's nice to finally meet a genuine good guy! I hope I can repay you one day.>
Thank you for that. Yesterday Greg told me that from the way I take care of the group that I am going to be a good father. Hearing that type of stuff from you all makes all the hard work worthwhile for me. Trading Forex is a passion so the hard work comes easy and the group brings meaning through the friendships and community which is rewarding.
<I'm still just a little confused on one aspect of the system. I know how we adjust the SL to lock in profits and understand that aspect perfectly, just wondering if I'm missing something.
Once we have TP on the first trade and adjust the SL on the second, at what point do we take profit on the final half of the trade? If the 2nd trade progresses by say 2000 pips do we keep moving the SL to continue to lock in profits or just let it ride?>
We do not take profits on the final half (order 2) until it is stopped out or we receive a new ZLC. We simply do not have any way of knowing when he trend will end in order to take those profits and it is safe to assume that most traders would be taken profits after just several hundred pip well before the trend has become close to ending. The current AUD/USD drop in positions are a good way to illustrate this.
It is only the most recent trade (4th on the chart above) with the stop at break even (entry) which if stopped out is not going to be taking additional profits however the prior three trades have all systematically continued to lock in further gains as the market trend continued and at technical sound points (areas where the market resumed out of a pullback). I am sure there could be a better way for us to handle this and maximize the full potential of our gains but so far this is the best I have come up with.
<I know we exit when we have a ZLC in the other direction but surely we will have lost most of the profits by then?>
The ZLC is always an exit since we can only be long when it is positive and short when it is negative as the true trend is giving us the direction of the trend and we do not trade against the trend. However, it is rare we have an exit from a ZLC on a Drop In trade without being stopped out first from a stop that has been moved to lock in profits.
Much peace, Jordan
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