DislikedIn a chat I participate in there's a fellow who trades like this. I'm not sure if it's his execution or the style but he takes on losses that he doesn't have to like a dance routine. I haven't logged his trades but his losses reduce healthy portions of recent profits, sometimes as much as 30%. Part of me thinks it's because of over leveraging but the other part thinks it's also from not having a clear understanding of the size of move it would take to actually crap out his account too.Ignored
If you review the recent change in trading rules introduced in the past 10 or so years, most of them are aimed at discouraging traders to benefit from temporary price fluctuations and arbitrage trading. Banning Counter Trades (so called "Hedging") and enforcing FIFO in some countries was the biggest blow. These tactisc helped traders in keeping track of their trades and the market flow at the cost of paying double spreads, plus, they remained immune to a great degree from spikes and surprise "WTF" moves. It allowed them to keep their risks and rewards within their tolerance limits. They were happy in paying the cost for these benefits.
This is not the market where you speculate, enter and wait. There are so many factors affecting currency prices that one has to keep on hunting small profits, also taking small blows. You can also swing trade, but that has a risk of losing most of your gains in one night while you are asleep. Setting stop losses is another issue in this volatile market.
If one wants to carry only a few trades based on speculation, has not only to comprehend the structure and behavior of this market and selecting certain factors or market behaviors but also needs to be right in his/her speculation.................................. and no one can confidently speculate this market, at least in current times.
The Thief of Wall Street