If two signals appear at the same time, which trade do you take?

C

Castlemain

Casual Member
If two signals appear at the same time, which trade do you take?

This must be a dilemma that price action traders face all the time. I have solved this problem by changing my rules to exposure as follows:
  • Maximum risk of 1% on any trade

  • Maximum risk of 2% on any currency

  • Maximum risk of 3% on any currency if one of the trades S/L is moved to break-even

  • TOTAL maximum risk of 4% on any currency if stops are moved to preserve a minimum of 300 pips profit.
I am now able to have multiple trades open at any one time. Here's a snapshot of my current exposure (paper trading).

Pair Date Timeframe Signal Direction
EURJPY 02/10/15 D1 RC LONG
GBPJPY 02/10/15 H4 RC LONG
AUDUSD 02/10/15 D1 IDB LONG
AUDJPY 02/10/15 D1 RC LONG
GBPAUD 02/10/15 D1 RC SHORT
EURGBP 05/10/15 D1 RC SHORT
AUDNZD 06/10/15 H4 BOT SHORT
USDCAD 08/10/15 D1 RC LONG

Currency exposure:

AUD: long 3, short 1
CAD: short 1
EUR: long 1
GBP: long 2, short 1
JPY: short 2
NZD: short 1
USD: long 1, short 1


This is a massive advantage to me in terms of dealing with fear. Up to now, I have fretted about single trades with a 2% exposure, with a tendency to close trades out early. Now, with a maximum of 1% on any individual trade and with multiple trades in play, I am preoccupied with my total overall position, taking a much more objective view of any single trade.
 
Last edited:
T

takumi

Forum Newbie
Dear Castlemain,

I was pondering this the other day.

Good recommendations/structure. I will try it out.

Thank you

Castlemain said:
If two signals appear at the same time, which trade do you take?

This must be a dilemma that price action traders face all the time. I have solved this problem by changing my rules to exposure as follows:
  • Maximum risk of 1% on any trade

  • Maximum risk of 2% on any currency

  • Maximum risk of 3% on any currency if one of the trades S/L is moved to break-even

  • TOTAL maximum risk of 4% on any currency if stops are moved to preserve a minimum of 300 pips profit.
I am now able to have multiple trades open at any one time. Here's a snapshot of my current exposure (paper trading).

Pair Date Timeframe Signal Direction
EURJPY 02/10/15 D1 RC LONG
GBPJPY 02/10/15 H4 RC LONG
AUDUSD 02/10/15 D1 IDB LONG
AUDJPY 02/10/15 D1 RC LONG
GBPAUD 02/10/15 D1 RC SHORT
EURGBP 05/10/15 D1 RC SHORT
AUDNZD 06/10/15 H4 BOT SHORT
USDCAD 08/10/15 D1 RC LONG

Currency exposure:

AUD: long 3, short 1
CAD: short 1
EUR: long 1
GBP: long 2, short 1
JPY: short 2
NZD: short 1
USD: long 1, short 1


This is a massive advantage to me in terms of dealing with fear. Up to now, I have fretted about single trades with a 2% exposure, with a tendency to close trades out early. Now, with a maximum of 1% on any individual trade and with multiple trades in play, I am preoccupied with my total overall position, taking a much more objective view of any single trade.
Click to expand...
 
TheForexGuy

TheForexGuy

Forex Mentor
You can also split your risk up if two trades form at the same time. Instead of risking $500 on one trade, you could split it, risk $250 on the two trades and not break your money management rules.
 
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