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How to Trade the UK Election on the JFK AirTrain on Your Way To Madrid
1. Go with the Flow. When the news is shocking there is always continuation
2. Trade Small. This is important for two reasons -- one you will not freak when the trade moves against you by 50 pips in 5 seconds. Two you will almost certainly need to do multi-entry in order to get a good average price for a high probability profit. How small? My usual size is 1X equity ( i.e. no leverage) Today I started with 1/4 of my usual size.
3. Don’t worry about spreads. It doesn’t matter if they are 15 wide. They will narrow and prices will move 100 pips in 5 minutes.
4. Don’t worry about mistakes. (Hitting Buy instead of Sell, setting Stop rather than Limit, etc). You will make it back in the next 5 minutes
5. Don’t use stops. I know this is sacrilege but you will almost always get stopped out in such markets unless your stop is -200 pips or more. Your trade size is your stop. That’s why you trade small.
6. Use limit exits only. You will NOT get done if you try to exit market. The prices are too fast and you will be rejected 10 times in 10 seconds as coming off-market. It’s futile. Move your limits if you want to exit earlier.
7. Take a breath. Prices will come back to your direction even if you miss your first exit.
8. Once things settle down rinse and repeat. The news -- unless it changes -- will have ripple effects for hours.
9. Get a double espresso in the airport lounge and pre-set your levels while you are in flight.
10. Peace out to all my FX junkies.