Forex : 13th June

I was in one of those damned if you do, damned if you don't scenarios this morning.  The GBPUSD option trade has come back into the money BUT there is only a weekend and a bit left before the option expires.  Had this longer to run I would have kept the position but working on the maxim that the first rule of trading is to not lose money I decided it was time to close it out.

So the position closes at a 0.30 R profit illustrating the benefits of options - this trade spent most of it's time being a loser but, without a stop loss to hit, ends up a (marginal) winner.  It also highlights the disadvantages of options in that winning trades make less money and that time value keeps chipping away.  The final thing to note here is that the spread is in the order of 10%.  That is a bit too high for my liking so I will probably trade this style of signal as a physical rather than a derivative from now on with an occasional sold option tacked on to add a touch of spice.

The other trade to close was EURUSD short - This highlights why simple is often best.  You can get a lower win rate like this but at Risk : Reward of 1 : 3 you can make plenty of money being right less than half  the time.

Disclaimer
I am not a financial adviser.  These are paper trades.  I am not suggesting you follow these signals.  If you take any action based on my blog you do so at your own risk.