Placing Your Own Trades: Ask the Expert

Placing Your Own Trades: Ask the Expert
Harborx app is perfect for beginners as it lets you start trading easily by following Star Traders’ recommendations. Yet, eventually you might feel a bit bored simply following recommendations and ready venture out by trading independently. But how?
We asked Christala Parmaxi, Harborx Investment Analyst, CTFe and a frequent contributor at, about everything you should know while placing your own trades.
Christala Parmaxi, Harborx

Christala Parmaxi

If I have followed a recommendation on Harborx and it’s winning, should I place more trades based on this trend? If so, do I keep ‘Stop Loss’ and ‘Take Profit’ as defaulted by the app or set them manually?

You can follow a recommendation as many times as you like, and, as technical analysis shows, more often than not, a trend is likely to continue (unless it’s about to end). So yes, increasing your exposure to a winning trend is certainly a strategy that is being used by traders. However, you need to always have in mind that the market can go against you anytime, so do not go wild and never invest more than you’re prepared to lose. That said, there is also another rule: “risk diversification”, and it goes totally against this strategy. If you are about to enter the same position multiple times, make sure to protect yourself either by changing the Stop Loss/Take Profit levels so that you lock some profit on some of those trades or diversify your risk by entering trades on more instruments. As a bottomline, it all depends on the risk appetite of the trader.

What’s the good Stop Loss and Take Profit?

Harborx app lets you set Stop Loss and Take Profit 100 pips up and down from the current market price. For Recommendations, Star Traders set the SL and TP levels manually based on their opinion after analyzing the instruments. If you like the trading style of a Star Trader, then it’s best to keep their TP/SL. However, you can always change them if you want to.

Coming back to the app’s default TP/SL within 100 pips, it’s best to set them to your desired gain/loss. You can see the amount in Dollars that you will win/lose when you are setting your TP/SL, so you can estimate your potential profit and loss and not be caught by surprise. Now if you feel like a pro, you can analyze the market yourself and set those levels according to your understanding. There is no such thing as one proven ‘best SL/TP’. For each trader and situation, it’s different. Your best SL/TP depends on your risk appetite. While for some traders the best risk to reward ratio is 1:1, for others it’s 1:2 or 2:1. There’s no right or wrong.

If I see that a trade is going well, is it a good idea to open the same one, but with a higher lot volume?

This is very close to the previous question. When you increase your lot volume, you increase your exposure, meaning that you can win more, but you also expose yourself to a higher risk.
You can expand your trade on a single currency but make sure that you can take the double loss in case it turns against you. It may be a good idea to close the first trade in profit (so you have already secured some profit) and then open the second one. This way, you’re less exposed on the same instrument.

There is also the trailing stop loss technique which can help traders avoid losses. A trailing stop loss is moving according to the market price fluctuations, coming closer to to current market price if the market is moving in the same direction as your trade. Thus, as the market is moving in your favour, you can tighten your SL to tight your loss if the trade goes against you, either on one trade or on both of them.

Can an open trade give us clues for other trades? For example, if I’m winning while selling EURUSD, does it mean it’s safe to sell EURGBP?

In fact, there are interesting correlations between several pairs. Of course, EURUSD affects EURGBP, but you also need to have a look at GBPUSD chart to make sure that they are moving in the same direction. For example, if EURUSD is moving down and GBPUSD is moving up, this seems like a perfect case in which you can sell EURGBP as both of the counterparties are boosting the pair to a downtrend.

Furthermore, there are correlations due to the nature of the economy of some countries as well. For example, Canada, Australia and New Zealand are trade-based economies and are affected by similar factors. The Aussie, Loonie and Kiwi are all called commodity currencies due to the high influence the commodities have to them. Usually, you can see Aussie and Kiwi moving in the same direction and Aussie and Gold too as Australia is one of the top producers of gold. You can always search about more correlations on the web.

If my trade, sell EURUSD, is winning, how do I know if it’s the Euro falling or the USD growing?

You can have a look on the charts to check if Euro and the US Dollar are falling/rising against the rest of their counterparties. For example, if EURUSD is falling and EURGBP, EURAUD etc are falling as well, then it’s most likely the Euro that is moving the pair. Moreover, you can also check the news and what is happening to the world and those countries. A sharp trend is usually based on a major fundamental release or a change in the country’s policy.

If we know that one currency is growing in relation to another, will it have the same trend in relation to other currencies? If Euro is growing in relation to GBP, is it also growing in relation or AUD or USD, for example? How do we know that?

The currency that moves a pair, is usually the stronger one. If Euro is strong and grows (appreciates) it needs a stronger currency to depreciate it against it. For instance, a strong currency after a good economic release will drive its counterparties to the downside while the currency itself will appreciate. The only case that a counterparty is reluctant to fall against a strong Euro for example, it’s when this currency is even stronger than Euro at this period. You can check the charts trend to verify if Euro is on an uptrend against all of its counterparties or not to verify it.

What are the signs that I should close my position?

It is a good idea to build your strategy before you get into a position and just stick to it, unless you are pretty sure that your analysis was incorrect. But make sure that your psychology over a losing trade does not create the impression of a mistaken strategy, remember that we are much more rational before we get into a trade than after we see it losing. Now, if your trade is winning and you are looking for a sign to close it, you better stick to your first Take Profit. But if you are happy with the current profit that you see, you may close it manually. Again, the first impression is usually the right one. You can also have a look at other pairs to verify if the counterparties of your trade are moving accordingly against the rest of the majors as well; if yes, that’s a verification that you’re on the right track.

Summing up, trading on your own takes patience, dedication, curiosity and desire to learn, but once you get into it, it’s also a lot of fun.

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  1. Right in time for me. I have recently switched from recommendations to my own trades and was wondering if there is a magic ‘one fits all’ solution for placing ‘stop loss’ and ‘take profit.’ It’s both sad and exciting to know that it doesn’t exist and as traders we have to make decisions every time.

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