18 pips in EUR/USD on a Sunday evening

Currencies and the futures start trading Sunday night, so its fun to check in and do some trading. I made two trades tonight for 18 pips. I was using my 2 minute/10 minute setup, trading on the 2 minute but in the direction of the 10 minute.

It looks like the Euro is going higher and both of my trades were long since that seems to be the natural direction.

In this case I made a whopping $37 because I was only trading $20,000 worth of currency, but that's almost a 10% return; $400 to purchase $20,000 worth. Not bad for an evening's work! I had the TV on watching Iron Chef and would just check in on it. However, the main point is that I've advanced from 10,000 to 20,000. This is how it works, tiny little steps to incrementally be comfortable with a tiny bit more risk.

Its tough trading small swings when there isn't a lot of volatility. Although the spread on the platform I trade on (TDAmeritrade) is pretty tight, 2 pips or so, if movements are only in the 10 pip range it can be difficult to get much, because you never get in at the bottom or the top. In this case I traded on the 10 minute ranges, which were larger, using 2 minute entry points, and did ok.

I wonder, though, if I shouldn't be focusing on longer term time frames with currency and go with trading over spans of days and get comfortable with those. The mechanics of the technical analysis work the same, and if I can get comfortable with longer time frames the potential money is much larger, 500 pip swings over the course of a week. The key is being able to comfortably deal with the losses from the stops. Right now it looks like the Euro is in an uptrend over the last few days. A buy signal on the stochastic was generated 2 days ago and its up 100 pips from then, although the stop was 120 pips down. Am I ready to lose 120 to gain, well, 100 at this point. The last sell cycle gave 350 pips during its run with a stop at 250 pips above.

It looks like the current run has longer to go. The thing is if I start swinging currencies I can't trade the one I'm swinging because I'll have a position, although I could trade one and swing another -- you can have multiple positions on in different currencies.

I think maybe I'll just gradually increase the time frames, that would be a good incremental approach. Trade on 10 minute time frames, then 30 minute, etc.