For any of you that are unfamiliar with the term Cable it is often used in reference to the GBP/USD pair.  I found this explanation for it online:

Transatlantic cables are cables that have been laid along the ocean floor to connect North America and Europe. Before the advent of radio, the only means of communication across the Atlantic Ocean was to physically connect the continents with a transatlantic telegraph cable, which was operative in 1867. The exchange rate between the United States dollar and British pound is still colloquially known as “cable” by financial marketeers on account of the fact that the rate was originally transmitted via a transatlantic cable.

I am not sure if this is the actual reason but sounds reasonable to me so I will go with it anyway.

I recently read a book buy S&P trader Larry Levin called emotion free trading, this is only a short book and makes some really valid points about trading and some new ways for me to approach it. One of the things that really got me thinking was just how much Larry stresses taking profits, limiting risk and mange your risk and emotions.

His ideas here really got me thinking about trading the lower time frames and how I have always struggled with it and thus I trade the higher time frames instead. Larry talks about moving stop losses to break even as soon as is feasible. Now this has always been an issue for me as I see so many times price come back and retest my entry level and then go on to reach my profit target.  But what Larry says is very valid, better to get stopped out than take a loss.  This is extremely true as the only thing we have any control over in trading is our risk and by doing this we can mange our risk very aggressively.

When I think about it, how many great traders have stated that the best trades go your way straight away and never look back and that made me think hey if you apply this to your trading you are only targeting the best trades and that is what I have started doing.

I figure since the Cable is the main currency that I trade then I will start a new category named after it and start recording my research here.  My testing that I have done on ForexTester2 to date is looking very promising.  The testing that I am doing is based on trading the cable on the 15 min time frame and using Pivot Points for support and resistance. I have only covered 18 months worth of data but am happy with the results so far. This is still a lot of ground to cover as we are talking 390 days of trading so far.

This is still not enough for me to commit money to yet but my plan is to finalize my testing and then go live with the new strategy if it continues to show the same and consistent form.  I have attached a chart of the equity curve to date for your perusal and as you can see the results do look very good so far.

click image for larger view

Trade Well

Perry

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