One of the thing that keeps me amaze about forex market, or perhaps any stock market in this world is the behavior and its response towards certain news and sentiments. Really, you just can't tell how it will respond until it responds.
As an engineering student and electrical engineer who derives equations based on logic and purely technical calculations, I always stick to the rules that if A=1, B=1 and C=2, then A+B would always equal to C all the time, with some slight deviation and acceptable tolerance, say 5% for example.
But then, in this market where numbers and trends are purely based on human's reactions, it simply behaves the way it wants without any particular set of rules.
For instance tonight, I was on long position for the USD/JPY pair, waiting and anticipating good news from the US. It was indeed good news, in fact siginificantly beyond the expected figures.
My expectation is simple - without any doubt, this pair should go up...
Waiting for more than one hour now, the pair indeed moved a few pips up, and then it stays there as if nothing happened. And by the time I am writing this, it starts moving south already. This is bad. Today's low is at 94.34 and my stop loss is at 93.80. I don't feel good about this position, but I will need to assess the strength of the price movement before any decision can be made whether to hold or quit this position.
The point that I am sharing here is, careful with your expectation. The market hardly listen to you so play along the way the market behaves, not the way you expect the market to behave. The fact is they never behave... ;)
As a friendly reminder, the market is not your friend. But at the same time, they are kind of enemies that you can never fight. So, let us pretend to be their friend and do all the necessary things to our advantage so that they will never kill us. The rule says - if you can't fight them, join them...
Whether you agree or not, in this kind of friendship... you don't have to be honest... haha...
;)
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