The lessons here are :-
1. Always stick to your original plan and system.
2. Once you bended the rules, you start bending another and this is what happened.
I am talking about the GBP/USD pair movement yesterday, in fact since the past 3 days where if you look at the 1 hour chart closely (above, without any technical indicator), the market was actually ranging between 1.6270 to and 1.6070... making sharp reversal every now and then between these 2 levels...
These are the event chronologies.
1. I originally went long on GU @ No 1 @ 1.6210 with my stops set at 1.6110. My profit target was originally at 1.6310 but later I downgraded to 1.6260 @ No 2 (+50 pips). Guess what... It never hit.
2. The price later went down and against me during Obama's speech yesterday all the way to No 3 @ 1.6130, 20 pips shy from hitting my stop 1.6110. Base on the momentum, I decided to pull out at @ No 3 @ 1.6130 with -80 pips in losses... and you know what... it never hit that 1.6110 price. %^&#@%#$....
3. I later decided to went short @ No 4 @ 1.6153 with stops @ 1.6353 (200 pips!) and TP at 1.6053.
4. Again, cruelty upon me. The market went up against me all the way to 1.6274 before halted, making a few attempts to break that soft resistance at 1.6284 but failed. I was over -120 pips under the water and trapped in another decision making whether to hold or not to hold. Though my stop is 80 pips away but still I have this bad feeling that the market is going to attack that zone again. My judgment was clouded by fear... I knew by heart that if the price breaks that 1.6284 resistance, it could go all the way beyond my stop level.
5. Waiting and waiting and later the price went down for 2 hours below the 1.6250 level, giving me some sights for relieve. But later, once again the price making another attempt up @ No. 5. This time I decided to pull out at 1.6253. Another -100 pips in losses.
6. I surrendered my position again as it really look like there was no hope for the price to come back to that 1.6153 level but then later last night, kaboooommm. Anything can happen guys! In 2 hours, it ran like crazy horse coming back to my entry @ No 6 @ 1.6153 and stay below that level until this article is written. %#$$@##&*&^$%! What should I say... and it never broke that 1.6284 level....
You see, "frust I must be" (say it like Yoda)... but surely this one shows that nothing is impossible in this market. At once, it looked like there's no hope... and you knew by heart that trading by hope is one way to account destruction. It was all a matter of decision.
But in the above cases, I guess sitting with my position initially, putting some hope it would come back on both cases could be the best decision for the day with at least 50 pips in the bank.
The market is so cruel and it can do anything to your account. Though I did employ good risk management in both trades, but still two losses in a row, it somehow did psychologically damaged my trading confidence.
What I'm doing now is to short-live the memories on these 2 classic losses so that I would not repeat them again in my future trades.
Most importantly, take your trade decision seriously and stick with it until you are stop out. Or at least, if you decided to pull out earlier, do not take another trade until the situation really stabilize. I guess being either too fear or too greed will not do any good to your account. You just have to decide and take whatever consequences of your decision like a man.
In this case, my choices really prove to be costly with both decisions to pull out prior to hitting my Stop Loss were something for me to regret.
I believe the mistake was simply due to expecting break-out but in the end the market was in range.
I guess this is one of the market's uncertainties that we traders have to get use to, and it's the risk management that prevent me from catastrophic losses. Otherwise, I am doom already.
As for now, I'm saving my bullets for February. Though ended the month on the positive side, still my performance could be better...
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