This post is somewhat unusual in that it actually contains a chart – whump! (sound of reader falling off chair) and describes a failed trade. That last bit isn’t (currently) so unusual 😉
The silver lining is related to the ‘recovery’ or indeed what’s known as the art of getting out… but before we go there I’ll cover why I thought getting in was a good idea…
Essentially I ‘felt’ that we’d got to the bottom for the euro ahead of the US open and that we should see the cavalry appear to buy back the lows. I didn’t believe there would be a whole heap more selling interest last thing on a Friday…
This was sort of propped up by the super amount of chatter along the lines of ‘OMFG the Euro is going to TANK!!’ which generally gets on my nerves…
It probably didn’t help that I was looking at this on my phone while sitting in a coffee shop. This is never a good idea. At the time I also believed that there would be a short sell off then a recovery – which meant I at least placed my initial stop a thousand light years from my entry.
Now in retrospect what I failed to check when attempting to pull this sort of stunt was the ATR for previous days. We’d moved about 100 points and the previous few daily ATR’s was about 120 so at the very least I was getting in significantly early…
So I got filled at 1.21790 and had to leave what I was doing, move about and get back to work… The next point I have an opportunity to see what’s going on I have one of these moments…
Anyway I’m now pretty much looking to get out of this because the original ‘thesis’ for my trade is very wrong. The only saving grace here is that what I originally believed would happen will still happen it’s just this is going to take me out at/around me entry point rather than at +30 which is what I had originally been looking for
So I’m now ‘happy’ cause while I made a rookie mistake (not checking what the ATR actually was before going into this) I’ve enough experience to ‘know’ that rather than throwing all my toys out of the pram and puke for -20 price should grind back to at/near my entry and I can get out pretty close to even.
There’s a point later where I could have got out exactly flat but I wanted to exit before people started fading the london close and didn’t want to grind out another hour with a potential 30 point loss ‘at risk’ if the market decided to take another leg down. What’s the benefit of risking losing 30 to gain another 5 points on my exit? There isn’t one and I obviously can’t see into the future. If anything this post proves that. LOL
Now there’s all sorts of things I could have done to improve the outcome like adding at 1.2150 but I’m trying to manage this through my phone and generally stick to my (new and on the fly) exit strategy. Adding to losers isn’t on the list of ‘new and wacky things to try‘ especially not on a Friday afternoon when I’ve not done it before.
Or I could have had a stop under 1.2175 but I wasn’t really prepared to do that ’cause I was a little close to the US open bell.
Or I could have closed my trade then got short at 1.21800 but really, by this time I was a bit fried mentally. Worth considering for another time though… Maybe not last thing on a Friday however.
So there you go. I made a mistake, it didn’t kill me, I learned a lot and maybe some of you learned something too (e.g. time of day is important)
While it was a ‘failure’ from a results perspective from an ’emotional management’ perspective there was a marked improvement from previous encounters like this.
p.s. Thanks to everyone for the ridiculous number of views (2000+) related to the previous post which was completely staggering. Your support and interest is essentially what is currently keeping me moving forwards – seriously.
I’m also considering changing the theme/format of this blog but if I go there it’ll be in a couple of weeks time. People don’t seem to like change so I’ll only do this if/when I can find something really sweet/zen looking etc.