I had a loss today with my production H-system due to a mild blunder.  This system is designed specifically for the GBP/USD and is to be traded only during the European/US session between the hours of 2am EST and 11am EST.   During the other times of the day, there just isn't enough volatility to move this pair unless of course there is an FOMC meeting.

The blunder occurred because I had automated the entry and set it to expire in 1 day.  Well, I ran out to lunch and came back to see that my positions were triggered open.  I sat on it for a couple of minutes while I watched the 3 lot position go down as much as 30 pips.  It turned a little bit up and I closed it for a total net loss of 12 pips. 

After I noticed the open positions, I had stop losses set for about 30 pips below the entry for each lot.  If a position is mistakenly opened, is it best to ride out the blunder with the hopes that you may reach breakeven or even a profit or is it best to just admit the mistake and immediately close out the positions? Since I wasn't at my desk when the positions opened, I couldn't close them out immediately but I think I did the right thing by closing them out at a slight loss instead of waiting longer.  This isn't the first time I've made a mistake opening a position.  It's just that usually I would have held it until it reached stop loss.  It feels a lot worse to do this than to admit the mistake and take a smaller loss.  

So I really only lost 4/5 of the spread on each position.  Next time I will close the orders at 11am EST. 

Read or add comments about this item.

No. 1 :

Sorry to hear about that. I would say that hope has no place in trading decisions, though. Stay with the trade if your analysis shows that it should move in the right direction - otherwise get out ASAP. This also has little to do with whether the trade is in the black or still in the red.

Submitted by uri • 2007-02-10 13:48:13

Please keep your comments brief and on topic, and remember that this is not a discussion thread.
Name :		Website :
Title :
Comment(s) :
Verify :		There are how many letters in the word SPAM ?