Bent the Rules Today

September 20, 2006 by Trader Rich 

I kind of broke the rules of my forex trading system this morning when I got a signal at 10 am this morning.  My rules say to only trade during the US/EUR session overlap which 10 am clearly falls within but sometimes you have to adapt.  Today I did just that because of the FOMC announcement coming out at 2:15 pm.  I have to wait and see if this saved me from a loss or if I missed a good trading opportunity but either way, I think I did the right thing.  I don't want to make a habit of doing this but this is the one and only announcement where I can see doing this.  During my backtesting, I have not seen a profitable trade coming after 10 am.  By this time I would think most traders are trying to settle up on their positions especially today. 

Even though the rules were bent, I think that to be successful, you have to constantly adapt to the changing environment and tweaking rules or flat out changing them is necessary.  I'm not changing them because I'm overly emotional or fearful, I'm just doing it because when I woke up this morning, I told myself not to trade until after the FOMC announcement.  I'm hesitant to open any positions before this and expected more consolidation or the classic, Buy the Rumor, Sell the News.

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