GBP trade gone bad
October 25, 2005 by Trader Rich
The best way to learn from your mistakes is to try to understand why the mistake was made in the first place. I sold the Pound at 1.7648 at 02:26 a.m. on 10/25. I set a stop at 1.7698. The trade automatically closed when stop was hit at 03:37 a.m.
That is a 50 pip loss in a little over an hour. Here is an hourly graph with a circle around the area where I sold.
Without even looking at other technicals, I can tell you in hindsight that it was a bad time to make any trade at this juncture. The trading range was so narrow at this point that when a breakout did occur, it occurred big. Avoid trades when the range is narrow because the more narrow, the bigger the breakout. If I would have waited an hour, I still could have entered the trade and made over 100 pips.
Does anyone have anything further to say?
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I’ll offer a different view to yours here. You haven’t actually made a mistake at all. What you have done is made a successful trade!
Your trade consisted of an entry, a profit objective and a stop. Of the two price levels you were watching, the stop was hit. This prevents any further losses and in this respect, the trade can be considered a success.
Cable traded to a high of 1.7868 on EBS.
I’ll offer a different view to yours here. You haven’t actually made a mistake at all. What you have done is made a successful trade!
Your trade consisted of an entry, a profit objective and a stop. Of the two price levels you were watching, the stop was hit. This prevents any further losses and in this respect, the trade can be considered a success.
Cable traded to a high of 1.7868 on EBS.
You make yet another interesting point. I guess if you look at it that way… It’s the optimist talking….
You make yet another interesting point. I guess if you look at it that way… It’s the optimist talking….