Sometimes it's not trading which is the winning strategy....
We've all been there....
- An alert on your phone draws your attention, "GBP USD up x%"
- A news story comes out; in this case "Brexit Breakthrough" and before you know it the markets are going nuts.
- You scramble on to the charts to take a look at the action and Holy Moly things are going UPPPPP!!! Naturally your eyes ignore all of the indicators on the chart, and it is natural. I think much like how we read words (We see the shape of the word not the letters which make it up), we see the chart and the big reward, not what could be happening.
- We jump into the action, ignore our pattern recognition, ignore our indicators, ignore our structures and well.... at that point it's plain old gambling not trading.
- Now, on this occasion as the chart shows, you might have been alright, the pound is shifting up, but it's shifting up on Brexit speculation, big banks buying the pound and news reporting after the fact, not because your strategy tells you you should enter. What happens tomorrow, if there is no Brexit deal? What if you entered now because it looks amazing, nothing more and tomorrow Brexit is off? You lose.
- I know, I've been there. Trumps Presidential victory I played the short and the long which happened and made one of the biggest losses of my trading career and all because I was trying to 'catch the wave' through fear of missing out (FOMO) and got it wrong in both directions.
- This fortnight, I missed the pound's massive surge, mainly because my capital was committed to other pairs and stocks and I have strict rules on how I allot my capital. And I made a comfortable profit on my other trades; not as much as I could have made on the pound, but the point is, I profited because I followed what I had learned and made a measured, relatively smaller risk trade. And when I looked at GBP USD, my response was, "Okay, I missed it; onto the next one".
- In our trading lives we will all have the occasional monster of an opportunity, but as we know, most trading is waiting around for things to happen, getting in and then.... waiting for more stuff to happen. These sorts of big trades are rare and I can guarantee you, the best trading strategy in the world will also not stop you being on the wrong side of them also once in a while. It's just the way of things. Better to follow your strategy and profit when your system tells you to.
- FOMO is real people, make sure you're entering for the right reasons!
- An alert on your phone draws your attention, "GBP USD up x%"
- A news story comes out; in this case "Brexit Breakthrough" and before you know it the markets are going nuts.
- You scramble on to the charts to take a look at the action and Holy Moly things are going UPPPPP!!! Naturally your eyes ignore all of the indicators on the chart, and it is natural. I think much like how we read words (We see the shape of the word not the letters which make it up), we see the chart and the big reward, not what could be happening.
- We jump into the action, ignore our pattern recognition, ignore our indicators, ignore our structures and well.... at that point it's plain old gambling not trading.
- Now, on this occasion as the chart shows, you might have been alright, the pound is shifting up, but it's shifting up on Brexit speculation, big banks buying the pound and news reporting after the fact, not because your strategy tells you you should enter. What happens tomorrow, if there is no Brexit deal? What if you entered now because it looks amazing, nothing more and tomorrow Brexit is off? You lose.
- I know, I've been there. Trumps Presidential victory I played the short and the long which happened and made one of the biggest losses of my trading career and all because I was trying to 'catch the wave' through fear of missing out (FOMO) and got it wrong in both directions.
- This fortnight, I missed the pound's massive surge, mainly because my capital was committed to other pairs and stocks and I have strict rules on how I allot my capital. And I made a comfortable profit on my other trades; not as much as I could have made on the pound, but the point is, I profited because I followed what I had learned and made a measured, relatively smaller risk trade. And when I looked at GBP USD, my response was, "Okay, I missed it; onto the next one".
- In our trading lives we will all have the occasional monster of an opportunity, but as we know, most trading is waiting around for things to happen, getting in and then.... waiting for more stuff to happen. These sorts of big trades are rare and I can guarantee you, the best trading strategy in the world will also not stop you being on the wrong side of them also once in a while. It's just the way of things. Better to follow your strategy and profit when your system tells you to.
- FOMO is real people, make sure you're entering for the right reasons!