Journal Entry (06/10/2011)- Loonie Stops Out

Open a long position on the Loonie after a positive Canadian employment report on Friday at 7:00AM CT. It took me 4 minutes and 55 seconds to digest the information and place a market order. About three hours later, my stop loss of 1.022 went off at 1.021. Instead of gaining strength, the loonie took a dive as risk aversion lifts the US dollar, a currency of last resort. The loonie sell-off was confirmed by heavy volume and has pretty much been in consolidation mode with light volume.

What Could I Have Done: Comb thru and digest the information quicker and execute the order faster. In such a risk aversion situation, open a new long position on the dollar or Treasury bonds with a tight stop loss (and futures options). Why T-bonds and not T-notes? Because during periods of lowering interest rates, the value of longer-term bond contracts grow to a greater degree than shorter.

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