Journal Entry (8/18)- Winning And Its Effect On Trading Psychology

$EUR/USD (1-hr chart)

In general, people are more emotional when they’re making or losing money. While the winner is complacent, the loser looks to make his/her money back.

I have only recently discovered that $CAD/JPY has a 90%-plus correlation to #Crude #Oil. Today, upon the poor jobs data and higher inflation in the U.S., I could have open a short $CAD/JPY position. The risk off sentiment was confirmed by $SPY, a good indicator of global risk sentiment.  

But anyways, I re-entered $EUR/USD upon a breakdown of the 180-EMA. Being complacent, I didn’t move my protective stop to Break Even after an hour (instead 1.5 hrs). The pair refused to breakdown further and I was later stopped out at Break Even (not including commission).  Should I have re-loaded my shorts upong a failed test of the 180-EMA? That’s hard to predict as the market is indecisive right now. It’s good to wait for clearer signal, especially as German PPI is due out tonight.

$GBP/USD (1-hr chart)

I also open a short $GBP/USD upon breakdown of the channel. I wasn’t watching this pair and only noticed it after someone posted it. Late to the party, was stopped out later for a loss of 18 bucks LOL.

*** $USD/CAD tends to move the most on U.S.economic releases *** I was a little late to this (party, which kicked off after the poor US economic data. I went long but waited until a clean break of a pivot point and loss some pips. I could’ve step in slowly with 1 lot at a time instead of wait for break of Pivot Levels. Being complacent, I placed my stop at BE 1.5 hours later instead of 1 hr. Complacency has been known to bust pit traders. Being late to the party, I was later stopped out at BE.

$CAD/JPY (1-hr chart)

I decided to take an aggressive short on the $CAD/JPY (risky because way late), after #Crude fell 6%-plus and $SPY down 5%-plus already.  The market has a tendency to move against the open and take a breath after such a move. Even after waiting on a Fib retracement to enter, I was stopped out.

Bottom line: 1) I’m taking too many trades per day and late to the party. Wait on clearer signal. Market tend to move against the open and take a breath. 2) Complacency is very dangerous. 3) It’s better to miss out on profit than to wish you weren’t in a trade. 4) Make sure to draw in key levels and follow your trading plan. 5) The intermediate trend, in the case of the $CAD/JPY it’s a counter-move, is more important than the Fibs level.

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22 Responses to Journal Entry (8/18)- Winning And Its Effect On Trading Psychology

  1. lima99us says:

    [UPDATE 7:09pm 8/18/2011] After TWO failed tests of the 180-EMA, $EUR/USD continues lower but at a slower pace.

  2. lima99us says:

    [UPDATE 7:40pm] SOLD -10,000 EUR/USD @1.43052

  3. lima99us says:

    SOLD -10,000 AUD/JPY @79.353. Faded a failed test of 61.8%. The upthrust could be the late shorts covering. Using tight stop in this volatile environment.

  4. lima99us says:

    $AUD/JPY fast-moving pair.

  5. lima99us says:

    Moved stop to BE after 1 hour on $EUR/USD

  6. lima99us says:

    9:23pm will move stop to BE on $AUD/JPY

  7. lima99us says:

    Stopped out of $EUR/USD again. Not an aggressive enough stop. But after 1 hour, the pair should’ve moved if the market was into it. Safer this way!

  8. lima99us says:

    The market has a tendency to move against the open.

  9. lima99us says:

    Impulsive downleg retracement giving me a reason to stay in at least for BE. $AUD/JPY

  10. lima99us says:

    Stop $AUD/JPY now at BE. Now using the Bid/Ask prices for stops instead because it’s much more efficient and accurate.

  11. lima99us says:

    RT @DRodriguezFX No readily apparent reason for sudden JPY tumble. USDJPY about 40 pips off of its low at the NY close.

  12. lima99us says:

    Stopped out for +5 pips. The trend is now unwinding as the market tends to move against the open.

  13. lima99us says:

    BOT +10,000 GBP/USD @1.64971

  14. lima99us says:

    Stopped out on GBP/USD for -0.00371. Trade what you see, not what you hear.

  15. lima99us says:

    SOLD -10,000 EUR/USD @1.43038. After German PPI beating expecation but failed to lift the EUR

  16. lima99us says:

    The GBP/USD entry was not on a clean close above 100-day but I was impatient even with about 2 hours till German PPI data release.

  17. lima99us says:

    Went long on 30-Yr Treasuries with a market order. Watch the bid/ask spread on market orders. The one time you’re wrong, it hurts!

  18. lima99us says:

    Using both the USD and JPY as back pair helps diversify. That is, don’t go both 1) AUD/USD and EUR/USD but 2) EUR/USD and AUD/JPY

  19. lima99us says:

    “Money isn’t everything but it sure keeps you in touch with your children.” – J. Paul Getty

  20. lima99us says:

    Even though I peeled off profits on $EUR/USD, should’ve done it after a failed test of the weekly pivot point @ 1.426. Normally, I use the hourly pivot points. The shelling of Israel lifted the dollar and $EUR/USD bounced here.

  21. lima99us says:

    Watch the Bid/Ask spread when placing STOP orders using the MARK price. GC misbehaved on me today.

  22. lima99us says:

    o profit margin drops considerably the longer one is in the trade after momentum increase

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