I did succeed to lost very nice weekly gain last Friday as for the entire day I was looking only for a down reversal on Eur.Usd pair. That must be the top, it will reverse. In retrospective, I had a fixed idea and, for that I kept entering on the short side while market was raging up and just eat up all my entry’s. At the end of the day, I had lost a little bit more than my weekly gain. An entire week of work to get out with less than before. Shame on me…
I need to learn how / when to review my daily market direction bias.
I need to learn to accept that enough is enough and quit for the day
OK, now you could beat me. But not before you give me some idea or your point of view on how you do when market is not going in your projected direction.
How about staying away on the day of the NFP. It use to be my “achilles’ heel” until I just ignored the markets totally on the day no matter how enticing things looked.
I closed out a EURUSD long before the NFP news release on Friday in anticipation that things might get messy, even though it went long after the reading I wasnt mad this time around.
Avoid trading on Fridays (or at least close your positions before Friday afternoon) because things tend to get a little crazy around that time. Low volatility and traders packing it in for the week make for an unpredictable market.
What happened is you formed an opinion. This should NEVER be the case. You should never have a fixed idea ever. Let the market show you what its doing and go from there. Its painting its own picture, your job is to guess what its trying to draw. Like pictionary, you dont keep guessing horse over and over and over again. Either way, i guess my point is this. You either need to find a fixed (rule based) method in which your bias switches back and forth. It could be as simple as a price crossing a moving average, HH/HLs -> LL/LHS, higher time frame trends, etc. OR you can just use other discretionary methods like, news, market sentiment, correlation with other currencies. Either way, you did i identify your own problem staying with a set opinion of the market. Just create a data driven, methodical way to determine direction and let the market lead the way.
This last Friday was best NFP ever.
IF you went in with a plan and stuck to it. Based on months of NFP research.
I traded GBPUSD as I found it more predictable than EURUSD albeit with less pips.
I knew I “could” make more with a riskier EUR but glad I didn’t. I spied clues from the UK to see how their banks would play it and just followed them with the plan.
I also had a big short in place on a GBP doji, when I “thought” the market was turning, but it wasn’t working out and everyone else was buying so I said, to heck with it and doubled up long.
Be objective and flexible. Look out for signs. If you see a road closed sign (Stop hit) try going the otherway.
If the market is not going in “your” direction try “your” direction the same as everyone else.
LIke MeiHau said, have a data driven plan not a rigid plan that just picks one side.
I’ve made the same mistake as you did, but instead of entering several times I did one trade which ended with a loss obviously. You have got to accept the loss and set a daily limit or weekly limit for your losses. If the amount of that lost money exceeds your limit, you simply have to stop. Of course, this will work only if you have disciplined yourself not to take any more trade that day/week.
I would not suggest taking the other side of the trade with little/no experience because you could easily end up trading driven by your emotions or just simply chasing the price without a planned out strategy. You might get lucky here ‘n’ there, but on the long run, it likely won’t work.
I would say how could you do that?Remember trend is your best friend so never try to go against it.The market was bullish and you kept shorting the currency and ended up giving all of your weekly gains.Sorry for my such reaction but going against the trend is really dangerous most of the times.
one week’s worth of trades erased in one day. how many trades and pips did you make last week vs the number of trades and pips you made on friday?
first, if you are new, do not form a fixed directional bias. always keep in mind the possibility that you are wrong with your bias (being new and less experienced).
best thing to do is have a bias BUT be vigilant and adaptable to any change that you see.
when you enter short, and price does NOT move down as you have expected, assess the situation. do NOT keep entering short - let your initial short position get ‘cooked in the market’, meaning, let it stay open for some time or wait for a significant time before you make a short re-entry…
to give you an example, i see some traders take a short position, exit it, then after just a few minutes or hours (whatever the case may be), they get in short again. the problem with this is that IF you are wrong with your directional bias, you will get chopped up by the market and you will be piling up your losses.
of course, the result may be different if you do this as an experienced trader.
if the market has not been going your way (despite several attempts at trading in one direction), think of reversing your position, or better yet just stand aside for the moment.
[B]how / when to review your (daily) market direction bias[/B]
depending on the market condition (trending or ranging), you can review your directional bias in a variety of ways. it all boils down to personality and preference
personally, I form a bias before the start of the week. I take note of last week’s bias and the bias i see on my charts (daily, weekly; i trade timeframes of 4 hour and below).
since I trade lower timeframes, I adapt to changes whenever they are presented by the market.
important questions to ask yourself
which timeframes do you trade
is the market trending or in consolidation (check 1 hour and up; or just daily and weekly)
what is the bias last week? bias on your higher timeframe charts?
[B]
learn to accept that enough is enough and quit for the day[/B]
again traders do this in different ways
some have a fixed daily/weekly/monthly win/loss target, in pips or %. they close their computer once they reach or get close to these targets
some employ a rule like “3 shots a day”, wherein you only allow yourself to trade 3 trades Maximum in a day.
if you are ill, emotional, stressed, angry, drunk (some trade drunk), or what not - these are factors which should help you decide to quit for the day; DO NOT trade in these conditions
