Just back - and things seem to have been happening! It is always a humbling experience to see how our thinking and our decisions can make such a radical difference to our bottom line!
Yesterday I went long after the break downwards, still in the mode that this would soon bounce back once those background geopolitical issues come back into the picture. But because the market was still so sluggish and limp towards the end of day, I closed it for a few pips profit, hoping for a better buy level today.
But this morning we were talking about the negativity in international markets, especially, in equities and I decided to go short instead and see if we drop to that Daily 200 SMA level, which was tantalisingly waving at us from down there around 50 pips below us. These longer term 200-period SMAs often act like magnets to the market when the sentiment is in their direction.
So I get home now and I see we’re there. If I had sat (stubbornly) with my original long position I would now be stopped out, but instead I am seeing a 50+pips profit.
I only say this because there is a big lesson here. In discretionary trading It is we, the trader, who are the real key to our success or failure and not the system - and that brings with it the need for cold humility before the markets. There is no room for personal pride. If a view changes then face it and act on it. There is no trophy for pride, only for action.
Of course, automated trading systems are a different thing altogether since they have a built-in consideration for absorbing market changes and are looking at profitability over a period of time based on strict rule-following.
Often we need to look at the total picture from our decisions. It is not just a case of “50 pips” profit, it is also the 80 pips loss that would have been if staying with a long position. In other words one decision makes a difference of about 130 pips between what would have been and what is the state of our balance. And, of course, this can work in the either direction, too!
But I am grateful for this and now time for yet more coffee and something to eat!..
@dpaterso I’ll look through the above posts in a while