Wednesday 24 June 2009

Reflection On Jumbo Loosing Trade - Noob Mistakes

So, to figure out where I went wrong on yesterdays EURUSD trade I need to reflect and look at the trades and time frame.

a. I should not have increased my size at 11.02 from my last sale (10.39) - the move was too small. I should have waited for 1.3952 to use the increase from 100 to 200k. That would have been a 60 pips move from my entry.

b. At that point (putting on 2nd trade to total 200k) I should have thought about my exit point, I was solely focussed on downside. I didn't consider that a 100 pips move can be followed by another (and beyond resistance) quite easily on volatile days.

c. At 1.40 being more than pierced - it stayed there for much longer time than previous 2 attempts - I should have considered that a further move on stops triggered is a good possibility.

d. At 1.4015 and 1.4050 I would have probably shorted again even with hindsight.

Even though all the above would still have made me be in a loosing trade I would have had an average of closer to 1.40 than the actual 1.3950 I had. The size of the 600k loosing 600USD every 10pips and then moving 40pips in 10minutes really froze me like a deer in the headlight.

Then I panicked and closed the trade.


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