Monday, September 14, 2009

Fading the market

First I was considering shorting gbp/usd nearing previous support marked with yellow arrow. I decided to pass on it because I thought that there isn't big potential for a move and that there was option of powerful spike back up. But when market made it's move and it was opposite of my expectations I entered long in a mix of frustration of missed opportunity and going with my idea of pullback. That didn't work and I quickly got stopped out. I didn't have problem with taking that stop and that is great. Less great is my next trade where again I entered long probably still dreaming about spike up. Then everything slowed down and it took 30 minutes for a market to get near my stop 10 pips lower. I'm so non beliver in slow moves, I lowered my stop and averaged calling bottom (I was thinking about Orion machine kicking me with a stick at the time). Who knows would I lower my stops again but it was bottom and I got profit.
We all know my flaws but the main point is that I traded what I think and not what was going on. In reality I was fading the market. When I sell myself a story I'm prone to continue with fantasizing, then I more easily move stops and average. Better for me is to scalp market reality in direction of the move and if I don't see opportunity that I like just wait.

+19 pips

1 comment:


One of the worst things you can do is get rewarded by the market for bad behavior.