Holding Your Guns

Yesterday wasn't that well afterall. Lesson of the day: Holding your guns.

When you've decided on your trade, always bear in mind, never to change positions unless it really is beyond hope. There's always a reason for you to enter a trade, and its always a dumb reason to stop your trades.


GBP/JPY Hourly Chart

Take my trades yesterday for example:

First trade was a long GBP/JPY.

Rationale for entering was MA(5) had just crossed the MA(8) line, coupled with stochs at less than 10. This definitely meant a correction no matter what. So the long position was entered at 227.50 at GMT 4.45. However, in fear, I closed off the position with a close to breakeven profit at 227.52, and afterwhich, prices shot all the way up to 228.22. A clean 50 pip profit would have been made.

However, I closed off the position to go short, at 227.50, which also caused me a loss of 59 pips as my stop loss was at 228.09. This was utterly depressing, So I decided to hang on to see what would actually happen.

After a few hours, I decided, since MA(5) had crossed above MA(8) on my chart, I decided to go long. And then, there was a downturn and there it was, it hit my stop loss again at 227.50.

So I rested for awhile, before deciding to go short at 227.75. This position kind of worked out, and not before long I was up as much as 115 pips, and also in the process I pyramided again at 226.92. These positions showed high profitability; however in less than an hour, it rebounded and then hit my stop losses for both positions at 227.75. So in a way, I broke even and also lost another 83 pips in this movement.

Then, I decided to take another break and then entered into another long position, at 228.00, when the pair looked more bullish. Within an hour, I lost another 50 pips.

All the trades I made yesterday were horrible, and simply stupid. If I stopped switching my positions so often, I probably would already have hit my profit objective of the day and then stopped trading altogether.

The experience yesterday taught me to hold my guns and stick to my beliefs, regardless of how much the rest of the world was telling me I was simply on the wrong side of the game.

That's all for the review!