Only one thing better than reading trading rules and that is showing what happens when you break them (by not applying them). In this case I started (not serious) trading around 8:30AM this morning playing EUR/USD back and forth for 1 to 4 point profits/losses per trade - no big deal... Well, at 11:15AM I was short 10 lots (1,000,000 units) EUR/USD (actually in between reading/writing email *rolling eyes* - remember, not serious trading...) casually waiting for it to go into my favor 2 to 4 points ($200 to $400). My attention was fully off the trade and when I glanced back my P/L indicator read 22 points profit ($2,200). The rest of my screen was blurred by a LONG red lightening bolt type candle on the chart - being the contrarian I am my mind immedietely went into disbelief. I broke a few rules at this point as I reached over, grabbed the mouse, pointed and clilcked CLOSE position. As soon as I closed, I opened an equal (10 lot) long position expecting an immediate reversal. Of course NONE of this was done thinking - just knee jerk reaction (Oh yeah, rule 2728282?: Never trade in reaction!) HA! Instead of a reversal I was met with the price continuing to fall more than another 100 points - I cut my (uncalculated) damage to only $10,000 - 100 points down <-- save the tongue lashing, guys - I had a reason for doing this... just can remember what it was... OK, now for the good stuff. Rules I broke: 1. Expect/calculate/estimate the unexpected/uncalculatable/unestimatable! 2. When you trade, pay attention. 3. It's OK to look at the news regarding an instrument you're trading (in this case I would have seen the pending Fed interest rate announcement - yes, those type news bulletins effect currency price. 4. When a BIG move (like that) comes in one HUGE red bolt candle, another is bound to follow (and another? 5 MASSIVE ones in all this time): so, DON'T close your trade to take profit (on the first one)! 5. Use the 50% stop paper profit loss rule! That is, when you are in profit, count back to you (in this case I was registering 22 points profit) then measure 1/2 way back (11 points in this case) as your stop loss on your PAPER profit. Had I done this, I would not have been able to follow the price DOWN fast enough to calculate where 1/2 way retracement would even be! The price fell 170+ points in five minutes - but, of course, paused long enough for me to get a Long position in WAY before it reached its bottom at 1.2464 - ha! 6. Of course, a Long position would NOT have been taken because of all of the above (that is, had I not broken those rules). Do you see any other rules I broke in this trade? Anyone else broke rules that resulted in big losses? If so, what are they? Overload