I was thinking it might dip below 1.2200 again, but it seems that there is definite strong support there. Psychologically I was thinking the euro felt oversold at that level, so it was no surprise to me at the rally, but I caught it wrong twice (once the bounce and once on another 30 pip drop). Interesting your comments on it flatlining for a while and then people going long just because. I did hear that it seems selling of the euro has resumed for many institutions in the UK (where I'm at) so my personal take is on par with you, that it really hasn't got anywhere to go but drop. I'm a little pee'd at myself for holding on the short (& letting go of my own ;-D ) a little longer than necessary on the bounce (let go of a fair few pips doing that) and then trying to make up for it by reversing my position trying to ride the trend. Lol funny enough I kept telling myself I would get emotional! lol lol.
It's always emotional with money. That's why several rules exist: 1. Always set an automated stop loss and take profit. 2. Never mess with your SLs or TPs. I think if you did a poll you'd find 90% or better of the successful traders follow this philosophy.
You are right, of course. However, due to so much in the way of accusations of retail fx dealers being bucketshops (referenced in a derogatory way) that I wanted to keep my stop loss to myself, a psychological stop loss, with an SMS message to my mobile phone when it gets within 10 pips, and then another when its there at the stop. That way, when I'm sitting there thinking "it'll resolve, it'll go your way, just a little bit more time" the second SMS quickly knocks you back into the real world, and forces you to close. For now, I want to make sure that I am losing on my own first, and not having a dealer intervene, so I'm using these psychological sp points. I am using the automated take profits though, that's got no skeptism attached to it from me ;-) These have been my first trades in forex using real money (got so bored with paper trading I decided I wouldn't mind losing a bit of money on learning, nothing can beat real life practice. What I am pissed off about is that as I made a mistake with the size of one of the losing lots (too high by a following zero :-o) I tried to square by opening a reverse with a similar high value lot. Predictably, that went against me and compounded the loss, my disappointment at myself, and the urge to square even more). So far, I've resisted the urge, but its difficult as my account p&l reflects a loss, although I in terms of pips, I am up some 180 or so. V annoying. Part of me knows I traded some bits right, but the other part is regretting attempting the reversal with a high lot to recapture ground. I guess these are the psychological barriers that are talked about so often in the books. Hopefully its a not too expensive lesson to me, that I learn from well.
Actually, let me elaborate why I asked that. My girlfriend and I love to play Blackjack. We play at casinos here in Moscow every once in a while. We're not big gamblers, we just enjoy the game. There is a right way to play Blackjack to maximize your odds. The odds are never in your favor - if it was, then casinos wouldn't have the game. But you follow certain rules that maximize your odds. For instance, when the dealer is showing a 10, and you have a 15, you always take a hit. This is because statistically the dealer's down card is most likely a 10, since there are 4 times more tens in the deck than there are any other card. So you have to play as if the dealer has twenty. So you take a hit. The set of rules that one follows in order to maximize one's success in Blackjack only work when one follows the rules 100% of the time. The moment one says to oneself "Actually, my gut tells me that the dealer doesn't have 20 this time" is the moment when the system breaks down, and the player now shifts the odds away from himself to the house. Your gut always tells you wrong when it comes to money and gambling. Forex is educated gambling. Never trust your gut. Always rely on a system. And never alter it.
You are of course absolutely right. I do sometimes play blackjack and my friend is a very good card counter (has been on tv in UK and banned from a few london casinos). I know what you mean and you are totally correct. I have been knowingly gambling and have totally strayed from my own rules. Again I fell back into the trap and have lost another 30 pips from trying to be a hero. Again, I trusted my gut, and was right for 10 pips and wrong 40. Oh well, another loss to hopefully hit home the rules this time. Its only $200 lost today, which isn't a big deal, its just a little bit disappointing to get lost in it all and try to claw back a loss. Even more disappointing is that I read a fair bit about this in the book The Disciplined Trader. Its just very frustrating because, pip wise, I'm still up!! lol Ok just closed two of my larger lot trades, took a v small loss on one and a v small profit on the other, and seems about evens. Now, I'm back in the previous positions, but with my originally intended lot size, with tp set and sp set on my alerts, but also a larger sp set on auto. I'm short on EURUSD at 1.2280 and long GBPUSD at 1.8176. But just one thing, if USD gains on EUR due to NFP tomorrow, that surely will hurt my GBP long?
If you mean GBP/USD then of course. Anything good for the dollar will be bad for that. However, I'll say this - the ration of longs to shorts on the EUR is reaching...hell, is already at extreme levels. Usually that signifies a bottom has been met. So you might want to get out from under that short at the end of this week.
Ivan, your logic is undeniable. I'm going long euro. Didn't think I would, because I see a collapse coming for the euro, but... I can kick in my new system, and, in addition, there apparently is still money to be made trading euro long inspite of various member-nation votes, right? So, since trading forex is about making money, and not just listening to your gut feeling, all signals point to buying euro with 1-cent TPs! Even though I lost 5% of my port cutting my losses on my last euro-long trade, it doesn't mean I should lose another 5% in missed (euro-long) profits. Good coaching, Ivan. You dah man! sKaLpZ ps: All I need is 60 winning 1-cent euro-long trades to get back my 5% loss taken on my last euro-long trade that I axed. I may be able to get those between a 1.2400 to 1.2000 trading range. Go ahead, call me insane. The point being, apparently the market simply cannot fathom buying USD beyond a certain point - regardless of what happens in the EU - and that level may have been reached or may be reached soon. Again, it spells euro price being sustained. Correct me if I'm missing something here. It may not be the most perfect trading logic but it's aggressive trading and I like that. In long euro @ 1.2276. TP = 100-tics. The Coinz a playah.
Furthermore... I trade against bad speculation. And, since taking no position (i.e. remaining flat euro long) is taking a position, I am actually speculating on the euro (that it would collapse). I've decided that continuing to do so (remain flat) is bad speculation, hence I opened a euro long. Especially since, as Ivan put it, "trade your system." I got one. fxscalper
Just keep in mind that the NFP is a massive wildcard today. I would close if you're in positive territory prior to the news event.