Daily Archives: September 21, 2009

After a long run your muscles get sore and need a break. After many hours of being awake the brain gets tired and need a break. After too many martinis the body becomes dehydrated and needs a break (or at least water). After too many losses my Forex account needs a break too.

As someone fairly new to FX trading I’ve broken a cardinal rule – I allowed my trades to go too far underwater before getting out. I set my take-profit at a moderate level and my stop-loss at, well, what stop-loss? When your average gain is in the tens of pips and your average loss is approaching the hundreds you know it’s time to pull out, go back to basics, take a look at the market, refine your strategy, take a deep breath, and then think about going back in with a more mature, less reckless, approach. For me that means taking a week or so off from trading, checking out what my trading mates are doing, paying attention to the Currensee Market Watch widget, maybe enjoying a martini, and then planning my next trade rather than being reactionary, trigger-fingered, and making more silly mistakes.

I’ve taken my time off to better understand support and resistance and really look at leading indicators and the correlation between currency pairs. Although I tend to make trading decisions based on the world economic news, I’ve found that making any decisions regarding Forex in a bubble just doesn’t make sense. So, instead of focusing solely on financial media reports I’ve decided to let history be my guide. I’ll take the information I learn, look to see when in history similar moons lined up, take a look at historical charts, and see if it looks like similar patterns are evolving, and to try to make better decisions. Oh, and I’m not letting my emotions get the better of me, I’m setting my stop-loss at a point that I’d feel comfortable walking away rather than throwing good money after bad, and of course I'll be using the Strategies section of Currensee to keep me honest and measure my performance in a meaningful way. Discipline is the new name of my game. And lots of water so I don’t get dehydrated.

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Be sure to read the full risk disclosure before trading Forex.  Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results.

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Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results. Investor returns may vary from Trade Leader returns based on slippage, fees, broker spreads, volatility or other market conditions.