Funnily enough I was watching the replay of yesterdays (maybe Wednesdays?) webinar with Wayne last night whilst keeping an eye on USDJPY for a short opportunity. Wayne was talking about how new traders often take quick losses only to see price then go in their favour. Well, I’m not a new trader (I found Wayne’s FX Bootcamp webinars back in 2008 I believe before I started trading) but I still cocked this up.

Price broke down through Wednesdays lows and in doing so broke through a major daily structure level. All of my moving averages from the daily down to the 5 minute say sell, so I was waiting patiently for a setup.

Well, patience and a prior engagement got the better of me and at 18:00 I sold off of the 50% retracement in anticipation of my entry signal. I then went out feeling uneasy about my trade…

I kept an eye out via a mobile trading app and I saw price run 20 pips against me into my 30 pip stop loss, and as soon as price came back to break even I closed the trade for a 4 pip profit.

This morning I checked my charts to see that had I just waited this out, or better yet not entered until I had my signal, I would be in at least 90 pips profit. C’est la vie.

Rookie mistake.

lesson-4

3 thoughts on “Don’t Take Quick Losses (or gains…)”

  1. Jim Reddihough says:

    Don’t think there was much wrong with your entry. It was at first line of resistance which teased a bit but didn’t hold. Stop was a bit tight and a 61.8 retrace would probably have kicked you out.
    I think we’ve all had the jitters at some time and got out too early and I bet most of us with also do it again occasionally. I’ve also been caught with large stop losses that have been hit and believe me yours is a much pleasanter scenario.

    1. Paul Mason says:

      Hi Jim, thanks for your comment. My stop loss was as shown at 108.798 so there was still 10 pips or so wiggle room.

      My problem was that I jumped the gun and pre-empted my entry signal at the 38.2 and that signal never came, so I was on the back foot from entry which made me nervous.

      I did actually get a signal to enter short at 108.625 which I missed, so as soon as the trade was back in positive territory I closed out.

      Shame as I’ve had a very solid week this week and I don’t like schoolboy mistakes!

  2. Maryna says:

    Hi Paul, one of the reasons I never use a hard SL, but alerts – I want to decide when to get in and out of a trade and to protect yourself should anything unforeseen happen, you can place a hard SL 100p or so away just in case you are unable to “hear’ your alerts.

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