Last night and today were uneventful ... and it bored me about as much as this post might bore you. Sticking with my Bollinger Band-PSAR-RSI strategy per my rules, I didn't see anything in the charts that induced me to take a short or long position in the EUR/USD exchange.
Actually, that's only partly true. Last night, I put in a buy order shortly after closing out a previous buy order for a profit. Doesn't make sense, you say? Well, you're absolutely right. In hindsight it doesn't make sense to me either.
It probably won't surprise you then when I confess that I sold that second holding for a loss about an hour later. This all happened late last night, so I started the day in the negative. Never a good thing with anything in life.
The second trade wasn't just out of boredom. Something in me felt I should be able to create a successful position everytime I look at a chart.
With some immediate self-reflection post-loss, I decided I shouldn't put in another order, especially to hold overnight, if I wasn't entirely confident. And I wasn't. I switched between so many timeframes desperately searching for a clue as to whether the price would soar or sink--all to no avail. I was leaning towards a long position, because the EUR/USD on the day timeframe has been trending upward. But I couldn't find chartology merit to support this inclination of mine.
Selling, or going short, didn't seem appealing either. There was no overwhelming price divergence that would've hinted at the possibility of a sharp reversal in price movement.
I'm pleased with my decision to not go long overnight because I would've woken up today with a loss. For most of the night, the price did creep upwards, but when the stock market opened this morning, the EUR/USD really started to move down in price. It might not have been a substantial loss, but it would've been a negative yield nonetheless.
I'm also glad I didn't go short. I thought it showed some restraint on my part not going against the current. It wasn't listed as one of my rules, but going with the flow/trend was always something I wanted to keep in mind with all of my trades. It's no coincidence that my most successful trades so far have been long ... since, surprise surprise, the trend on the day chart is up.
I have to admit, though, not trading is pretty darn hard. Willpower takes effort, and this little lady is pretty out of shape as far as mental toughness is concerned. When I wrote my rule about emotional neutrality in my forex trading, it never occurred to me that my toughest day emotionally would involve resisting the urge to trade.
In high school, I never took speech and debate as a class or an extracurricular activity. I don't enjoy the sound of my own voice or speaking in public. Small group discussions, without an audience, are more to my liking. I do have some a newfound respect for debate champions though. One in particular from Harvard, who was also a contestant on the Apprentice, said something that struck a chord with me: "Every good debater knows that there's a time to listen and a time to speak." I'm paraphrasing, but you get the gist. Perhaps I ought to get used to the idea that a good trader knows that there's a time to trade and a time to sit it out.
I've been checking back into the charts throughout the day--1 hour timeframes and higher--and I saw an opportunity for a short-term trade a few hours ago. I put in a sell order--going short--and eeked out a $250 gain. That now puts my account balance at $56,408.72, which is a little bit down from $58,058.72, my balance yesterday. I'll view the $1,650 not as a loss, but as my tuition for my education in the importance of patience and willpower in forex trading.
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