|
Originally Posted by Truville
I think yesterday’s trading shows why it is important to remain flexible in your trading, and sometimes not have set, hard stops.
About 20 minutes before the UK explosions, I went short Euro, thinking to make a quick 15 pips. Suddenly, negative 10, negative 20, negative 40! What’s going on here?
Now, normally, my stop would have been triggered, and I’d take the loss. But I didn’t this time. Because what I saw was nothing more than panic selling. I absolutely knew that the Euro would turn around, and it did.
This isn’t cable we are talking about. If I was long cable, I would have taken the loss and been glad to only lose what I did. But since Euro really was only peripherally involved, I felt comfortable in letting it ride.
Euro was up to about –80 at one point, then, as I expected, dropped down, down to make my target after all.
In fact, I’ll bet a lot of systems had their stops hit, triggered a buy and had those stops hit too.
I think it is times like these that separate the traders from the system. After all, what system could have predicted that? But a good trader can evaluate the system, and act accordingly.
I think that is what we are all striving for, really. I’m not saying that one should always move their stop. Of course not. But to allow yourself that flexibility, in extraordinary circumstances, I think that is what differentiates good traders from great.
|