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Originally Posted by Truville
Cable going short was a natural and understandable consequence to the news. But was Euro going long? Does that make as much sense to you?
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Yes, perfect sense. Traders were selling sterling and selling dollars, the result: weak sterling, weak dollar, strong Swissy.
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Originally Posted by Truville
Let me turn it around for everyone here, and see if "stick to the plan, no matter what" still holds true.
You short cable two hours before the bombing. You look to make 30 pips, and risk 15. Suddenly, cable drops like a stone! It keeps dropping, going down and down. Obviously, some news event is really making this baby move.
Here is the question: Do you still take your original 30, or do move your limit to take advantage of the situation? If you would move your limit on this unique event, how is that any different than moving your stop on a unique event?
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Isn't the answer obvious? The difference between letting profits run and letting losses run, one makes you money the other is.....well just plain foolish in my opinion.
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Originally Posted by Truville
To me, looking past the rigidity of your system, to see what the market is doing- is the difference between someone who trades the market, and someone who trades a system.
If you think an excellent trader is some kind of robot that takes the input "Euro over 2000" and outputs "must close at loss", well, I'd call that much more naive.
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Ummm, it's called risk management. Sure you can look to see what the market is doing, sure you can use discretion, but an open-ended risk is neither, it's just a hope and a prayer.
Have another look at your trade and see how lucky you were. So you think Eur/Usd is just spiking, traders acting in blind panic, but you admit you didn't know what traders were trading. The fundamental reason for the spike was the explosions in London, we now know that, but look at the situation logically. In the past we have seen, from bitter experience, that these sorts of attacks are well choreographed, your spike could have turned into a sustained dumping of dollars had there been further attacks across the world, especially as there were an awful lot of long dollar positions in the market. By the time you realise you're in trouble your positions have moved so far into the negative you're in
serious trouble. Going on from that, suppose trading had been ceased, what then? Your next opportunity to close may not have come without a very big gap.
By doing what you did you are leaving an awful lot to chance and luck, that's not the most sensible way to trade......in my opinion.
Mick