Okay last week we left off with my pending order placed on GBP/AUD.
Within a few minutes the price dropped and my pending order was tripped! I’m in the trade! Now some of you might be wondering why I just didn’t place a market order for my trade? Well, as part of my comfort zone. Price may have reversed and pulled back slightly after the signal was given by the ST “Follow the Trend” indicator. And since I was sitting here looking at this I might as well avoid any potential drawdown. I don’t mind missing a few pips for that. Also it gives me an opportunity to change my mind after I get the order placed should the need arise. And before I forget, I wanted to review the reasons why I decided to take this trade. Several factors presented themselves: the colored oscillator had been for several bars flipped to the downside, reinforcing the strength indicator, price action had been dropping for several bars with short bottom wicks, and price action below the 50 SMA and was midway between the blue and red supply and demand bars, as well as the ST Follow the trend alert, all of which took place during the New York session and no pending high-impact news. For me this is a strong SELL signal.
A few minutes later my trailing stop kicked in:
Now my trailing stop is below my entry and I’m locked in profit.
A few minutes later…
… and I was stopped out at about 25 pips profit. And with this trade I made my trading goal for the day, so I closed down the trading desk and went shopping with my daughter.
Now this may have seemed easy but in reality it is the result of years of work and a lot of sweat. Is it worth the effort? Why I suppose the short answer to that is – yes it is. After all, for me, this is not a hobby, it’s currently my livelihood. That being the case, I cannot afford the luxury of being fearful when presented with a trading opportunity. It needs to be analyzed coldly and properly, and if satisfactory, the trade will be placed and it will either get stopped out or be profitable. I know that if I stick to my plan and my rules then the numbers will be on my side, and my winning trades will continue to outnumber the losing ones, and at the end of the month my brokerage account will be larger than at the start of the month. Remember what Master Yoda said: “Fear leads to the dark side…” Seriously, I firmly believe that, in time, traders find their “sweet spot” – that part of one’s comfort zone where the trader is not overly stressed out, yet alert enough and with clarity of mind to make a satisfactory trade / no trade decision. Remember that trading poses a serious mental challenge; many novice traders give in to the stress and end up failing. Mental toughness trumps emotion in this business. This installment was intended to be a small insight into my own comfort zone; your mileage may vary, but I hope you enjoyed it and until next time happy trading and may the force be with you.
BTW, if there are any young Padawans out there reading this, this might be a wonderful opportunity for you to consider a Sapphire membership in Slick Trade. Okay, so you won’t find any light sabers or force lightning, but you will find a treasure trove of educational materials, strategies, expert advisors, support of other members and the like. So give it a try, and remember, don’t give into the dark side!
Have a great week and, as always, thanks for reading. JC
Miss out on last week’s Pipsqueaks article? CLICK HERE to access