Hello everyone,

Today I have been reminded that markets are not perfect. Every trader tends to forget this fact as time passes, and every time the markets slap you back into reality with a not-so-tender wake-up call.

Why do I say this? because today I took a trade that was based on a perfect setup from a Technical Analysis point of view: I had the 3SMAs in order, I had the longer time frames agreeing with me, I had a crystal-clear level of confluence of resistance backing up my position, I had a retracement-trendline breakout, I had my beloved breakout-pullback-continuation entry pattern, I had a very positive risk/reward ratio, etc. All the ducks were literally falling in line…

And I scored a -23 pip loss :)

You see, markets are just not perfect and nor is any Forex trading system. There’s a certain component of chaotic randomness in this whole business that makes it totally unpredictable, untamable. In a way, trading could be compared to bull-fighting: most of the times if the bull-fighter does his job right he will come on top, but on some occasions the bull pulls out an unexpected turn and horns the bull-fighter dead. It’s just something that happens and there’s nil you can do about it. Well, actually that’s not quite correct - yes, there’s something you can do: keep the loss as small as possible. In this case, I limited the loss to -23 pip which is not disastrous by any means.

Alright, end of the week and time to sum things up: this week I have only taken two trades, one of GBPAUD for +0 and another one on EURNZD for -23 pips, so the final score is -23 pips for the week. And while we are at it, the score for September 2007 has been +88 pips. Not the best month to be honest; I usually benchmark my trading months around the 200-pip limit - anything above that milestone is a good month in my opinion.



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