You must do the things you think you cannot do.

- Eleanor Roosevelt

Sunday, July 11, 2010

Too Late, Terrible Wait, Some Profit

The drop as the market opened today (Sunday) felt like a solid drop. There were no bottoms put in--just bars of consolidation previously formed. Anyway, I made a terrible trade. I waited too long to take a risk and when I took it I was unwilling to take a small loss. Perhaps that's me intellectualizing it; I probably would've taken a small loss if the drops were less steep or if some sort of bottom formed after I shorted. What I really needed to do was wait for a slight pull back and then short. But I missed one, and didn't feel like missing another.

I took a risk, and if I didn't have the entire market pushing lower behind me, I would've been screwed. This is why you should never go in without knowing the larger context. The more time frames you have working in your favor the better off you are.

The top screen is of my (way too long in duration) short trade. I finally took a profit of 5.6 pips on that.

The bottom screen is of the EURUSD in the daily time frame. It is either taking a pull back, or forming a top. Who the hell knows which it is? I'd say that there's a greater likelihood of a pullback, given the precipitous drop that has taken place over the last few months and what looks like a bottom forming (basically, I'm going to wait for some sort of bottom formation on the smaller time frames and then start taking more long positions).

But, then there's evidence that the Euro may be heading towards parity with the dollar. I'm not really qualified to speak much about this idea in depth. Maybe I'll delve into it some other time (for intellectual stimulation); but, what really matters to traders is being able to read and interpret a chart.

We're not economists.

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