The Forex Diary – 7-17-09

Trade #2 July 15th, 2009 2:15 a.m. Sold 10 Lots of EUR/USD @ 1.40865 7

The market has me currently in a dilemma. I was awoken last night round 1:30 a.m. As my alert for 1.4100 break through had been penetrated. I was gaining confidence that it would go lower past the 1.4080. The market went back up to 1.4090 – 1.4099 several times. I bought twice 5 additional lots as I knew that this was the down trend I was so patiently waiting for. Then, it went past 1.4100 to almost 1.4120. I was down $40.00. It finally went past the resistant level of 1.4100 again. I sat there and watched the market until 4:40 a.m. I finally closed out the two 5 lot positions as it retraced back to 1.4120. I lost $20.00. As I wanted to get some rest, I placed a stop at 1.4130 and went to bed. Now the market is at 1.4087 which is around my entry point. In 1 hour I leave for work. Do I keep my position and my stop or do I close out the position and possibly loss the move as I can’t be here to watch. Subsequently, I would be breaking another rule I made too. Never be in a trade when not at the computer. If I get stopped out, I would loss about $30.00. The reward is much greater as a head a shoulder has formed and looks like a potential downtrend will establish. I plan to let my trade ride. We’ll just have to see what happens. Will I get stopped out? Will I make money?

The reason I entered this trade was because the market got close to going below the 60 minute SMA and I was going to buy. It never stayed below the average line.

Lesson Learned

Wait for confirmation before entering a trade if market falls below the SMA.