Friday, December 12, 2008

Trading Whilst Tired/Unwell.

I've noticed within my personal trading that, if I'm tired, unwell or otherwise unfocused, my decisions tend to become based more on how I'm feeling instead of what the price action is telling me. One of my weaknesses is the insistance on trading through these periods even though I'm fortunate enough to be able to identify them ahead of time. Luckily, it didn't cost me as much as it could have...

EUR/USD- something I usually just watch because it's $12.50 per tick. Good entry there just after 9:00ET. I usually set my mental stop, have the order ready, and then wait- if the price action is going against me but is showing a bias in my favour, I'm willing to allow price to pass my stop by a few ticks. This was the case here where my mental stop was.0071- highs .0074. I got out just before market open to avoid the expected volatility for basically a flat ($6 something)The lesson here is to not trade instruments with a minimum risk greater than the risk you're able to accept (if you're managing the trade more defensively than usual then you haven't accepted the risk you've just taken it!)

DIA- Got in 10:20ET at 87.56- felt like I rushed the entry but it was valid. The mistake here was ignoring the obvious upside bias and refusing to put my stop on the books until it got to the price I wanted to exit. Unfortunately for me, it then spiked getting me out at 87.85 for a 1.5R loss. The upper timeframe resistance I was playing off was the upper trendchannel line of the pullback from Mon 8th Dec on a 30min-60min chart...

The yellow arrow is the scalp I was looking for (which I didn't take) which stopped at the pivot high of the last 5min of wed 10th's trade in addition to the early afternoon congestion zone (still holding the larger 30min res)

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