Thursday, April 9, 2009

Getting Back In The Water

Took a trade in CAD/USD today...pretty much got wicked out, stopping out two ticks from the low (ouch!), for a 5 tick loss...

I was a tick or two early, but the structure of the pattern was broken so I exited and took my loss . It's all about the probabilities...having the discipline to cut those losses when the edge has been lost is what'll keep the equity curve trending up (or at least allow any pullbacks to be shallower than they might otherwise be).

As annoying as it is to be stopped out at lows, it's important to remember to rate the quality of the decision/action (i.e taking the loss) not on the outcome but on the correlation between actions taken and probabilities observed...what happens next is irrelevant.

Sometimes the animal breaks the fence down and still returns to it's side of the field.

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